Fractional Ownership sales in the North Tahoe-Truckee market, in units sold, are 10% ahead of this time last year and 14.6% ahead in dollar volume. With what is currently in escrow, and considering the current rate of activity, I expect that we will end the year with approximately 60 – 62 units sold and a dollar volume of approximately $7,000,000 – $7,250,000 which will make 2013 one of the best years for Fractional Ownership sales since the economic down turn in late 2007.
Here are the 3rd Quarter, 2013 sales statistics compared to 2012;
- Units sold: 54 +10%
- Dollar volume: $5,317,450 +14.6%
- Median price: $45,000 +18.5%
- Average price: $100,329 +6%
Fractional Ownership sales in the North Tahoe-Truckee area took a big drop during the economic down turn. This was mostly due to lenders no longer offering financing for Fractional Ownership purchases. This happened almost immediately after the collapse of Lehman Brothers in 2007. At that time Fractional Ownership sales were at a high of 67 units sold and $17,484,768 in dollar volume. Within two years units sold had dropped by 62%, to 25, and dollar volume had dropped by 73% to $4,651,150. Since that time sales volume in both units sold and dollar volume has crept up slightly each year. Units sold are now approaching pre down turn levels but dollar volume is still significantly lower.
The loss of financing caused owners who needed to sell to start dropping prices. The median price of Fractional Shares in 2007 was $240,000. Currently it is $45,000, 18.5% of what it was at its high. Also, I think that because we saw large price drops on whole ownership single family homes and condominiums (Distressed Properties) during the down turn, many buyers who might have purchased Fractional Shares during the boom decided to purchase whole ownership properties.
Of the many Fractional offerings in our market the ones that saw the largest drop in prices, from most to least, were Old Greenwood, Sweetbrier, Tonopalo and the Fractional condominiums in Northstar Village. The single family home Fractionals in Northstar, Tahoe Donner and along Tahoe’s North Shore have also seen price reductions. Other than at Old Greenwood the price reductions now reflect values that if multiplied by the number of shares in a particular property would equal the value of that property if it were sold as whole ownership.
The Fractional market is slowly coming back and prices are starting to increase gradually. It is a great time for cash buyers to purchase.
Resort Realty Services, Inc. does not guarantee the accuracy of this information. This data was obtained from the Tahoe Sierra Board of Realtors MLS. Not all real estate transactions in our area go through our MLS, therefore, this information may not be completely accurate. CalBRE License #01204227
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