Why The Wealthy Are Moving To Lake Tahoe
October 29, 2021
Millions of Americans moved during the pandemic, particularly from major cities. As the world locked down, many realized that living on top of each other (like in a New York City apartment building) wasn’t viable for themselves or their families.
Many sought more space, outdoor pursuits, and perhaps most important, friendlier taxes, and with the benefit of working remotely from home, moving to a tax-friendly destination with the potential for a higher-quality life was a no-brainer.
While cities like New York are experiencing an influx of people moving back to the city, there are select towns across the U.S., like mountain towns that are still experiencing high, pandemic-like demand, which are increasing prices at an unprecedented level. One of those destinations is Lake Tahoe.
Tax benefits are luring buyers to the Nevada side of Tahoe
Lake Tahoe straddles the state line between California and Nevada and is located within the Sierra Nevada mountain region. While the city of Lake Tahoe is technically located in California, the Lake Tahoe region encompasses the area around the 191.6-square-mile lake.
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The pandemic has exacerbated the real estate demand for Tahoe, therefore increasing prices and generating traffic to many areas around the lake, from Incline Village north of the lake to South Lake Tahoe. Particularly, the Nevada side.
It’s no secret that Nevada offers much friendlier tax benefits compared to California, and those seeking to purchase either a primary residence or vacation home on Tahoe’s Nevada side have benefits like low property taxes; no income, social security, and estate taxes; and favorable business taxes.
“The pandemic resurrected what I would call ‘the gold rush,’” says Dave Marriner, Tahoe Sales Manager and broker of record for the state of Nevada at Compass. “Not only are people coming because the Nevada side of Tahoe is a tax haven, but it’s gorgeous. Over the past few decades, billionaires have been buying out the millionaires, and the pandemic took it to the next tier.”
Marriner says the median home price in Incline Village, north of Lake Tahoe, in Q1 of 2020 was $755,940 and in Q1 of 2021, it was $1.365 million.
“We saw a 58% increase in home prices, which happened in a matter of 12 to 18 months,” he says. “Our supply shrunk from 400 homes on the market to about 45 homes on the market. You have a huge flux of anxious buyers with cash in their hand.”
Outdoor living in a major draw
Those who love outdoor pursuits have always been drawn to Lake Tahoe for its year-round activity offerings, including skiing, hiking, boating, and the beach. Tahoe primarily draws Bay Area residents as it takes less than four hours to drive there, but also outdoor-loving southern California residents, Arizonians, and those around the country seeking an active lifestyle.
Marriner says that high-level tech executives from companies like Apple, Google, Tesla, and Airbnb moved to Lake Tahoe during the pandemic thanks to permanent work-from-home capabilities and proximity to mountain biking, hiking, paddle boarding, swimming, and more.
In fact, major developments are also reaping the benefit of this demand, and it’s increasing prices for both homesites and residences within new communities. While many of the area’s major residential communities, like Clear Creek Tahoe and Tahoe Beach Club, were conceptualized well before the pandemic, they’re finding that this influx of buyers is infusing life into the projects with a level of demand they haven’t seen before.
“Buyers’ desire and need to be in Nevada sooner rather than later is pushing their timelines up considerably,” says Georgia Chase, director of sales at Clear Creek Tahoe. “Buyers are looking for larger properties to build family compounds. We have seen the average size of our estate homes increase to nearly 5,000 square feet which are up from around 4,200 square feet a year ago. Additionally, we are seeing buyers purchase multiple properties and putting them together to build auxiliary structures, like a guest house, detached garages, and family recreational areas. Buyers are also renting apartments or purchasing smaller homes in surrounding neighborhoods to live, while their estate properties are being built.”
Developments offer unique opportunities to own
Clear Creek Tahoe is a private residential community located in Carson City, Nevada on the eastern slope of the Carson Range. The community spans 2,136 acres, 80% of which are protected, with six million acres of national forest bordering the property. The resort first welcomed owners in 2017 and continues to expand. The community is ideal for those who want to build. First, buyers purchase homesites and build their homes with the architect of their choice. Unlike many other communities, there are very few aesthetic or design restrictions meaning that Clear Creek is full of uniquely designed homes.
In Fall 2021, Clear Creek opened their brand-new clubhouse (with a restaurant), spa, and fitness center. The restaurant, helmed by executive chef Shawn Benson, has a globally inspired cuisine, while the exceptionally robust wine menu by sommelier Chris Franke delights even the most discerning oenophile.
One of its most unique draws is the Coore & Crenshaw-designed golf course, which was first built in 2009 and has been operating as a private course since. Clear Creek limits the number of golf memberships to 350, and they are currently at 283 members.
Chase says that many buyers had much faith in the developers of Clear Creek and many purchased homesites without seeing the final clubhouse, spa, fitness center, restaurant, or other amenities.
Clear Creek also has a pool, practice golf facilities, miles of hiking trails, fly fishing at Walker River, a pro shop, and more. There is also extensive programming, like bootcamp classes, kids’ programming, events, and even international trips with members.
“Clear Creek Tahoe offers a safe and secure environment where people are looking to enjoy an active outdoor lifestyle,” Chase says. “Our members can enjoy all the benefits of living at Lake Tahoe, without the burden of vibrant tourist activity, heavy snow, and vacation rental issues affecting property values. The CCT development caters to multiple generations with a vast array of amenities designed for all members of the family. Additionally, although the development is very private and feels remote, it has easy access to good healthcare, shopping, and entertainment.”
While the community is located in Carson City, Nevada, its Tahoe connection is their lake house, Twin Pines Lake & Ski House, just 30 minutes away in South Lake Tahoe, California. Located on the shores of the lake, Twin Pines has a vintage guest cottage built by renowned architect Julia Morgan (who built Hearst Castle) with a bar, lounge area, outdoor seating, and a Hinckley boat, named Louise, for guests to use. Guests get the benefit of living among the mountains, but having access to a respite in Tahoe just 30 minutes away.
At Clear Creek Tahoe, there are currently 260 of 305 homesites purchased with more development to come over the next few years. It’s not uncommon for homes to be worth up to $12 million.
“We have seen an average appreciation rate of 81% on our resale homesites,” Chase says. “Today our developer estate homesites’ average price is $1,052,954, which is up 112% from when we first started selling homesites in 2017.”
Clear Creek is also committed to preservation as well. They put 853 acres of land into a permanent conservation easement with The Nature Conservancy.
“Once something gets hot, people have got to have it,” Marriner says of the Tahoe market. “Clear Creek is an example of a project that was stumbling along four years ago, but because of the demand, it became the Martis Camp of Nevada.”
Buyers are also taking advantage of hard-to-come-by lakefront developments
Located in a more lively, buzzing area near the lake is Tahoe Beach Club, located in Stateline, Nevada.
Tahoe Beach Club is a private residential community on the east shore of Lake Tahoe with 94 residences, ranging from two to six bedrooms, with private beach access, pier, a spa, outdoor pool and hot tub, adventure activities, kids’ programming, and so much more. It’s located close to South Lake Tahoe, which offers direct access to skiing, hiking, restaurants, casinos, nightclubs, shopping, and nearby luxury resort, Edgewood Tahoe. Though it’s about a 10-minute drive from the area, it feels world’s away thanks to its tucked-away location and proximity overlooking 300 acres of U.S. National Forest (perfect for hiking, snowshoeing, biking, or skiing).
Tahoe Beach Club is one of the last remaining luxury residential developments able to be built on the lake, due to the lake’s stringent protection regulations. The residences are built similar to a hotel and owners can choose their desired floorplan on floors one, two, or three. Buyers can work with the resort’s in-house interior designer, but they are limited in what they can install. Furniture, however, is up to them. Turnkey homes are available for those who want to move in right away. Phase 1 of the project is complete, and the first batch of owners were able to move in November 2019. Phase 2 and 3 are currently under construction. Unlike Clear Creek, there are no options to build single-family homes.
This residential development is extremely popular for families with children thanks to its in-depth kids’ programs.
“Tahoe Beach Club is incredibly attractive for families because the amenities and entertainment offered here are right at their front door,” says Shayla Hope, director of sales at Tahoe Beach Club. “Homeowners don’t have the pressure to entertain because the Beach Club does it for them through its robust event calendar. Residents also don’t have to drive anywhere which can be daunting during summer’s high season. Additionally, our complimentary shuttle is very attractive for those looking to head to summer concerts or dinners downtown with ease. There is nowhere else in Tahoe that has the selection of amenities and proximity to outdoor pursuits that we do, in a location like ours.”
Hope says that many homeowners spent their quarantine at Tahoe Beach Club, which made many sell their primary residences or purchase a second, larger home at Tahoe Beach Club.
“Our buyers have surprised me in a couple of ways,” Hope says. “All of them have purchased off of floor plans. We’ve never had a model, which is pretty incredible at our price point. We’ve had 4 sight unseen purchasers to date. However, the most surprising thing to me has been the number of people who purchased units, then purchased second units. Whether they decided to purchase larger units or they bought for their kids or grandkids, the fact that they were willing to go through the early buying process for the second time, spending more the second time around, is a huge testament to the product we deliver and how we manage that process.”
Tahoe Beach Club’s homes start at $1.9 million to over $4 million. There are 12 units currently available and 81 of the 94 homes that have been released were sold. Tahoe Beach Club has 155 beach club members, and they hope to reach 300-325 total members once the final residences phases are built out.
The influx of luxury developments is also helping to enhance the Tahoe area.
“Tahoe is improving thanks to all this money coming in,” Marriner says. “The towns are getting nicer, and the restaurants are getting nicer. It’s all very exciting.”
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