There is a lot of development both currently under way at our local ski areas and slated for the near future. Northstar has already started expanding its development with newer projects such as the Constellation at Northstar, Home Run, and Martis 25’s custom home sites. Although a judge ruled in January that JMA Ventures has to update a component of the economic analysis of its Homewood master plan, the project will eventually move forward. And KSL has a project in the works to expand Squaw Valley’s village by 100 acres. If you are like me, you might be wondering what effect all this development and community improvements might have on your home or land.

Without having a crystal ball handy, we can only conjecture the implications of these different development projects on existing real estate. Being a tourist-based community, our income thrives when visitor numbers are strong. The spring and fall shoulder seasons, as well as bad snow years like last winter, can be challenging on local business owners. In theory, updated town centers, more attractions, and improved ski areas should drive visitor numbers up, which should reflect positively on our local economy.

Both Northstar and Squaw Valley have already gone through some fairly large improvements in the past decade with the development of their villages. The enthusiasm for these developments was reflected in the speed and rising prices at which the condo units were purchased. Jeff Brown, managing broker of Tahoe Mountain Resorts Real Estate, recalls that time, noting, “Shortly after Northstar announced East West Partners’ plans to fulfill the vision for Northstar, there was such a run on existing properties, before a shovel even went in the ground, that no existing condo stayed on the market for more than a week over a period lasting more than a year … The average price for a single family home in Northstar, even excluding the nicer properties in Big Springs, appreciated to well over $1 million in 2005 and 2006.”

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New development in Squaw Valley saw a similar phenomenon. Suzanne Gale of Village Real Estate in Squaw Valley remembers when Intrawest’s plans for developing the Village at Squaw Valley were first approved in October of 1998. “Around that time, Squaw Valley Lodge studios were going for approximately $90,000, and overnight, after the announcement of the Village, they shot up to $250,000 to $300,000 for the same units.”

Given that both of these villages were developed and condo units sold during the lead up to the bursting of the real estate bubble, it is hard to discern if the development of the villages caused property values to rise, if it were divine timing coinciding with the biggest peak in recent real estate history, or a bit of both. According to Brown, “Such things are difficult to track … Overall, I’m sure that we can neither accept credit for the run up nor the decline, but that the truth lies somewhere in the middle. Having said all of this, I do think there needs to be moderation to avoid oversupplying the market.”

Now that our market is once again picking up steam, will this perfect storm happen again? Or will supply outweigh the demand? Looking to the past, it seems that development in the Lake Tahoe and Truckee area has had a strong positive influence on property values.

According to Homewood’s website, the master plan, “by improving the ski area and recreating a community center with shops, walking paths and a hotel, visitors will stay longer, locals will connect more, people will drive less and the West Shore will once again be the vibrant neighborhood it once was.”

With such plans as ski area erosion control, on-site bike and electrical car rentals, a water taxi on Lake Tahoe, and a plan to build a Leadership for Energy and Environmental Design (LEED) Neighborhood Development Program, among others, the intention to improve and revitalize for locals’ benefits has been strongly considered. If all of this development is as thoughtfully executed as it reads on paper, neighborhoods in proximity to Homewood stand to benefit from these improvements, which then translate to increased property values. There has not been a redevelopment of this scale on the West Shore in recent history, and having such hubs as grocery and hardware stores, as well as alternative transportation methods and improved bike trails, can only improve convenience for neighboring communities.

KSL is talking a bit more aggressively with its new development proposal, which includes plans for a water park and adventure center, as well as a four-phase expansion to the village. If you have skied at Squaw Valley in the recent era of the cheap season passes, then you have sat in gridlock on a powder morning. The success of selling more season passes has served to clog access to the ski areas. If that congestion is now a daily occurrence, then what will it be like when there are four times as many residential units in the valley? Can the current infrastructure support this kind of increase in visitor numbers on a more regular basis?

“Overall, I think a thought-out and then well-executed master plan for the new village will be a positive improvement in and out of the valley for everybody’s enjoyment, but especially because we need them staying right here as the destination market has never gotten a foothold here,” said Gale of Village Real Estate. “Remember only half of the Intrawest Village was built and, therefore, the big, fun picture never achieved. Who wants to come and stay and play at a resort that’s a huge, dirty parking lot? I’m overjoyed they intend to cover it and to restore Squaw Creek, a long wasted natural asset.”

Change is coming to our ski areas; however, the scope of each project is different. The effect that Homewood’s plan has on West Shore real estate cannot be applied to Squaw Valley’s home prices, and vice versa. It is hard to know the true impact that these development plans will have on their ski areas. The answer lies in a blend of things: the supply and demand of the real estate market at the time of completion, the scope of the plan, and the thoughtfulness of its execution. Will everyone be happy with the development? That is a topic for another discussion.

~ Maura Mack is a Realtor with Coldwell Banker in Truckee. Contact her at maura@mauramack.com or (530) 582-9775. Comment on this column below.

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