Tahoe’s new Gold Rush: Bay Area residents fleeing coronavirus push up home prices

Pam Hobday was sitting in her home across from Donner Lake in Truckee on a recent weekday when a man rang her doorbell and offered her $2 million in cash for her house.

“He said, ‘I don’t even need to see the inside,’” recalled Hobday.

When Hobday said she planned on living there the rest of her life, the man inquired about whether any of her neighbors — the homes share a private dock — would be willing to accept the same deal.

“I asked him where he was from,” she said. “He said, ‘Well, I’m from San Francisco.’ I said, ‘Where in San Francisco?’ He said ‘Nob Hill.’ I said, ‘Sir, this isn’t Nob Hill. This is Truckee.’ I was shocked at how aggressive he was.”

The COVID-19 pandemic has stoked a real estate boom throughout the Tahoe region, propelled by thousands of workers fleeing San Francisco and the broader Bay Area. Freed from the shackles of 9-to-5 office work, these white-collar workers are seeking mountain homes near open space and tranquility far from downtown high-rises. And they have the money to pay for it.

In Tahoe, the influx of newcomers has, as Hobday said, “turned every day into Fourth of July,” bringing unwelcome traffic jams, trash, crowds and fears newcomers could turn the mountain town of Truckee into a coronavirus hot spot.

But full-time residents — in particular the essential workers who staff hospitals, teach kids, plow snow and cook in restaurants — are concerned the influx will drive up rents and housing prices in a region already unaffordable to many.

Year over year, the average home price in the area is up 26% to $1.3 million, while the median price has jumped 17% to $865,000, according to the Padden Group, a local brokerage. The number of homes sold in July was up 59%, from 96 to 235. In the last 30 days, 213 single-family homes hit the market, and 105 are already in escrow. Bidding wars are now par for the course, and some houses are attracting more than 50 bids, according to brokers.

“You are not even going to compete if you don’t have all cash. It is like the Bay Area prior to COVID,” said Kathleen Eagan, a former mayor of Truckee who has lived in the town for 30 years.

The property feeding frenzy is rippling across the Tahoe economy. Owners who had been renting out homes to local families are capitalizing on the seller’s market, leaving their tenants scrambling for new spots just as school is starting up.

“The No. 1 thing you hear around town is, ‘My house is getting sold and I need to find a new place,’” said Emily Vitas, executive director of the Truckee Tahoe Workforce Housing Agency.

Sam Drury, a broker with the Padden Group, said the demand from the Bay Area is strongest in the entry-level segment, under $1 million, and many of the would-be buyers are well-paid tech workers who were renting in the San Francisco market. They are outbidding the teachers, nurses and construction workers, many of whom are forced to commute from Reno and other cities.

 Tahoe’s new Gold Rush: Bay Area residents fleeing coronavirus push up home prices

“Anything that was even a little affordable is getting soaked up,” Drury said. “That three-bedroom, two-bath 1970s chalet that was $550,000 is now $675,000.”

Two bedrooms rent for about $2,200 a month and three bedrooms for $2,500 — which is about 20% above what it was prior to the pandemic. Bay Area renters are often willing to pay an entire year of rent up front, according to affordable housing advocates.

On the Truckee residents Facebook page is a constant stream of locals — teachers, nurses, firefighters — looking for a new rental because their landlords are selling.

Eagan said that the Truckee Nextdoor is full of inquiries from the newcomers — several of whom seemed unfamiliar with the pollen that blankets surfaces every summer. “There are so many posts, ‘Hey just moved to Truckee. And what is that yellow stuff on my deck?’”

The lack of affordable housing has been an issue in Tahoe for decades as Truckee has grown from 5,000 to 16,000 since it incorporated as a town in 1993. The Mountain Housing Council estimates there’s a 4,000-unit housing shortage in the area.

A Truckee Tahoe Housing Workforce Agency survey of 1,800 public sector employees found that 16% of local workers were considering leaving Tahoe because of the housing costs. Over the last 10 years, the Tahoe Forest Health System (a member of the Workforce Housing Agency) has seen a 13% increase in employees commuting in from Reno, which is also seeing a spike in home prices because of the growth there of companies like Tesla and Apple.

Stefanie Olivieri, who owns Carbona’s clothing store in downtown Truckee, said the lack of housing has made it impossible to hire new workers. “It’s crippling our business,” she said. “I have worked five months without a day off because I could not find anyone to work. Most retailers are in the same boat.”

The long commutes “add more traffic, hurt air quality and harm the quality of life,” she added.

On the surface there would seem to be enough housing in the Truckee and North Lake Tahoe region — 13,000 homes serving a population of 16,000. But 54% percent of the inventory is second homes, and of those, about 13% are used for short-term vacation rentals. Many of the vacation homes are sitting empty — at least 1,000 — according to Kai and Colin Frolich, San Francisco transplants who started Landing Locals, a business that seeks to connect owners of unused second homes with local workers.

“We are trying to offer an alternative to short-term rentals or properties sitting empty,” said Kai Frolich.

So far Landing Locals has placed 140 Tahoe workers into 55 empty vacation homes, often units that are in limbo as the owner passed away and the next generation doesn’t live in the area. They call such units “cold beds.” Landing Locals is now working with 373 residents in need of rental housing.

Beyond lamenting the housing crunch that’s hurting workers, Tahoe residents want the new neighbors from the Bay Area to respect their way of life.

Siobhan Smart, who owns the historic Wagon Train Cafe in downtown Truckee, said that Bay Area transplants will be accepted if they are friendly and community-minded.

“You can’t come up here and be a jerk. The town is way too small for that,” she said. “You can’t flip off your neighbor because that is the same neighbor who is going to help dig you and your three small kids out in a snowstorm.”

She added that people from San Francisco need to learn to be neighborly because small-town living in Tahoe is nothing like the anonymous existence that San Francisco residents enjoy.

“Walking around on your phones, not making eye contact — you don’t get to do that here.”

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen

Article source: https://www.sfchronicle.com/bayarea/article/Tahoe-s-new-Gold-Rush-Bay-Area-residents-15511767.php

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