Small contractors and big developers alike are trimming down as the real estate market continues to slump.
While the resort-oriented, second home-driven market has been somewhat insulated from the greater national economic woes, some of the rippling effects have made their way into the Tahoe-Truckee region.
East West Partners, the largest developer in the area, recently laid-off three members of their marketing department, and three or four construction management positions, said Blake Riva, a managing partner with the company.
“We’ve made some adjustments in light of the overall slowdown in the market,” Riva said. “With Old Greenwood and Gray’s Crossing near completion and the Village at Northstar now complete, there is a smaller workload as well.”
But East West Partners has seen less of a slowdown in the Tahoe-Truckee area compared to other properties they have in Colorado, he said.
“Industry-wide we’ve seen a slowdown, but comparing Tahoe to Park City or Vail, we’ve seen less pronounced effects in Tahoe,” Riva said.
The Winter Creek development in Truckee has slowed some along with the rest of the market, said Tom Grossman with GLA Morris Construction, but overall is still doing well.
“We’ve sold 53 out of 60 built,” Grossman said. “Now when I sell one I build one.”
Grossman said he’s had to reduce his construction crew from 60 to 40.
Likewise, Sue Ruane, executive vice president at the Tahoe Sierra Board of Realtors, said real estate agents have been relatively insulated from the declining housing market.
“We usually have a membership of about 1,000 — always right in that range — and right now we’re at 950, so the effects haven’t been as big as you’d think,” Ruane said.
Mark Tanner, of Mark Tanner Construction, said he and other contractors have seen the market shift from new construction to remodeling locally.
“Last year it was like 90 percent new and 10 percent remodel. This year it’s more like 50-50,” Tanner said.
Remodeling work hasn’t been enough, however, and Tanner said he and other contractors he’s spoken to have had to let people go.
His company in particular has reduced staffing by about 20 percent, he said.
And Tanner said he’s seen contractors come out of more impacted markets like the Sacramento area into the mountains in search of work.
Tanner said many contractors thought they saw the light at the end of the tunnel until recently, but the recent government bailouts of financial institutions now has them believing the worst is yet to come.
“People thought we were at the bottom a month ago, but now some people don’t think we’re there yet,” Tanner said.
Grossman said all this means it’s a good time to buy locally.
“I think the entire Truckee-Tahoe market is very under-valued right now, and is a great investment,” Grossman said.