Vacation Rental Ban in Chiwawa River Pines?

Own a vacation rental in Chiwawa River Pines? Do you have a cabin there that you have been thinking about renting out when your family isn't using it?

Al over at NCW Real Estate Blog reports that the community is debating how to enforce a ban on vacation rentals and all other commercial ventures that have been a part of the neighborhoods.

No matter your opinion on the matter, if you own property in Chiwawa River Pines, you should plan on attending upcoming meetings of the neighborhood association.

I think that enforcing a ban on vacation rentals will have a negative impact on property values. Buyers in the Leavenworth and Lake Wenatchee real estate market like the option of renting out their property even if they never use the option. Condos that can't be rented out languish in our market. Homes in the city limits of Leavenworth don't sell quickly for the same reason. I think a ban on vacation rentals in Chiwawa River Pines will only increase the property values in Ponderosa, where out of area buyers will turn their attention.

UPDATE March 20 - A date has been set for a community meeting for those who own homes and property in Chiwawa River Pines

Kahler Glen Avalanche Destroys Home

A home at the Kahler Glen golf course near Lake Wenatchee was hit by an avalanche yesterday and carried 150 yards off its foundation according to the Wenatchee World. According to Lake Wenatchee sources, the home was located on Pelton Place which sits above Miracle Mile Road.

KIRO TV has the best photos of the avalanche damage and the home. They reported that a mandatory evacuation was in place for 15 nearby homes, due to avalanche danger and a buried propane tank that appeared to be leaking.

It doesn't appear that anyone was in the home, but that it was a vacation rental that was scheduled to be occupied this weekend. A two person cleaning crew had been in the home earlier in the day. It sounds like a second home was also damaged by the avalanche.

The condos at Kahler Glen are outside of an area that might be effected by avalanches. However, Pelton Place, where this home was located, is on a steep slope backed by land owned by a large timber company. Local news media seem surprised by this avalanche, but last spring, a home on this road was hit by a giant mudslide doing tens if not hundreds of thousands of dollars worth of damage.

According to the Northwest Avalanche Center this is the seventh significant avalanche incident this winter. The NWAC had predicted high avalanche danger for Thursday and warned travellers to avoid backcountry areas.

Leavenworth real estate and Lake Wenatchee still in demand

Leavenworth real estate and real estate in the Lake Wenatchee area remain in high demand despite recent news about slowdowns elsewhere.

Two areas that I have seen strong interest in over the past few years are waterfront homes and condos at Kahler Glen.

Waterfront homes range from cabins on Lake Wenatchee and Fish Lake to homes on the Wenatchee River or Icicle Creek. Currently there are only a handful of waterfront homes available in The Leavenworth area.

Kahler Glen condos have remained a hot commodity over the past two years. Certainly I remember 2004 when you couldn't give them away for $175,000, but 2008 is a different story. The last one sold in the spring of 2007 for $325,000 and I expect the next will be at least $350,000. Buyers always ask about other condominium options at Lake Wenatchee or Stevens Pass. The truth is that Kahler Glen has the only condos near Lake Wenatchee and no projects are scheduled in the area.

I am starting to add names to my list of buyers for both waterfront homes and Kahler Glen condos. Don't hesitate to ask to add your name as well, even if the inventory is limited right now. Conversely, homeowners please don't be shy about asking me to help you evaluate the market price of your home. I may even be able to sell your home without listing it on the MLS.

Lake Wenatchee Real Estate

Real Estate at Lake Wenatchee and Fish Lake has really taken off in the last decade. Lake Wenatchee's popularity comes from the wealth of recreational opportunities (boating, fishing, wind surfing, hiking, snowmobiling, skiing, golfing) and it's proximity to the Seattle area.

I wrote about Fish Lake real estate in a previous post, so this article will be mostly about Lake Wenatchee.

There are two roads that skirt Lake Wenatchee and serve as separate neighborhoods. Cedar Brae (aka South Shore road) runs along the South Shore. It starts at the South entrance of Lake Wenatchee State Park and passes Kahler Glen Golf Club. At the other end of the road is Camp Zanika Lache, a Campfire Camp, a number of cabins on leased Forest Service land, and a trail to Hidden Lake. On the north side of the lake, North Shore Drive runs from the Lake Wenatchee Highway near the YMCA camp to near the White River road near the former site of the Cougar Inn. The north shore of Lake Wenatchee is often preferred because it faces South and gets more sunshine in the short days of winter. The West end of the lake is mostly U.S. Forest Service and the East end is the mouth of the Wenatchee River and Lake Wenatchee State Park.

Lake Wenatchee Real Estate 2007

In 2006, there were 7 sales on Lake Wenatchee listed on the North Central Washington MLS. These are lakefront properties, not properties with access to the lake or across the street from the lake, but actual lakefront. 1 was a cabin on leased land, 2 were tear down houses, and 3 were lakefront homes and one was a building lot.

The tear downs averaged $490,000 while the lot sold for $822,000. The tear downs were on similar size small lots on the North Shore (.17 and .12 acres) with 52 and 40 feet of lakefront. The lot was also on North Shore, but was .55 acres and had 100 frontage feet on the lake.

The three houses averaged 2400 square feet in size and sold for an average of $1.1 million. All three houses were on the North Shore and on lots smaller than a 1/4 acre. Two of the homes had 100 feet of lakefront, while the largest house had only 50 feet.

In 2007, 2 lakefront homes on Lake Wenatchee have sold so far. These homes are smaller (average of 1500 square feet) and had an average selling price of $910,000. One home was on Cedar Brae and though larger, much newer and on a lot 3 times bigger, sold for less money. This is the only South Shore listing that has sold in two years and it appears that the market does favor the North Shore by a large margin.

Currently one home is pending at $750,000 for a rustic cabin 1392 square feet in size. A much smaller house of 800 square feet is available for $770,000. Both are on 1/2 acre lots on the South Shore.

There are still a number of cabins on Lake Wenatchee that sit on leased land owned by the U.S. Forest Service. These cabins sell for under $200,000. It seems like a great deal except that you don't own the land. The USFS does and they make you pay them a lease. Those leases are currently for 10 or 20 years and may go up drastically, they are supposed to be set at 5% of the value of the land, though current leases seem to be a few thousand a year. (If the lot value in private hands is $500,000 then the lease is $25,000 a year.) The Forest Service may also cancel the lease and ask you to remove your cabin. Then you are left with nothing. Ask your lender if they will loan on a property like this, I doubt many will because of the risks involved.

Searching for Lake Wenatchee property

The search tools that consumers have at their disposal are poor at finding waterfront property in Leavenworth and Lake Wenatchee. This is especially true for local Leavenworth sites like http://www.lakewenatcheehomes.com/ or my competitors at Leavenworth Properties and Lake Wenatchee Properties. This is a function of the IDX program available to us at this time. The mapping isn't as useful, but http://www.windermere.com/ does allow consumers to search for waterfront listings.

If you want to see current Lake Wenatchee waterfront homes click here or for waterfront lots click here or email me at any time and I will send you a list of the current available properties.

Update March 2008

The search function has now been updated for the Lake Wenatchee Real Estate site. You can now search easily for waterfront properties on by categories that include lakes, rivers and creeks.

Riverfront Lots in Leavenworth

Buying a riverfront lot in Leavenworth or Lake Wenatchee Washington?

Recently I wrote an article about buying a riverfront home in Leavenworth. I talked about the different options such as the Wenatchee River, the Chiwawa River and Icicle Creek. For some people, buying a home on the river doesn't compare to building a custom home on the river.

Building lots in Leavenworth and Lake Wenatchee (Plain) are more expensive every year. This is especially true with riverfront.

In 2006, 15 parcels on the river sold in the Leavenworth area. The average lot sold for $246,000 for a lot under 1.5 acres in size. The median price for a lot was $275,000.

In 2007, through the end of July, 5 riverfront lots have sold. The average price is $307,000 for approximately 1 acre.

Currently, there are 6 active lots on the market with a median price of $385,000. The least expensive is $279,000.

3 lots are under contract (pending) with an average price of $273,000.

I generally tell buyers that they should expect to pay $300,000 for a riverfront lot in today's Leavenworth real estate market. If you are interested in low bank that doesn't flood or a specific location, such as the Icicle River, you probably can expect to pay more. (Lakefront is another story all together - probably double the price.)

With only 6 lots on the market, there really isn't a huge number of choices for the consumer to pick from. The best thing to do is become very familiar with the market and be prepared (emotionally and financially) to move quickly when the right property becomes available.

Click here to search all Leavenworth properties or click here for riverfront properties in Leavenworth. (Unfortunately the second link is only good until September 07 - email me for current listings.)

Leavenworth Riverfront Properties

Buying a riverfront home in Leavenworth? Ever dreamed of a log cabin on the river in Plain? How about Icicle Creek?

For many home buyers in the Leavenworth, Plain and Lake Wenatchee area buying a riverfront home has been a lifelong dream.

There a number of rivers to choose from:

The Little Wenatchee River and the White River flow into Lake Wenatchee from the Glacier Peaks Wilderness Area. There are a few opportunities here, but they are rare. Homes on these rivers are far from services and are likely to feel very remote. Winter access is something to think about – skiing or snowmobiling in may be your only option.

The Wenatchee River provides most of the opportunities for riverfront living. The Wenatchee River starts at Lake Wenatchee and heads down to Leavenworth (via Tumwater Canyon) and then on past Peshastin, Dryden, Cashmere and Monitor to Wenatchee where it meets the Columbia River.

Most of the river recreation in the Leavenworth area takes place on the Wenatchee River. This includes rafting, kayaking and tubing.

Some neighborhoods that have Wenatchee River frontage are Bretz Road and Bretz Drive, River Road, Plain Ranches, Alpine Acres, Ponderosa, Alpensee Strasse, Icicle Road and Riverbend Drive.

The Chiwawa River

The Chiwawa River flows 37 miles from its start at Chiwawa Mountain in the Glacier Peak Wilderness to the Wenatchee River east of Lake Wenatchee. Most of the Chiwawa River is located in land managed by the U.S. Forest Service, though some private riverfront is available near the mouth.

Neighborhoods that have access to the Chiwawa River include Chiwawa River Pines and Shugart Flats.

Nason Creek

Nason Creek flows into the Wenatchee River near the Nason Creek Campground which is adjacent to the South entrance of Lake Wenatchee State Park. Nason Creek flows from the Stevens Pass area and is close to Highway 2 for much of its downhill journey.

Icicle Creek

Icicle Creek flows from Icicle Canyon down to the Wenatchee River near downtown Leavenworth. Much of Icicle Creek flows through land managed by the U.S. Forest Service in Icicle Canyon.

Neighborhoods with Icicle Creek access include Icicle Island, Icicle Road, East Leavenworth Road, and Old Bridge Road. It is important to note that the river on your right when you head out Icicle Road from Leavenworth is actually the Wenatchee River!

Other Creeks

The following creeks are a little smaller - babbling brooks that may dry up at the end of a hot summer -Chumstick Creek or Little Chumstick, Bjork and Eagle Creeks. If you are looking for "riverfront" these creeks may disappoint you. I happen to have a small creek in my backyard and I love it.

The Market for Riverfront Homes

In 2006, 13 riverfront properties sold in the Leavenworth and Plain area. The average home sold for $654,000 with a median sales price of $625,000. The average riverfront home was just over 2000 square feet.

Currently we have 11 homes on the river for sale in Leavenworth. The least expensive home is $500,000 and the average asking price is $840,000.

2007 brought Leavenworth its first riverfront condominium project - The Boulders. These 6 luxury condos are located on Alpensee Strasse within walking distance of downtown Leavenworth. Each 2 bedroom unit is 1500 square feet and comes with 2 fireplaces, 10 foot ceilings, granite countertops and awesome Wenatchee River views. Prices start at $595,000 for the 3 available units.

My partner Allyson has a nice 3 bedroom home on River Road for sale. This house has a short trail down to some great low bank waterfront on the Wenatchee River and great views of the river from the house and the deck. You can see a tour of this Wenatchee River home here.

Click Here to Search for Leavenworth Homes or click here for Riverfront Homes in Leavenworth . (Unfortunately this link is only good until Sept 07, e-mail me for the most current listings.)

Leavenworth Real Estate Market Update

The Leavenworth real estate market is made up of a number of different sectors that always seem to be moving in slightly different directions.

The majority of consumers, whether they are local homeowners looking at an increased tax bill or out of town investors, look to the growth of prices to gauge the strength of the market.

Home prices in Leavenworth WA are certainly up. At the end of May the average list price for a single family home in the Leavenworth area (including Lake Wenatchee and Plain) was $518,000. This is the number that tends to excite people and this is the number that most folks see when browsing the internet or looking in local homes magazines.

Of course the number that has more importance is the average SALES PRICE which is what the buyers are willing to pay. Considerably less - $354,000.

But as I said before, this is a tale of multiple markets wrapped up in each other.

The bulk of the Leavenworth real estate market is single family homes under $600,000 that are not on the water. We could even narrow the range to between $200,000 and $400,000, but the story is much the same.

At the end of May 2007 there were 45 of these homes on the market. Looking at the sales data, we have 5.7 months of inventory. More or less a balanced market with neither buyers nor sellers having much of an advantage. ( I would say that generally, home sellers outside the city limits probably have a stronger market that those inside the city, but that data will be saved for another day.) Last year, there were 39 homes on the market with a 3.9 month supply. Though supply does seem to be rising, we did have 63 homes on the market in August and September of 2005, so it is hard to say if this is a short cycle or a longer term trend.

Homes over $600,000 are the luxury segment of our market. In the past year, 6 homes (non- waterfront) sold in this price range and the 13 homes on the market at the end of May represent 26 months of supply. While few of these sellers are highly motivated, it is by any indication a buyers market. (And has been for some time.)

Waterfront homes are a different beast. Generally, these really just include homes on Lake Wenatchee and Fish Lake, and riverfront homes on the Icicle Creek, Chiwawa, White, or Wenatchee Rivers. At the end of May, there were 11 homes on waterfront or 7.8 months of supply. I think this market sector tends to be pretty balanced, despite ever growing price points.

Overall, I see strong demand for vacation homes by westside buyers at prices under $600,000. This continues to be for "cabins" or other vacation homes generally located outside of the city of Leavenworth.

Leavenworth WA real estate - Should you be investing?

Are you curious about investing in the Leavenworth or Lake Wenatchee real estate market? Seems like everyone is interested in real estate investments these days. I see or hear about three types of “investors” most often in our local market. I use the quotes because most of these are “would be” investors who can’t find what they are looking for in the Leavenworth or Lake Wenatchee real estate market. (I read this article from Broker Agent News, (Top 7 Tips,) after I started my post. Notice the similarities including the use of quotes around “investor”.)

The first is the fix it and flip it investor.

Most don’t have the skills needed to fix the houses with real potential. There aren’t many homes in our market that just need a little paint and new flooring. Much of what is available needs some real love and perhaps even moving a wall or two. Another problem is the high price to get into the market. While $250,000 doesn’t seem high in Seattle or San Francisco, it seems high to a Leavenworth or Wenatchee resident for a house that needs a lot of work. Finally there is the turnaround time. Our time on market, even for great homes, can be a little tough on investors looking to get their money back. If you expect it to sell in a few weeks after you have fixed it up, you may be in for a surprise.

Second, we have the typical landlord investor.

These folks are looking for a property, especially multi-family properties such as duplexes or tri-plexes that have good cash flow. This means that the income coming in from rent is greater than the expenses for management, upkeep, and the mortgage payments. The houses are paying for themselves and the investor only needed to have enough for the down payment. Here’s the bad news- it ain’t gonna pencil. A few years ago you might have found rental properties in Wenatchee (but not Leavenworth) that had good cash flow. Not today. Why? Because real estate prices have gone up, but rental rates really haven’t. Robert Kyosaki, the author of the Rich Dad, Poor Dad series had a good idea. Write rental agreements with language that automatically raises rents yearly. How many times have I heard from landlords that they know their rents could be higher, but they didn’t want to lose their great tenants by raising the rent. Guess what? The investor buyer doesn’t care so much about the quality of the renter as much as the quality of the rent.

Third, we have the vacation home buyer.

This person wants to buy a vacation home and rent it out when it is not in use. This isn’t a bad strategy except for the following caveats.

1. Make sure the zoning allows it. In Leavenworth, “nightly/weekly” rentals are only allowed in areas with Commercial Zoning. For the most part, this means a condo, although some older houses are located in commercial areas. In unincorporated Chelan County the zoning isn’t as big of a problem.
2. Be prepared for Management Fees and Condo Association Fees. Managers for vacation rentals locally are charging 40-60% of the rental rate. Some will even charge you a cleaning fee to use your own property. Additionally the monthly condo fees can be a few hundred dollars. These fees make Cash Flow a difficult proposition.
3. When are you likely to use the property? If it’s just an investment- great. Most folks hope to come over for a few long weekends and holidays. Christmas, New Years, Spring Break, MLK Day, Oktoberfest – these are the big money makers for vacation rentals. The quiet times? Mid week (Tuesday through Thursday) and the in between seasons. Can’t golf or go skiing because the weather won’t cooperate? This is the quiet season. There is a great article about making money from vacation rentals here.

What is my advice for the real estate investor? First of all look to the long term. There aren’t many get rich quick deals. If they exist, they require lots of money and certainly talent. There is however lots of money to be made by investors who can wait a year or two. Second. Look beyond cash flow. What about the other sources of profit? Depreciation, mortgage deduction and market appreciation. One of my favorite ideas currently is land that doesn’t quite cash flow. Find a house, often a manufactured home, on a great lot that has lots of value. Rent out the house for a few years with minimal improvements. Does the renter pay the mortgage? Of course not, but when’s the last time you got rent on bare ground? In two or three years the lot has increased 20% a year and you can remove the structure and sell the ground. Similar to this is Rent, Fix and Flip. Buy a fixer upper with potential. Rent it out before you fix it and after a few years of building equity then flip it. We have great appreciation right now, take advantage of it by holding on to it. I think land is a great place to invest right now. Not necessarily large subdivisions, but little short plats of 2 to 4 lots or just keeping a small in town lot or a lot in an existing subdivision.