Sierra Sotheby’s International Realty (SSIR) releases Third Quarter 2012 micro market reports. Data suggests market growth to continue into 2013 with hopes for prices to rebound. The sharp increase in single family home, and condo sales in Incline Village and Crystal Bay is a positive sign for the Tahoe real estate market. With interest rates at all-time lows and home prices as low as they have been in nearly a decade, homebuyers are picking up great deals in this market.
“Although median and average pricing are effectively lower, values are not necessarily declining. Buyers are favoring lower priced condos and homes, thus impacting the average pricing. The number of condo sales under $500,000 increased by 50% in 2012, and home sales under $700,000 increased by 85% through the third quarter in 2012. This shift shows bargain hunters looking for best buys in the market, while there is a large inventory of higher priced properties. We are also seeing bargain hunters in the luxury market find relative values between $1-$2M,” explains SSIR Salesperson Lexi Cerretti.
Non-lakefront single-family home prices continue to edge down in the Incline Village and Crystal Bay areas, dipping 6% in median price and 8% in average price year-to-date in 2012, when compared to the first 9 months of 2011. However, sales volume has picked up dramatically, with 106 home sales so far in 2012 compared to only 71 for this period in 2011, an increase of nearly 50% in sales volume. The area has also seen a slight decrease in average number of days on market, down 4% from last year.
Condo sale prices in the Incline Village and Crystal Bay area have continued to decline, down nearly 17% in median price and 11% in average price year-to-date 2012. Number of units sold jumped 34% from 2011. Average number of days on market dropped nearly 7%, while sales price remained at 95% of list price.
Lakefront sales were limited to 2 homes in Crystal Bay and 2 condos in Incline Village by Third Quarter 2012. The lakefront market for single-family homes has remained steady, with only 2 sales through Third Quarter for both 2011 and 2012. However, average days on market for lakefront properties are up by 16% since 2011.
Absorption rate has been dropping as home sales increase in the single-family non-lakefront sector, currently down to just over 12 months of inventory, with 144 active listings remaining. Non-lakefront condo’s absorption rates are down to just over 9 months of inventory with 130 listings remaining on the market, a positive sign reflecting the increasing number of sales as buyers return to the market.
Lexi Cerretti adds, “A notable estate at 593 Lakeshore is in escrow with a list price of $29,500,000. This is an 8-acre lakefront estate with 3 homes, 670′ of lake frontage, sandy beach, pier and boat buoys on a prime location in Incline Village, Nevada. This will be the highest priced sale for Incline Village in nearly a decade, and will show support for real estate market pricing around Lake Tahoe.”
Lake Tahoe East Shore has also seen an increase in home sales, up 40% from 2011. Single-family home prices declined 23% in median price and 24% in average price year-to-date in 2012, since 2011. However, sales volume has jumped significantly with 74 home sales so far in 2012 compared to only 53 for this period in 2011. Condo sale prices in East Shore have also continued to decline, down nearly 12% in median price and 18% in average price year-to-date 2012, from the first nine months in 2011. Unlike single-family sales, the number of condo units sold dropped slightly to 32 sales in 2012 compared to 36 for the same period in 2011.
East Shore Lakefront sales declined in 2012, with only one sale over $5 Million compared to 4 sales priced over $5 Million in 2011. There are currently 24 active lakefront listings for sale in this area, with an absorption rate of nearly 73 months, about 11 months less than the supply of Incline Village and Crystal Bay lakefronts on the market.
Cerretti explains, “In this luxury market, buyers have an opportunity to purchase into an area where new construction is extremely limited. Most of the East Shore of Lake Tahoe is forever wild, and there is a finite inventory of homes. As demand increases and supply dwindles, pricing will be driven up for areas like Glenbrook, Nevada, which has held the title of most expensive zip code in the U.S.”
The California side of Lake Tahoe single family housing market, which includes Northshore, West Shore of the Lake, Squaw Valley, Alpine Meadows, Northstar, Homewood, Tahoe Donner, and Truckee, has generally improved over the last 12 months – specifically in Median price, price per square foot, number of homes sold and fewer days on market. “Currently the issue is the lack of inventory especially in the $300,000 to $450,000 range. This situation is frustrating for the Buyers and real estate agents but creating favorable conditions for sellers because they’re receiving multiple offers and selling their homes more quickly. The Lake Front market, West Shore and Northshore, improved from the 2011 numbers in median price by 15%, price per square foot by 48% and days on market decreased by 10%. It appears we’ve hit the bottom of our market and mortgage rates are the best since the 1950’s, therefore if you’re thinking about buying a Tahoe Area dream, now may be the best time for bargain hunting at all price levels,” explains SSIR Salesperson Valerie Forte.
The Southwest Reno market has been very active, with over 1,000 properties sold and steadily increasing sales volume. This is the only area where median price has actually increased, due to some high-end sales priced up to $4.5M in 2012. With absorption rate of just under 6 months, pricing is likely to steadily rise if inventory continues to decline.
Jobs and business opportunity are driving factors for the housing market in Southwest Reno. Mortgage interest rates are at all time lows, and the majority of homes in Reno fall within the $417,000 conforming loan limit. Nevada is attracting new businesses, such as Apple’s proposed data storage center east of the City, offering potential for the future growth in the local real estate market. “As inventories decline and the market continues to stabilize, pricing should rebound as we have started to see in other markets around the U.S.,” says Cerretti.
In general, recent Lake Tahoe real estate sales data definitely suggests that the market is in the process of forming a definable bottom with sales prices and accompanying real estate appraisals that are more consistent with market expectations. SSIR Broker Bill Murphy adds, “The general Lake Tahoe market has always been a lagging indicator to the San Francisco Bay Area real estate market which is currently experiencing strength and is recently defined by increased scarcity of inventory. While the general Lake Tahoe market has not yet reached this point, there are indications that we might expect to see this strength begin to manifest itself in our market starting in the spring of 2013. Of course, properties that are very, very unique and well located are selling now as well as all other properties that are realistically priced within the umbrella of recent comparable sales criteria that the marketplace always provides for would-be sellers and their agents.”
All data compiled from the Tahoe area multiple listing services, deemed reliable but not guaranteed. For more details on the Lake Tahoe real estate market, visit TahoeMicroReports.com