While the real estate surge in resort markets such as Lake Tahoe amidst COVID 19 has been making headlines, recently compiled third quarter data reveals deeper insights behind the much buzzed about market frenzy.
This week, Sierra Sotheby’s International Realty released comprehensive reports outlining market trends across the Reno-Tahoe region’s different neighborhoods, revealing growth in sales volume topping 175% in some sectors. For many communities, median home prices are up generously in the double digits with gains in property values for some neighborhoods topping more than 43% since 2016.
Fueled by demand for more open space and a better quality of life during pandemic uncertainty, the data indicates growth in both volume and price across all regional markets, however, the numbers range dramatically from one community to the next.
Tahoe’s ski and golf resort neighborhoods showed impressive growth with single family home sales volume up by 44% in South Lake Tahoe, 45% in Squaw Valley and 79% in Northstar, to name a few.
Truckee, which is popular for its amenity-rich neighborhoods such as Old Greenwood, Gray’s Crossing, Martis Camp and Tahoe Donner showed a 47% increase in home sales coupled with a 13% increase in median sale price as compared to this same time last year.
Agents are reporting record sales for third quarter with a fast paced market across all price points and properties under $1 million representing the hottest segment of the market.
There’s a perception that many of these buyers were interested in a primary residence, however, agent feedback suggests that the vast majority of the homes were purchased as temporary residences where buyers can work remotely and participate in distance learning until they can get back to a normal routine.
That said, agents say they are not seeing a trend with these buyers selling their primary residences in the San Francisco Bay Area.
Already on a steady growth trend for the past few years, Reno and Carson Valley showed a more stable climb with 4% increase in sales volume and 7% growth in sales price as compared to this time last year. Consistent with the upward trends in Northern Nevada, third quarter showed a 139% uptick in homes sold for over $1 million with 56% of those sales being all cash transactions.
Agents are reporting an uptick in demand for Nevada homes as California many buyers have experienced or plan to experience liquidity events and are motivated by Nevada tax benefits. Demand is also driven by buyers coming from higher tax states such as New York and metro areas such as Chicago.
Just up the hill from Reno, the Nevada side of Lake Tahoe was booming with a 47% increase in single family home sales for Incline Village / Crystal Bay and a 25% uptick for Lake Tahoe’s East shore including Glenbrook and Zephyr Cove.
With a consistently limited supply and newly heightened demand, the competition for Tahoe lakefront homes proved to be fiercer than ever. Incline Village / Crystal Bay single family lakefront sales jumped by 175% with 11 sales versus 4 by this time last year. Moving into fourth quarter, be prepared to spend anywhere from $15.5 million to $44 million for a lakefront home on Incline’s renowned Lakeshore Boulevard.
With TRPA’s lottery allowing only five new pier permits a year for the entire Lake, piers are a hot commodity. Buyers are seeking out the few available properties with desirable features such as panoramic lake views, easy access to the shoreline and amenities including sandy beach, pier, and protected coves.
East Shore revealed another lakefront bright spot with 117% growth in sales volume and a record $38,000,000 sale for that side of the lake. South Lake Tahoe’s lakefront market was up 133% coupled with a 185% improvement in median sales price ($3,492,500 as compared to $1,227,550 last year). Northshore lakefront sales were up by 120% with a high sale of $9,500,000.
According to Anne Wulff, the Vice President for Sierra Sotheby’s International Realty in Incline Village, cash transactions for the Incline Village market were up 183% in 2020. Similar “cash is king” stories across resort markets suggests that capable buyers are leveraging all cash offers to win competitive situations in a time when mortgage rates are at historical lows.
According to the brokerage community, many buyers have simply thrown in the towel and put their house hunting on hold until the market calms down.
Other exhausted buyers are turning their property search outward to more rural areas such as Plumas County and the Sierra Foothills for more space and more buying power. However, with an abundance of demand inventory is getting tight in those areas too with buyers requesting quicker closings than lenders and title companies can accommodate not reserved about requesting concessions from sellers.
For buyers who are serious about leaping into a fast-paced resort market we recommend that you find an experienced local agent, get pre-qualified with a local lender and be prepared to move fast when you find the right property.
To see how the market is performing in your favorite Reno, Tahoe or surrounding area market visit tahoemicroreports.com or click here.