Market

Looking back in hindsight the realtor consensus pegged 2012 as the bottom of the market.

Sierra Sotheby’s International Realty Listings
Depressed home pricing motivated buyers due to historically low-interest rates which averaged 3.657% for 30 year fully amortized conforming loans. 

 

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

And now back to your regularly scheduled program, Lake Tahoe

The 2015 – 2016 season may turn out to be the perfect winter.

Everyone relishes the thriving economic conditions after suffering through a series of abnormally dry winters.

Most realtors in the Lake Tahoe region point to a home and second home market that has been on an upswing for several years.  

In fact, Tahoe Mountain Realty said …

“Sales in the Lake Tahoe region surpassed $1 billion for the third consecutive year.” 

Tahoe Mountain Realty Property Alert

The absorption rate — the supply of how many homes are for sale compared to the supply of properties that were in demand and could be sold at the current sales pace —  revealed a more balanced market.

Tahoe Mountain Reality wrote that 

“the region is now balanced with a 6-months supply available.”

In the luxury real estate market Lake Tahoe experienced the most significant surge in new home construction in over a decade especially in 

  • Martis Camp, 
  • Gray’s Crossing, 
  • Lahontan, 
  • Schaffer’s Mill 
  • and Old Greenwood.

5-Year Time Frames from 2009 — 2014

Not that long ago, during the winter of 2011 – 2012, the absorption rate for South Lake Tahoe was driven by the trend of short and bank-owned (REO) sales. 

That market was out of balance which realtors say is roughly 2 to 4-months supply of inventory.  

You’re in a “buyers market” if it takes longer than a 4 months absorption rate.  

Buyers simply have a greater selection of properties to choose from. 

 If the sales pace picks up and only takes an estimated 2 months or less to clear the inventory of homes, then you’re in a “sellers market.” 

Sellers face less competition from fewer available choices for motivated buyers.

South Lake Tahoe, realtors claimed in 2012, hadn’t seen a balanced market for quite some time. 

Looking back in hindsight the realtor consensus pegged 2012 as the bottom of the market.

Luke Curran wrote in 2014 how the Lake Tahoe real estate market at the end of 2006 and the beginning of 2007 was stronger than ever.  

But, within a span of a year home values dropped like a stone.  

To the bottom of the lake.

If you had wanted to sell, you missed your top dollar opportunity.  

If you had the cash and a little foresight you could have taken advantage of the decline in prices.

Kelly Smith in the fall of 2010 speculated about Truckee homes, condos and lots sales between 2008 to 2010 picking up due to the declining values in both Truckee and Northstar.

Writing about West Lake Tahoe over the previous 3 years Kelly said the decrease in value on average amounted to a historic trend 

North Lake Tahoe from Incline Stateline to Tahoe City didn’t fair any better. 

David Westfall pointed to the impact of California’s long-term drought on the local ski and snowboarding resorts.

“Perhaps no other community was as impacted by successive dry winters as Northstar.” 

But the timing was ripe for substantial investment in Northstar from … 

  • Vail Resorts, 
  • Mountainside Partners and 
  • Kennedy-Wilson. 

Luke Curran described how real estate market differs among subdivisions of the Lake Tahoe area.

For instance, condos on the west shore are pricier, while in 2014 the market for condos at Squaw and Alpine hadn’t grown as rapidly as other areas.

During the winter of 2012 -2013 in February the Yee Hedley Group compared year-end 2012 to 2011.  

The Yee Hedley Group Featured Listings

They found positive signs in the MLS listing inventory.  “

It was at an all time low, just like the good old days back in 2004 and 2005.

That’s not all.  

They documented signs of 

… dramatic improvement upon comparing overall home sale statistics from 2012 to 2011.”

David Westfall, a month earlier, in January 2013, assessed the North Lake Tahoe and Truckee markets.  

He found a silver lining for single family homes.

“Depressed home pricing motivated buyers due to historically low-interest rates which averaged 3.657% for 30 year fully amortized conforming loans.” 

Sotheby’s International Realty published year-end reviews of Lake Tahoe sales from 2012 to 2015. 

Sierra Sotheby’s International Realty Listings

In addition to the numbers they framed the real estate market.

“It spans 72 miles of Lake Tahoe shoreline, two state lines and a handful of California and Nevada counties and four multiple listing services – North & West Shore, East Shore, Incline Village and Truckee.”

Sotheby’s agreed with Luke Curran who wrote in the spring of 2014, 

“Buyers want a low price on a home and after the value of the home has gone up, and they sell it, they want a profit”.  

Before you make the big financial decision to purchase or sell a home in the Truckee /Lake Tahoe you need to drill down into the micro market data. 

Sotheby’s farms the 

  • North & West Shore, 
  • East Shore, 
  • Incline Village, 
  • Truckee, and 
  • South Lake Tahoe markets.

Luke Curran broke the Lake Tahoe down into five areas he covered: 

  • North Shore, 
  • West Shore, 
  • Squaw / Alpine, 
  • Truckee and 
  • Northstar.

David Westfall breaks Tahoe and Truckee into 10 micro market neighborhoods, 5 apiece.

Tahoe:

  • Alpine Meadows
  • North Shore
  • Squaw Valley
  • Tahoe City Area
  • West Shore

Truckee:

  • Donner Lake
  • Glenshire Area
  • Golf Course Communities
  • Northstar
  • Tahoe Donner

Part Two: Is Tahoe’s Real Estate Market About to Repeat Itself? Will You Miss Out?

Steps:

22) Selectively evaluate the best quality-of-life communities to live in and weigh the tradeoffs of risk and rewards for accruing real estate appreciation along a progression of rural and small towns that meet what your pocket books can afford.

25) Compare what “life” was like in those communities before the Great Recession, how resilient each was during the economic downturn, and to what degree did each bounce back after with any “economic hangover.” 

30) Review headlines and relevant news as far back as you can find online to surface each community’s unique pulse and identify information necessary to make your decision. Is there a “ticking time bomb” issue you may uncover that eliminates the resort from your bucket list? Search on Topix.com.

34) On your visits look for any newer developments that may trigger changes in neighborhood patterns. New construction in or around the neighborhood? Major regional economic adjustments? Transition from households with children to ones that are empty nests? Rezoning, and dramatically rising/falling land values?

 

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