Cheyanne Neuffer | Tahoe Daily Tribune
Thursday, March 11, 2021
This past year has been a curveball for real estate in the Lake Tahoe Basin. While prices were already steadily increasing, the pandemic and mass exodus from heavily populated areas that followed blew up the housing market.
Online real estate platforms show historically low inventory along with the skyrocketing prices all around the lake.
Real estate brokers both agree that low inventory and rising prices will continue for the foreseeable future.
California has seen six years of double digit growth in sales, said Deb Howard, broker and owner of Deb Howard & Co.
As of last week on the South Shore, Howard said, there were 51 residential listings with a median home price of $1,275,000. There were 99 pending sales with a median price of $750,000, with the overall median home price at $673,000.
California Association of Realtors recently updated their 2021 forecast to show an increase of home sales by 11% and 8% increase in home appreciation.
Howard said at this time last year, the median home price was $435,000. This shows a current market upswing of 54%, and sales have doubled since this time last year for the same period.
However, more narrowly in the basin, similar trends are occurring.
“Much of our current markets in both California and Nevada have been shaped by the lack of inventory, Bay Area business models and changes in the response to the pandemic,” Howard said.
Howard refers to the shift of those from out-of-town coming to the basin last year as the “pandemic migration.”
“Impacts of the pandemic and exacerbated by this migration is the absorption of what was already a limited supply of inventory and fueled a huge demand for our every real-estate product, be it cabins to lakefront and everything in between,” Howard said.
With new business models such as remote work, along with the ability to live in a desirable location, the pandemic exacerbated an already limited inventory and competition by creating a huge demand for the real estate at Lake Tahoe whether it was a small cabin or lakefront property.
The current absorption rate is below 1% and continues to trend lower, which, simply put, means there are more people wanting to buy homes than are available leading to an absolute sellers market.
“We will continue to see high demand with very limited supply,” Howard said in regards to her spring forecast.
Howard believes those who bought homes in the basin during the “pandemic migration” are here to stay even if schools open and vaccines are more available. She predicts new buyers will at least be here for the 5-7 year life-cycle of owning a home.
“Those that went through the season’s highs and lows mostly likely will be here to stay,” she said.
Sabrina Belleci, broker and owner of RE/MAX North Lake Tahoe, says that even if homeowners decide to return after schools open, she forecasts they will keep their homes as second homes.
She said a majority of people buying homes in the last year were from out of the area but familiar with the basin, whether it was for vacation or a second home. Many with a second home made it their primary residence.
However, those who have been in the area for a while are seeing enormous equity in their homes, inspiring them to continue to sell.
As homeowners see their property value skyrocket, Realtors forecast they will continue to sell and that there will be an “uptick” especially post-pandemic.
“There is a pent up demand for getting out and enjoying life again,” said Howard.
Howard also predicts that after the pandemic, people will be looking for a change and the more widespread availability of the vaccine will bring more feeling of safety to do so, which could potentially free up inventory in the future as communities become more vaccinated.
“This will free up a bit of inventory and hopefully we will see a more balanced marketplace for our residents, but also local housing, which is problematic as it relates to the spiraling home prices,” said Howard.
Belleci says she sees real estate in the basin continuing on the same trajectory with inventory opening up “a little” in the spring, but she does not see the demand dropping unless there are unforeseen economic repercussions.
Belleci says that while competition from buyers is still high, she has been seeing it dropping a bit in the recent months. Even as competition begins to minimize, Belleci says that people are still getting discouraged with the unbalanced market, but there is hope.
Belleci says that buyers still need to expect to pay over and above to get a seller to accept, and buyers will still need to be prepared to make several offers before being accepted.
Howard says there is hope due to the low interest rates, but the best option for buyers who don’t have an enormous offer is to consider properties like duplexes or mother-in-law units that have the potential to be rented out for additional income to help make payments.
Cheyanne Neuffer is a reporter for the Tahoe Daily Tribune; this story was first published March 7 by the TDT and is republished here with permission.
