Sellers market continues at Tahoe, transplants here to stay

Last year was a curveball for real estate in the Lake Tahoe Basin. While prices were already rising steadily, the pandemic and mass exodus from densely populated areas blew up the real estate market.

Online real estate platforms have historically low inventory levels and skyrocketing prices around the lake.

Real estate agents agree that low inventory levels and rising prices will continue for the foreseeable future.

According to Deb Howard, broker and owner of Deb Howard & Co., California had double-digit sales growth in six years.

There are currently 51 residential properties on the south coast, with an average home price of $ 1,275,000, according to Howard. There are 99 pending sales with an average price of $ 750,000 with the average total home price being $ 673,000.

The California Association of Realtors updated their forecast for 2021 to show an 11% increase in home sales and an 8% increase in home value growth.

According to Howard, the median home price at that time was $ 435,000 last year. This shows a current market upturn of 54% and sales have doubled since that time last year over the same period.

However, similar trends are occurring in the basin.

“Much of our current markets in California and Nevada have been shaped by inventory shortages, business models in the Bay Area and changes in the response to the pandemic,” said Howard.

Howard describes the relocation of those who came to the basin from outside the city last year as “pandemic migration.”

“The impact of the pandemic, compounded by this migration, is the absorption of an already limited inventory and tremendous demand for every real estate product, be it lakefront cabins and everything in between,” said Howard.

With new business models like remote working and the ability to live in a desirable place, the pandemic exacerbated an already limited population and competition by creating a huge demand for Lake Tahoe real estate, whether it was a small cabin or a small one Plot on the lake acted.

The current absorption rate is below 1% and continues to be lower, which simply means that more people are looking to buy homes than are available, resulting in an absolute sellers’ market.

According to Howard, property prices have increased 54% since last year alone, and sales have doubled and the number continues to grow.

“We will continue to see high demand with very limited supply,” she said of her spring forecast.

Howard believes those who bought houses in the basin during the “pandemic migration” will stay here even after schools are open and more vaccines are available. She predicts that new buyers will be here for at least the 5-7 year life cycle of owning a home.

“Those who have gone through the ups and downs of the season will most likely stay here,” she said.

Sabrina Belleci, realtor and owner of ReMax North Lake Tahoe, says that even if homeowners return after schools open, they will keep their homes as second homes.

She said the majority of the people who bought homes last year were not from the area but were familiar with the pool, be it for vacation or as a second home. Many with a second home made it their primary residence.

However, those who have been in the area for a while see tremendous equity in their homes, which inspires them to keep selling.

As homeowners see their property values ​​soar, realtors predict that they will continue to sell and that there will be an “upward trend” especially after the pandemic.

“There’s a pent-up demand to get out and enjoy life,” said Howard.

Howard also predicts that after the pandemic, people will look for a change and the wider availability of the vaccine will bring a greater sense of security, which could potentially lead to inventory spills in the future as communities get more vaccinated.

“This will free up some inventory and hopefully we’ll see a more balanced market for our residents, but also for local housing, which is problematic in the context of soaring house prices,” said Howard.

Belleci says she sees real estate in the basin stay the same path and inventories open up “a little” in the spring, but she doesn’t see any decline in demand unless there is an unforeseen economic impact.

Belleci says that while buyer competition is still high, it has eased somewhat in recent months. Even as competition begins to diminish, Belleci says people are still discouraged from the unbalanced market, but there is hope.

Belleci says buyers still need to expect to pay extra to get a seller to accept, and buyers still need to be willing to make multiple offers before they are accepted.

Howard says there is hope because of the low interest rates, but the best option for buyers who don’t have a huge supply is to consider properties like maisonettes or mother-in-law units that have the potential to be rented out for additional income to make payments Afford.

“We left our locals behind,” said Howard.

Belleci and Howard both say that work is being done in the basin to make housing more affordable.

“There are a lot of apartments in the pool, they just sit empty,” said Belleci. “Over 70% sit empty.” Many of the empty houses are second homes or short term rentals.

The Tahoe Regional Planning Agency is working with other partners on more affordable housing, housing, and incentives. In January the Board approved a 248-unit housing project in South Lake Tahoe south of the “Y” on excess land donated by the California Tahoe Conservancy. Last year, the TRPA established the Tahoe Living Housing Working Group to bring lawyers, the public, and others together to discuss policy changes for more affordable housing in the area.

Due to Measure T, many vacation rental permits in South Lake Tahoe are expiring, which could potentially open more inventory. However, the brokers are waiting to see what impact this will have.