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Dan Thrift / Tahoe Daily Tribune / Marlene Pierce, a real estate agent with Dickson & McCall Realty, discusses the changes in the housing market on Thursday inside a Tahoe Island home.
With the industry warning of a slowdown in home ownership, many South Shore real estate agents say now may be the time to find a bargain.
With 2005's fluctuating market coming to a close, the usually robust South Shore real estate market has shown signs of leveling off. A slower buying season brings to an end a 5 percent monthly increase in property values. These values have gone up 11 percent for single family homes sold this quarter compared to last year. Homeowners had seen a 27 percent increase from the prior year through last October, the South Tahoe Association of Realtors has reported.
Low interest rates, a limited inventory and a lure of Tahoe's quality of life have fueled a gain since 1999 that's seemed unprecedented at times. The median price of a single family home listed on the South Shore has doubled since 2001 to $525,000, according to the association. But even though the selling prices remained steady to last year's fourth quarter, the listing prices have started dropping in recent days.
Nonetheless, this resort area doesn't appear to have the same dip or bursting bubble of the Bay Area, the primary feeder market for second home buyers here.
Dickson & McCall agent Marlene Pierce lowered by $20,000 her listing on Anita Avenue, a 1,010-square-foot home with a large lot, mud room and vaulted beam ceiling. It's going for $465,000.
With 2005's fluctuating market coming to a close, the usually robust South Shore real estate market has shown signs of leveling off. A slower buying season brings to an end a 5 percent monthly increase in property values. These values have gone up 11 percent for single family homes sold this quarter compared to last year. Homeowners had seen a 27 percent increase from the prior year through last October, the South Tahoe Association of Realtors has reported.
Low interest rates, a limited inventory and a lure of Tahoe's quality of life have fueled a gain since 1999 that's seemed unprecedented at times. The median price of a single family home listed on the South Shore has doubled since 2001 to $525,000, according to the association. But even though the selling prices remained steady to last year's fourth quarter, the listing prices have started dropping in recent days.
Nonetheless, this resort area doesn't appear to have the same dip or bursting bubble of the Bay Area, the primary feeder market for second home buyers here.
Dickson & McCall agent Marlene Pierce lowered by $20,000 her listing on Anita Avenue, a 1,010-square-foot home with a large lot, mud room and vaulted beam ceiling. It's going for $465,000.
"And she's talking about lowering it more," Pierce said.
Like others, the longtime agent predicted the slowing trend would reflect sellers listing their homes for more reasonable prices - with a few homeowners admitting to testing the waters by asking higher-than-anticipated prices. Pierce believes the slowdown may result in a weeding out of less successful agents. The number of agents has more than doubled in the last decade.
"Now the slowdown is going back into old times of it being a seasonal market," she said.
David Kurtzman of Aspen Realty agreed, noting how the shift has made buyers more discriminating.
"There's definitely a slowdown. We've gone through years when activity seemed continuous. It didn't matter what season. Now we're shifting to a seasonal market in which buyers have more choices - which creates much more of a balanced market," said Kurtzman, an agent for 32 years. "Before they felt like they'd have to grab the train. Now they feel when the train's in the station, they can pick their car."
Still, Kurtzman also believes "bubble sitters" may get a bit of a surprise if they wait too long to buy because he doesn't expect a significant drop in prices.
Like others, the longtime agent predicted the slowing trend would reflect sellers listing their homes for more reasonable prices - with a few homeowners admitting to testing the waters by asking higher-than-anticipated prices. Pierce believes the slowdown may result in a weeding out of less successful agents. The number of agents has more than doubled in the last decade.
"Now the slowdown is going back into old times of it being a seasonal market," she said.
David Kurtzman of Aspen Realty agreed, noting how the shift has made buyers more discriminating.
"There's definitely a slowdown. We've gone through years when activity seemed continuous. It didn't matter what season. Now we're shifting to a seasonal market in which buyers have more choices - which creates much more of a balanced market," said Kurtzman, an agent for 32 years. "Before they felt like they'd have to grab the train. Now they feel when the train's in the station, they can pick their car."
Still, Kurtzman also believes "bubble sitters" may get a bit of a surprise if they wait too long to buy because he doesn't expect a significant drop in prices.
And in a market with 300 active listings, both sellers and buyers may be forced to be creative.
Buyers need a job with at least a $140,000 annual income, according to the California Association of Realtors.
"With typical Tahoe wages, it's difficult unless you already own a home. Wages have not gone up," Kurtzman said.
Otherwise, they either need to inherit into the triple digits or trade up from an existing home that has raised its value.
Pierce indicated first-time home buyers have one important advantage to making the plunge into a home. If they opt into an interest only loan, their equity grows faster than the interest rate. The rates now sit at 6.6 percent and are expected to level off at 7 percent.
Buyers need a job with at least a $140,000 annual income, according to the California Association of Realtors.
"With typical Tahoe wages, it's difficult unless you already own a home. Wages have not gone up," Kurtzman said.
Otherwise, they either need to inherit into the triple digits or trade up from an existing home that has raised its value.
Pierce indicated first-time home buyers have one important advantage to making the plunge into a home. If they opt into an interest only loan, their equity grows faster than the interest rate. The rates now sit at 6.6 percent and are expected to level off at 7 percent.
But Theresa Souers of Century 21, Tahoe Paradise pointed out the South Lake Tahoe market is still driven by the second homeowners. She's found these discriminating buyers are concerned with snow removal, maintenance, traffic, road conditions, heat efficiency and utility costs when they're looking in the wintertime.
"Sellers will find it to their advantage to create an atmosphere that is warm and inviting during this time," she said.
Although keeping driveways and walkways safe and clear may be more of a challenge showing homes in the winter, sellers should find comfort in knowing their homes have held the value, Souers indicated. The caution of the alleged market bubble bursting may lie with it being a self-fulfilling prophecy. If one says homes are overinflated enough, they may indeed become that because the claim may breed hesitation in the market.
With that, the U.S. Commerce Department reported sales of new homes fell 11.3 percent in November compared to October's 503,000 units.
The majority of sales on the South Shore is in existing homes.
"Sellers will find it to their advantage to create an atmosphere that is warm and inviting during this time," she said.
Although keeping driveways and walkways safe and clear may be more of a challenge showing homes in the winter, sellers should find comfort in knowing their homes have held the value, Souers indicated. The caution of the alleged market bubble bursting may lie with it being a self-fulfilling prophecy. If one says homes are overinflated enough, they may indeed become that because the claim may breed hesitation in the market.
With that, the U.S. Commerce Department reported sales of new homes fell 11.3 percent in November compared to October's 503,000 units.
The majority of sales on the South Shore is in existing homes.
