Home prices keep rising
While average home prices at the South Shore continued to rise this summer, at least one Realtor said there are indications the market is leveling off from its record pace of 20 to 25 percent per year over the last five years.
“In a word: It has stabilized,” said Deb Howard.
Howard has long been one of South Shore’s top producing real estate brokers. She also has been president of the South Lake Tahoe Chamber of Commerce, president of the Lake Tahoe Visitor’s Authority and president of the South Tahoe Association of Realtors. Five years ago, she started her own real estate company, Deb Howard & Co.
“We are experiencing a much anticipated market correction, which has a stabilizing effect,” Howard said.
Selling agents are no longer looking at the house that sold down the street and adding 2 to 3 percent to determine a home’s selling price. Now, they are using that last comparable sale as the sale price, Howard said.
South Shore’s market is still strong, perhaps because it is a resort community, she said. In other markets, prices are falling. The Bay Area is showing signs of cooling off as well, according to news reports.
Average home prices for South Lake Tahoe rose around 5 percent from June to August this year. June’s average stood at $425,000, rising to $430,000 in July, then to $446,000 by the end of August, according to Madeleine Gutierrez, president of South Tahoe Association of Realtors. That’s a 25 percent increase from August 2004, when prices averaged $355,000.
Each average includes a year of sales. The numbers are for homes sold in California between Meyers and Stateline.
However, more homes are on the market now than in recent years. There are 270 homes for sale now, compared to 172 in September of last year. In September 2003, there were 253 homes for sale, according to Gutierrez. Their data did not extend beyond September 2003.
Gutierrez attributed the increase to a long winter, which put off the start of the summer selling season. In February, there were only 70 homes for sale.
“In the past few weeks, in anticipation of this market correction, I’m seeing a lot of folks who are putting their property on the market,” Howard said.
“For some, they want to get out before the snow flies. But a lot of people have been timing the market, waiting for the top of the market and they are starting to see that perhaps this is it.”
Howard predicts home prices will continue to rise, from 7 to 12 percent in the next year. Baby boomers and 1031 tax-deferred exchanges will continue to drive the resort market, she said.
“Resort real estate is a very strong and very attractive market, and has a great deal of demand for it,” Howard said.
The average number of days a home is staying on the market in 2005 is 90 days, slightly shorter than years past. In 2004, it took an average of 101 days to sell a house. In 2003, it was 111 days.
Interest rates have dropped slightly in response to Hurricane Katrina.
“In the past two weeks, rates have dropped substantially, depending on the product, 1/4 to 1/2 percent,” said Chris Probert, a loan officer and producing manager of Vista Mortgage at Stateline. About 70 percent of the loans they broker are for people from out of town.