Real Estate: A cloudier crystal ball
Weekly real estate update
Statistics gathered from the Incline Village Multiple Listing Service on Sept. 27.
Houses Condos PUDs
For Sale 58 18 9
Under $1 million 4 15 6
Median Price For Sale $2,395,000 $649,000 $929,500
YTD Sales 2020 183 169 59
YTD Sales 2019 123 125 45
New Listings 11
In Escrow 14
Closed Escrow 24
Range in Escrow $445,000 - $6,200,000
These statistics are based on information from the Incline Village Board of Realtors or its MLS as of Sept. 27.
Back in April we wrote an article with a similar title, but the view on the horizon is murkier than ever when it comes to real estate.
While things are humming along at Lake Tahoe, not all of the country is going to fare well in the next six to 12 months. But let’s start with the Lake Tahoe real estate market before we delve off into other areas.
The recent fires have potentially contributed to a slight damper on sales activity, although overall the local market remains very strong. It’s not great looking at properties with the lake shrouded in smoke. Also, some buyers become reticent when seeing the heavily forested environs of Lake Tahoe. Life in the mountains is not for everyone. Buyers have to weigh the positives of living at Tahoe versus the potential dangers of wildfire in a residential/wildland interface.
Ski season is coming up in a few months. Whether the resorts will figure out how to make it work physically, socially and financially remains to be seen. The amount of snowfall is always a huge factor in determining whether or not ski season will be successful. Concomitant with that are the vacation rentals and all of the economic flows derived from large numbers of visitors during ski season.
Some property owners depend on those premium weekly rates over Christmas, New Year’s and President’s Day. Those three weeks can account for a disproportionate amount of annual vacation rental income at many properties.
The Christmas and New Year’s holidays could be bountiful, a bust or somewhere in between. Depending on what is happening with the coronavirus pandemic (along with the snowpack) will determine whether the usual festive crowds descend on the Lake Tahoe basin. If the world is in a more positive mood medically speaking, there could be an uptick in real estate sales over the holidays. However, the opposite could be true if families decide to stay home and hunker down.
Speaking of winter, many of the new buyers rushing to purchase properties during the pandemic have never lived in the type of climate experienced at Lake Tahoe. What percentage of the people purchasing properties as full-time residences in 2020 will be putting their houses up for sale in two to three years?
If you spent a couple of decades coming up to Tahoe to enjoy all of the recreational activities but have not lived through at least two or three winters, some surprises await you. We could see a surge of new listings in the spring of 2023 or 2024 if we get a monster big winter along the way.
Prices have been in a fairly steady uptrend since January 2012. But how much longer do they have to run? With the inventory being at historical lows combined with strong demand one would think the move upward would continue. That’s probably going to be true for residential property in the Lake Tahoe basin. But maybe not so for commercial properties here if small businesses continue to fail.
Whether or not renters start getting evicted for nonpayment of rent at the start of 2021 is a huge variable. Tenants who are unemployed and landlords carrying mortgages plus other expenses could find themselves in a tenuous situations just a couple of months down the road. Will distressed landlords flood the market with properties rather than risk losing them to foreclosure?
The rate at which a vaccine for the coronavirus (or highly effective therapeutics) can be developed and distributed is the biggest factor in the entire equation. We are not holding our breath that will be happening anytime soon. One of our concerns that clouds forecasting is that the true efficacy of the vaccines being tested is difficult to ascertain.
In a routine vaccine study, volunteers get a shot and return to their normal lives. But people testing the COVID-19 vaccines are going back to a life of little social interaction, mask wearing and other safety measures.
The unfortunate reality is that the uncertainties created by the pandemic, the lack of any vaccine for any previous type of coronavirus and the manner in which the new vaccines are being tested make our crystal ball the cloudiest it’s been since 2008.
Don Kanare is the founder and Sabrina Belleci is the owner / broker of RE/MAX North Lake.
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