Real estate: A wild first half amid pandemic
Special to the Tribune
Weekly real estate update
Statistics gathered from the Incline Village Multiple Listing Service on July 5
Houses Condos PUDs
For Sale 57 29 11
Under $1 million 5 16 4
Median Price For Sale $2,879,000 $949,000 $1,495,000
YTD Sales 2020 62 78 25
YTD Sales 2019 73 71 29
New Listings 7
In Escrow 21
Closed Escrow 21
Range in Escrow $80,000 - $6,750,000
These statistics are based on information from the Incline Village Board of Realtors or its MLS as of July 5.
It has been a lot like Mr. Toad’s Wild Ride for the citizens of planet Earth during the first six months of 2020 and the Incline Village real estate market is no exception.
We started out in a plateau as it appeared that the current market cycle had matured. Then the coronavirus pandemic hit and there was a brief market freeze. After only a couple of weeks that was followed by an uptick in demand that has turned into what can only be described in late June as panic buying.
This is not to be confused with panic buying that occurs in stock markets, tulips or other types of speculative investments. Rather this is a result of pent up demand from people who were sooner or later going to leave dense urban areas and move to the relative calm and safety of the mountains. Instead of this paradigm shift taking place over a period of years it is being compressed into several months.
There are a couple of statistics that help to tell the story. For the first time in the history of the Incline Village real estate market there are more properties in escrow than properties for sale. Currently, there are 116 properties under contract but only 100 properties listed for sale on the Incline Village multiple listing service.
Even during the real estate boom prior to the Great Recession, we never came close to this type of ratio. But the extraordinary level of sales activity in May and June combined with historically low inventory levels has resulted in this unusual scenario.
There are currently 57 single-family homes listed for sale and only five of them carry price tags under $1 million. The median sale price of houses in 2020 is $1.5 million. However, that is likely to go up as the floor under prices continues to rise.
Of the 61 houses currently in escrow, 23 of them have price tags above $2 million. Normally we would expect to see about 25% of sales above the $2 million price target. But as both demand and prices continue to trend up for luxury homes, this segment of the market now comprises more than one third of all single-family residential sales.
The overall price range of houses under contract spans the gamut from $640,000 all the way up to nearly $10 million which means demand is strong across all sectors.
Condo inventory is near record lows with only 29 properties in this category currently for sale. There are 40 condos in escrow with several new listings in the highly desirable Third Creek complex. We had seen the inventory in this complex evaporate completely many times during the past few years.
The recent increase in demand combined with the traditional summer selling season has tempted several owners in Third Creek to list their properties recently. With a variety of different floor plans and square footage available, there is a brief window of opportunity for buyers looking for a place in Third Creek to check out the available properties.
It looks like it’s going to be a busy summer season for real estate all-around Lake Tahoe. The combination of seasonal visitors plus pandemic driven buyers looking to relocate from dense urban areas will continue to impact sales.
It appears that prices will continue to trend upward as demand remains strong. Instead of the final phase of a mature real estate cycle (which is how things looked at the start of 2020), we are entering what appears to be the beginning of the next leg upward.
Don Kanare is the founder and Sabrina Belleci is the Owner / Broker of RE/MAX North Lake.
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The warm temperatures and bright sunshine during the past week have resulted in the usual rapid springtime snowmelt around Lake Tahoe.