Redevelopment and housing prices
The swings and shifts in South Lake Tahoe property values are less affected by redevelopment as regional trends.
But that wasn’t the intent, Redevelopment Manager Jaye Von Klug insisted Thursday.
“That was not our intent nor our desired outcome to have real estate values go up,” she said.
Rather, Von Klug said the city struggles with the possibility the upgrade may have a negative impact on the quality of life in South Lake Tahoe, with values driving up home prices out of reach to local residents.
The collision of these basic socioeconomic barometers begs the question of whether the government should interfere in that equation, a delicate balance it teeters on every day, Von Klug posed the question.
“We’re very concerned with becoming like places like Aspen, (Colo.), where people who work there can’t afford to live there,” Von Klug said, acknowledging an affordable housing workshop held today.
“We’ve experienced a huge spike. But it has less to do with redevelopment than the general economy, stock profits and vacation-home purchases,” said Doug Rosner, who runs Century 21 South Tahoe Realty, later adding national trends to the fray.
Rosner’s theories led the general consensus among other agents in town.
Coming out of a “dead” market in 1994 and a somewhat flat period from 1995 to 1997, property values in the last three years increased in most areas of Lake Tahoe by at least 50 percent across the board, he said.
And if you own in the Tahoe Keys, you’ve seen a 75 percent surge, he added.
Anyone who’s looking has witnessed the spike. But what’s in store for the area in the upcoming period?
“We may see values level out but not plummet,” he said, “especially the homes under $350,000.”
With that, comes the parity between buyers and sellers.
“Not too long ago, we had under 100 houses for sale in town. Now, we have 150. That’s a big leap,” he said.
The inventory is in the midst of rising through the spring until the seasonality of the summer kicks in and more buyers swallow up more homes.
Many of these buyers come from the Bay Area, which is experiencing its own leveling out of property values in the wake of massive dot-com business layoffs and failures.
“We’re totally affected by the Bay Area (economy),” he said. “I’m not sure if redevelopment is the primary driver of property values. We need to keep our eye on high tech.”
Recent reports have projected 80 percent of e-commerce businesses in the Bay Area to have gone under within the next decade.
The Internet-whiz-biz frenzy ties directly into the real estate market here and there.
There, the panic-driven days of bidding high on less-bang-for-the-buck homes are over.
But although the market appears to be settling, bargains are still few and far between, the San Francisco Chronicle reports. And in no way are we yet seeing the downturn that real estate took in the early 1990s, when California’s median home price dropped from $200,660 in 1991 to $177,270 in 1996, according to the California Association of Realtors.
Analysts still don’t know what is happening in the marketplace now, chief economists warn.
The consensus there, like here, is the market is leveling off, while the inventory is increasing slightly.
Nationally, new home sales fell 2.4 percent in February as the slowing economy depressed activity for a second consecutive month. The U.S. Commerce Department reported the decline in sales of new single-family homes last month followed an even bigger 10.8 percent plunge in January.
Still, even with the decreases, new homes were sold at a strong annual rate of 911,000 in the second month of the year.
Support Local Journalism
Support Local Journalism
Readers around the Lake Tahoe Basin and beyond make the Tahoe Tribune's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Your donation will help us continue to cover COVID-19 and our other vital local news.