South Shore Real Estate Market Update
It’s almost summer here in South Lake Tahoe, and while the temps aren’t too hot with this recent cold front, the real estate market is scorching. We haven’t seen buyer activity like this in years. I’ve seen several properties receive multiple, competing offers. They are often selling for more than list price. Things are getting crazy here, and many of us real estate professionals are putting in long hours in order to keep up.
At the moment, there are 94 homes in escrow in South Lake Tahoe (we hit 100 last Friday). We haven’t seen this many homes in escrow since July 2005, which was a month before the peak of the market.
Our overall inventory is shrinking as well. Currently, there are 381 single-family residences for sale. Last year there were 414. The year before, 522. In May 2006, there were 424. With Tahoe homes reaching affordable prices and buyer confidence increasing, look for these trends to continue.
Speaking of prices, home prices have leveled off since the start of the year. I’ve checked the homes currently in escrow, and median sale price will continue to hold steady for at least the next couple months. Perhaps we are at the bottom of the market? Statistics are increasingly pointing in that direction. A balanced market is traditionally defined by five to seven months of inventory on the market. At 6.1 months of inventory, we have already reached that point in the under-$300,000 price band. We are quickly approaching that point in the $300,000-$400,000 price band. As inventory continues to decrease and sales increase, the statistics should catch up and begin to truly reflect how busy our market is.
A couple caveats …
Ninety-four homes in escrow today can’t be compared to 94 homes in escrow a few years ago. The reason for this is short sales. Short sales typically take longer to close than a normal escrow. Thus, with some homes sitting in escrow for long periods of time, this inflates the total. That said, however, only 15 short sale homes went into escrow over 45 days ago. Subtract these from our total and the 79 remaining homes in escrow still hasn’t been matched since September 2005, which was virtually the peak of the market.
In addition to this, the traditional definition of a balanced market, five to seven months of inventory, may not apply in this market. Previous markets have not been affected by foreclosures like this. A new wave of foreclosures could drive prices down further. On the other hand, prices have leveled off for the last half year. And no one can argue that our shrinking inventory is a good sign of rebound.
All that said, now might be the time to buy in South Lake Tahoe. And with another amazing Tahoe summer approaching, what better a time to come and start shopping!
– Drew Kondo is a real estate agent with Deb Howard & Co. in South Lake Tahoe.
Click here to visit us online: http://www.southtahoehouses.com
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