Tahoe exodus continues; home prices remain strong: While real estate agents say the market has softened, the price of a home remains high
March 9, 2006
When Fran LeRoy thinks about moving away from Tahoe after nine years, she’s heartsick about leaving the mountains behind her Meyers home, which is now listed for $509,000.
LeRoy, 68, and her husband Ed, 70, bought the home in 1997 for $155,000.
“I like this room,” she said, glancing out the window at the view. But LeRoy soon gets more optimistic about moving when she considers cashing out for a dry, warmer climate with a nest egg lining their pockets. The LeRoys are having a custom house built in Kingman, Ariz., for $285,000.
With a presentable, cozy abode, the Leroys are a little surprised by having no offers. They listed it for $539,000 last October with one real estate firm, then dropped the price in January to $519,000 and switched agencies to Deb Howard & Co. They knocked $10,000 more off the price two weeks ago on their three-bedroom, two-bath home on Celio Lane.
“When I think of the houses we looked at when we moved here, I remember the trash I saw. I feel whoever buys this is getting a good deal,” she said. The place is spotless and charming.
Some agents, including Deb Howard, acknowledge the real estate market is cooling, despite the median on a single-family home at its highest price ever – $549,450. That’s the median price the sellers are asking. The median for homes sold in 2005 was $475,000 – still a 26 percent increase from the prior year, according to the South Tahoe Association of Realtors.
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“We’re just starting to see a slump in terms of sales in comparison to last year at this time,” Howard said of this current quarter.
Howard points out the promise of no snow shoveling and better wages driving people out of the market.
“The service industry people are moving out. The disparity of high prices and affordability and income has never been more apparent,” she said.
Theresa Souers of Century 21 Tahoe Paradise has seen three of her clients bail out of Tahoe. But several buyers are opting for telecommunication to maintain a work connection in an area where they can have “a better quality of life.”
Souers and Howard just returned from a resort market real estate symposium in Kona, Hawaii, where all the talk focused on baby boomers who can afford to buy a home “turning their interest toward real estate investments,” Souers said.
Although the second homeowners still dominate the market, the first timers are still interested. Robert Guebard just got his family of four into a 900-square-foot house on Julie Lane for $320,000 through the city’s first-time homebuyer program. The city had closed out the program this week on its last 2004 allotment. He put down $15,000 and matched the city’s $150,000 low-interest loan to move out of his Al Tahoe rental.
“I wanted to (buy) something. I couldn’t have done it without this program. Otherwise, we would’ve moved away,” he said.
Cathy Kope, who runs the city program, has watched as fewer people are able to use or ask for the program. It only covers a maximum $375,000 purchase price. That’s not even the median price of a single family home anymore.
“We don’t want to apply to the state for grant funding, if we can’t spend it. It will probably be on a on-hold basis. Hopefully, we’ll be able to apply for more funds later,” she said.
David Kurtzman of Aspen Realty said that as long as the job market doesn’t keep pace with the rising property values, fewer lower-income people will be able to afford a home.
“Wages don’t keep up. Jobs are leaving town. Based on the local wages for the average person in this community, it’s virtually impossible to buy a home without some form of assistance,” Kurtzman said.
With dipping markets all over California, rates on 30-year mortgages jumped this week to the highest level in 2 1/2 years – 6.37 percent. The fixed rates are believed to be driven by inflation worries in financial markets, The Associated Press reported.
The notion among some Tahoe agents is the rising rates won’t impact the resort markets as much.