Tahoe real estate on bullish trend
The Wall Street bull of 1997 helped pull South Shore real estate sales out of the mire where it struggled at the beginning of that year.
Among the trends that suggest good real estate news for 1998, real estate agents in the area are seeing a dramatic increase in cash sales for high-end houses.
“That tells me, there are a lot of people with money around; liquid money (not tied up in investments),” said Pat Colon with Century 21 Tahoe Pines Realty on the Nevada-side of the South Shore.
Colon and a panel of five South Shore real estate agents gathered last week to explain trends in the industry.
About 25 percent of Nevada home sales and 30 percent of condominium sales have been for cash, Colon said.
“A lot of cash buyers are typically for high-end properties,” she said.
In the Tahoe Keys, Adele Lucas with The Prudential California Realty, sold three Keys homes for cash in 1997.
Realtors are also seeing strong sales of townhouses, considered a good buy for the introductory vacation home buyer.
“Townhouses (in the Keys) are selling four days after they’re on the market,” said Lucas, who specializes in Tahoe Keys property.
“It marks the return of the vacation-home buyer,” said Molly Blann, of Aspen Realty, who is also the regional director for the California Association of Realtors.
“Close to 50 percent (of sales) are second homes.”
Such cash buyers and second home shoppers are often from Silicon Valley and cashing in stock options to buy real estate, Blann said.
“In 1997 we see more money coming out of the stock market,” said Doug Rosner of Century 21 South Tahoe Realty. “That benefits real estate.
“The prognosis for 1998 looks great.”
“This has probably been one of the more active Januarys I’ve seen for business,” said Mark Royer of Century 21 South Tahoe Realty.
In Nevada, Colon said, homes are selling for 92 to 93 percent of their list price.
Excluding a couple multi-million dollar sales such as the Whittell/Dreyfus estate, there were 119 transactions in 1997 on the Nevada side, up from 110 reported the previous year.
The median price of a condominium in Nevada was $115,000 and took an average of 253 days to sell. Homes took 279 days to sell with an approximate median price of $350,000, up from $305,750 in 1996.
The approximate median price for homes sold on the California side – city, county and Tahoe Keys – was $139,500 and took 197 days to sell.
Due to a change in the organization contracting to gather the data, the exact median price – the point half way between the low and high numbers – was not available for 1997 sales.
The ratio of selling price to listing price was 94.4 percent in 1997 and the number of sales, at 495, was about the same as in 1996.
Despite rising prices, “Tahoe is still a good investment buy,” said Royer, “especially compared to the Bay Area.”
It’s more than a sellers’ market, however. Buyers are also benefiting from low interest rates, a range of financing options particularly for first-time buyers, and a general improvement in the economy.
“South Lake Tahoe has about as normal a market as I’ve ever seen with about an equal number of buyers and sellers,” Rosner said.
Interest rates are “extremely attractive” and expected to remain so, according to John Forgie with Reliance Mortgage Capital.
“The general trend is flat to downward,” he said.
On Tuesday, the rate for a 30-year fixed mortgage with no points was 7.125, up slightly from six and seven-eighths a week ago but still historically low.
“We’re staying fairly busy with refinancing to lower monthly payments,” Forgie said.
With trends so encouraging, more and more people are becoming home-owners and existing homeowners are buying better homes.
“People are getting more bang for their buck,” Royer said. “People can now afford more expensive homes than they could a year ago.”
As a result, real estate inventory on both sides of the state line is unusually low and a previous glut of new homes in the county has stabilized.
“(Supply and demand) are near parity,” Rosner said.
On the California side last week there were 60 fewer listings than a year ago, about 12 percent less.
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