Don Kanare Lakeshore Realty 954 Lakeshore Drive Incline Village, NV 89451 Tel: 775-831-7000 E-Mail Don Quick Links Search the MLS Weekly Market Update Weekly Market Archives Current Listings Best Buys Read My Blog Contact Don Home Page Monthly News Letter Current Newsletter Archived Newsletters  |
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Click Here to See All of My Listings and Virtual Tours For Daily Updates on Incline Village Real Estate visit my web site at: www.InsideIncline.com This Months Articles: 716 BUNKER COURT - ON THE MOUNTAIN GC 3BR, 3.5 Bath, 3,674sq. ft., On Mountain Golf Course & Next to NV Conservation Land Stunning Sederquist Architecture with Open Beam Ceilings, Redwood Doors and Trim, Wraparound deck, Oversized 2 Car Garage, Offered for $1,900,000 INCLINE VILLAGE REAL ESTATE VS. THE S&P 500 I used to work in the securities business back in the 1980s doing pension fund investments and business and tax planning. I no longer give investment advice, but my background and training taught me some important principles. Always do a cost-benefit analysis because it's sometimes cheaper and better to rent than to buy. Diversify your investments and never put all your eggs in one basket (unfortunately a lot of Bernie Madoff's victims forgot about this principle). And determine which of your investments will be long-term, short-term and intermediate-term and regularly revisit your strategy for asset allocation. So what does all of this have to do with Incline Village real estate? If you look back at the last 10 years, the median price of single-family homes in Incline Village has far outperformed the S&P 500. According to MorningStar, "The S&P has never seen a 10-year stretch as bad as the one that ended last month. Over the 10 years through January, an investor holding the stocks in the S&P 500, and reinvesting the dividends, would have lost about 5.1% a year after adjusting for inflation." Now, there is really no way we can compare the performance of Incline Village real estate versus the S&P 500 over a 30 or 40 year period because there are so many different types of properties here in Incline Village it's really apples and oranges. What we can take from all of this however, is that well located properties in Incline Village and Crystal Bay, that are purchased at or below fair market value will tend to show significant appreciation over the long-term. And there is some type of mitigation to the downside risk because owning a piece of real estate gives you a tangible asset whereas stocks and bonds are pieces of paper that represent an investment in a business. There may be strategies for trading stocks, bonds and commodities that can provide a higher rate of return than investing in real estate over the long term. But you don't get the pleasure and enjoyment of sitting out on the deck on a sunny day in July at Lake Tahoe and soaking up the view from that stock certificate hanging on the wall. There are many tax benefits to owning a property in Nevada as your primary residence. Only your accountant or financial advisor can tell you how much you would save in income taxes (both personal and business), if you were to make Nevada your home. You might live several years longer breathing the clean mountain air and being out of the stress of the big city traffic jams and urban life by living full-time in Incline Village. The return on investment is not always measured in dollars. If you live a longer and happier life because you own a piece of Incline Village real estate then I say you've beaten the S&P 500, only in a different way. BEAUTIFULLY REMODELED ! - 2BR, 2BA, 1,111 Sq. Ft. - $559,000 2009 - 1st QUARTER MARKET ANALYSIS I just finished my review of the first quarter sales statistics and the results are rather enlightening. Overall unit sales declined 21% versus 2008 and while the median price of condos appears to have dropped another 5%, the median price for houses is actually going up. I know that sounds hard to believe, but of the 13 single-family homes that have closed escrow in 2009, eight of them sold for prices well above the median, with seven of them closing escrow at $1.9 million or higher. Looking at the median price for the past 15 months (this way we take all of 2008 along with the first three months of 2009 into account) we see the median price for single-family homes nudging slightly higher. I maintain the reason for this is not that home prices are going up in Incline Village, but luxury home buyers have the cash to strike great deals for properties in the higher price ranges. The vast majority of property owners in Incline Village and Crystal Bay have a lot of staying power and do not need to sell their properties for less than fair market value. Even the occasional foreclosure or short sale is not having any drag on the median price here. In contrast, we are still seeing softness in the condo market with the median price for the last 15 months having dropped to $495,000 versus $520,000 for all of 2008. And while the number of single-family residences sold in the first quarter of 2009 is almost identical to 2008, we have only had 9 condos close escrow so far this year versus 13 for the same time period last year. Free-standing condo sales have been almost negligible in 2009 with just 2 places closing escrow vs. 5 last year. So, there's not enough price data for me to draw any conclusions. The only thing I can say about this category is that demand for PUDs is down sharply. So, what does this mean for buyers and sellers of Incline Village real estate in 2009? If you are looking to purchase a condo, with 152 units currently on the market, only 64 sales in 2008 and only nine sales so far this year, there is clearly softness in the market and you have a lot of negotiating power as a buyer. Sellers will have to prepare their properties carefully for sale, paying particular attention to staging and even doing some upgrades if they want to be highly competitive in this difficult market. In single-family home sales, we've had 13 properties close escrow so far in 2009 versus 12 at the same time last year. There are currently four houses in escrow and three of them are well above the median sale price. We are basically seeing buyers who would normally be in the middle of the market (i.e. shopping for homes in the $800,000 to $1.4 million price range) sitting on the sidelines while the bargain hunters at the low end and the luxury shoppers dominate the marketplace. This does not bode well for anyone who is trying to sell a house in the moderate price range. I think the weakness in the midrange properties is primarily due to the fact that the vast majority of purchases in Incline Village are discretionary. Buyers shopping in the moderate price range can afford to be patient and wait for the property they are seeking. Bargain hunters on the other hand have found themselves engaging in multiple offer situations for properties priced under $700,000. Click Here to See All of My Listings and Virtual Tours 174 Third Creek - 3BR, 2.5BA, 1846 sq. ft., 1 Car Attached Garage - $859,000 VERY MOTIVATED SELLER!! See Prior Newsletters in 2009 See Prior Newsletters in 2008 May June July August September October December Copyright 2008 Don Kanare - All rights reserved. Inside Incline is entirely written and published each month by Don Kanare of Lakeshore Realty for property owners and others who have an interest in Incline Village and Crystal Bay. If you have any questions or comments, please contact me at 775-831-7000 or send an e-mail to: Don@InsideIncline.com |
| For Incline Village Real Estate Information or a Free Comparative Market Analysis of Your Property Contact Don Kanare Your Incline Village Real Estate Agent Lakeshore Realty - 954 Lakeshore Blvd - Incline Village, NV 89451 - 775-831-7000 |