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August 2008 2008 Sales Statistics as of 7/26/08 Houses Condos Free Standing Total Units Sold 2008 54 32 14 100 2007 84 52 23 159 For Daily Updates on Incline Village Real Estate visit my web site at: www.InsideIncline.com This Months Articles: FEATURED PROPERTY: 4BR, 3.5 Bath, 2,729sq. ft., natural landscaped low maintenance yard,
6 person sauna, 2 decks, oversized 2 car garage, new exterior paint. Offered for $1,125,000
UNREALISTIC BUYERS VS. DELUSIONAL SELLERS The Incline Village real estate market in 2008 can best be described as a bizarre confrontation between buyers who want to pay below fair market value and sellers who have priced their properties well above fair market value. This collision of unrealistic buyers and delusional sellers has resulted in a market stalemate. Year to date sales in units are down approximately 35% versus 2007, but prices for quality properties continue to hold firm. One only has to look at the sales of McCloud condos and Lakeview homes to realize that most properties are in a holding pattern. There are some exceptions such as high elevation homes on small parcels of land and small condos of lower quality all over Incline Village where prices have backed off a bit from their peak in 2005. The reality is that demand for these types of properties has pretty much dried up and the feeding frenzy of 2004 - 2005 is now a distant memory. So, why is it that buyers feel they can write offers significantly below fair market value on quality properties yet get disappointed when their offer is rejected? And why are sellers in many instances pricing their properties well above fair market value when demand has slackened from the peak years? The answer is really quite simple. Most buyers were unrealistic in 2004 and 2005 and thought that the only direction for prices was up no matter the quality or the location of the property. And traditionally in the United States, sellers have a tendency to overvalue their properties in spite of the evidence based upon the most recent comparable sales that would indicate otherwise. There is a long-held economic theory that people tend to follow the "herd mentality". What this means is that most people will join the crowd and follow a trend with the largest group of followers piling in at the very end of the trend. So, we had a veritable feeding frenzy in 2005 as buyers threw money at virtually any property for sale. Conversely, in 2008 we now have an epidemic of buyer paralysis. Those buyers who acted thoughtfully and independently of any particular trend are the ones who got the good deals in 2001 through 2004. They are also the ones who are purchasing the best values in our current market. Even if one were to make a blanket statement that 80% of the properties for sale in Incline Village are overpriced at any given time, that still means that 20% of the properties are priced close to fair market value. With our current inventory hovering just over 500 properties, this would indicate that there are somewhere around 100 relatively fairly priced properties on the market at the present time. On Monday, July 14 we saw 4 properties go into escrow. Three of these were homes in the $2 million price range and the fourth was a tiny parcel of raw land priced at $99,000 on which you can build a small freestanding condo in the upper reaches of Tyrolean Village. While buyers are continuing to purchase properties on the high-end and low-end, there is very little activity in the median price range from $1 million to $1.4 million. So, it looks like sellers of properties in the moderate price range can count on enjoying their homes and condos for the next year or two since there is an apparent lack of demand by nervous buyers who are shopping (but not buying) around that price point. Does this mean we will see a wholesale decline for moderately priced properties in Incline Village due to the slackening of demand? If this were a typical residential community I would say yes. However, Incline Village is a high-end resort market and very few people who own property here actually work here to make a living and pay their mortgage. As a result, property owners here have a lot more staying power than just about anywhere else in the country. We will see the occasional seller who will be discounting their property below fair market value because of their personal situation. But this will be the exception rather than the rule. Most sellers will simply wait out the current economic malaise. The net result is that both unrealistic buyers and delusional sellers will be losers in 2008. The winners will be sellers who price their property close to fair market value and then market their place very aggressively. The other group of winners will be the buyers who are realistic and wait patiently for the right property at the right price, and then use decisive action to beat out other buyers and avoid a multiple offer situation. Even though the Incline Village real estate market is relatively slow overall, I have already been involved in three multiple offer situations during the first half of 2008. If you are buying or selling Incline Village real estate during 2008 and 2009, your best asset will be operating with a healthy dose of reality while the others around you are either unrealistic or delusional. I counsel all of my buyers and sellers to look at the actual statistics for sales in our market and price your property or make your offer accordingly. You can have all the dreams you want, but you can only live your dreams if they are based on some element of realism and not just pure flights of fantasy. NEW LISTING - 2BR, 2BA, 1,232 Sq. Ft. - $675,000 WHY FRACTIONAL OWNERSHIPS DON'T SELL If you are the typical Incline Village property owner, which means generally affluent and someone who likes to make their own decisions then why would you want to share a property with a bunch of strangers who would limit your freedom and decision-making ability? It's bad enough having the TRPA meddling in our business as property owners, imagine what it would be like to have a group of strangers voting on every upgrade, remodel, monthly bill and even which types of flowers to plant. I see very few sales of fractional ownerships or TICs because our typical buyer wants to have their own place where they can come and go as they see fit and do whatever decorating or remodeling they want. The reality is that most people who have achieved a certain level of success and independence in life have absolutely no interest in shared ownership of a vacation property. Those agents who want to market fractional ownerships can do so at their own risk. I will be investing my time developing relationships with serious buyers and motivated sellers in an effort to satisfy their goals and continually build my business with the sales of homes and condos, not fractional ownership properties. MOTIVATED SELLER!! ___________________________________________________________________ Copyright 2008 Don Kanare - All rights reserved. Inside Incline is entirely written and published each month by Don Kanare for property owners and others who have an interest in Incline Village and Crystal Bay. If you have any questions or comments, please 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 |