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This Months Articles: Click Here to See All of My Listings and Virtual Tours Just Listed - Not on the MLS! For Daily Updates on Incline Village Real Estate visit my web site at: www.InsideIncline.com Incline Village Real Estate 2009 Year in Review Whether you were buying, selling or sitting on the sidelines in 2009, the Incline Village real estate market moved in many different directions and provided the most interesting year of the decade for pundits and prognosticators. The stock market crash during the late winter brought sales of homes and condos in Incline Village to a crawl. But as the stock market recovered and the price of gold and silver soared, our local sales activity increased dramatically and total closed escrows in 2009 are slightly ahead of 2008 as we go to press. Unit sales of single-family homes actually increased by 9%, while sales of condos and freestanding condos are virtually identical to last year. Not a single multifamily or investment residential property changed hands in Incline Village or Crystal Bay in 2009. With the market experiencing an excess of residential rental inventory, investors have a hard time making the cash flow numbers work. In the past, you could always count on getting steady appreciation to offset the lack of positive cash flow, but that apparently is no longer the case. So, the handful of two, three and four unit properties that have come up for sale in the past year continue to wait for a purchaser to step forward. Demonstrating strength and confidence in the long-term intrinsic value of land on the north shore of Lake Tahoe was the sale on Pinecone Circle for an undeveloped parcel at $8,985,000. The highest priced piece of raw land to sell in 2008 went for only $2.1 million. There are very few undeveloped lakefront properties still remaining on the North Shore on the Nevada side of Lake Tahoe. And unless a seller is being squeezed financially, they can generally wait until they get the price they are seeking. One of the great anomalies of 2009 is that we saw condos within two blocks of each other have dramatic price swings. The sale prices of two bedroom, two bath condos in McCloud have slipped about 25% from their peak, while around the corner on Southwood Boulevard some properties are off 40%, even 50% from their all-time highs. While the median price of houses is $1,000,00 and down 20% from the all-time high set in 2007, it is still 15.6% above the median price of $865,000 in 2004. Contrast that with the median price for condos which has slipped all the way back to the 2003 level. In 2008 the median price for a condo in Incline Village was $520,000, in 2009 that number has tumbled all the way to $400,000. The primary lesson that buyers can take from this math exercise is that houses in Incline Village are tending to hold their value on average much better than condos. The only sector of the condo market continuing to show good relative strength would be lakefront condos. This is due to the finite supply and ever increasing long-term demand for these unique luxury properties. There are condos in lakefront communities and then there are those rare properties that actually sit directly by the beach with no one in front of them. While you can still find a fixer upper 2BR condo in a lakefront community for around $900,000, it's difficult to find a true lake front condo for under $1.2 million, with most priced as $1.8 million and higher. All over America the real estate news is dominated by talk of foreclosures and short sales. In some parts of the Central California Valley that became drastically overheated during the real estate boom, distressed sales make up 80% or more of all transactions. In contrast, only 26 of the 164 properties that have closed escrow in Incline Village in 2009 were bank owned or short sales. That is a mere 16%, which although it is out of character historically for our local real estate market, Incline Village is not experiencing any where near the percentage of troubled properties that you will find in other parts of the country. Another way to analyze the trend of real estate sales is to look at the median square footage of houses closing escrow. If buyers are concerned about downsizing to reduce ongoing maintenance and utilities costs, we would expect to see a decrease in the median square footage of properties that are selling. In fact, just the opposite has happened. The median square footage of properties closing escrow in 2009 is 2918 ft.². It was 2606 ft.² in 2008 and 2795 ft.² in 2007. This tells us that buyers are still shopping in the historical sweet spot which is the 2000 to 4000 sq. ft. size range. And carrying the math one step further we see that dividing the 2007 median sale price of $1.2 million by the median square footage of 2795 ft.² we get a price per square foot of $429. Extrapolating out the same numbers for 2009 we get a price of $342.70 per sq. ft. This confirms that the median sale price of properties in Incline Village and Crystal Bay has declined approximately 20% from the peak in 2007. Depending on where a property is located, whether or not it has a lake or mountain view, is next door to Forest Service land, adjacent to a creek or a lakefront parcel, the median price numbers can go right out the window. One of the great things about the Incline Village real estate market when it comes to single-family homes is that you can't make blanket statements because every property has some unique attributes. Even two places sitting side-by-side can be completely different and have wildly varying fair market values. So, while properties within particular condo complexes may tend to move somewhat in lockstep, the same cannot be said for single-family homes in Incline Village and Crystal Bay. Another big factor to consider when analyzing whether prices are trending up or down is the direction of the inventory. If lots of distressed homes were coming on the market the inventory of houses for sale would be going up, but just the opposite is occurring. In early December there were 192 single-family homes for sale, which is down from 243 at this time in 2008 and even below the 198 homes for sale during the first week of December 2007. At the current rate of sales the inventory of single-family homes is approximately 25 months, figured on an annualized basis. In contrast, the inventory of condos and freestanding condos is almost identical to the number of properties we had on the market in 2008. And that inventory is closer to 30 months. Prices are holding up better among single-family homes than any other type of properties in Incline Village and Crystal Bay and it looks like that trend will continue into 2010. Buyers of condos and freestanding condos may need to hold these types of properties a bit longer than single family homes to realize the same future upside potential. BEAUTIFULLY REMODELED - 66 MCCLOUD - JUST REDUCED ! WHY 2010 IS A GREAT YEAR TO REMODEL YOUR PROPERTY If you have been contemplating doing some remodeling or updating at your property, then 2010 might present the best opportunity in many years to get the work done. On the North Shore of Lake Tahoe we have the perfect storm of low materials prices, low interest rates, and plenty of contractors looking for work. During the real estate boom it seemed like all the good contractors were booked months in advance and they could charge top dollar for even the simplest project. With the implosion of the real estate market nationwide and the onset of the greatest economic decline since the Great Depression, contractors, subcontractors and service providers of all types are scrambling for work. As real estate activity and the economy soared through 2007, some of the top contractors would only due major remodeling projects or new construction. With the dramatic slowdown in pending business, some firms that would have turned down smaller jobs in the past are now happy to fix up a bathroom or put in those new closet doors you have wanted for years. Subcontractors can no longer demand an eight hour minimum at $50 per hour just for showing up on the job site. Most are happy to have any amount of work coming their way and you can often negotiate rates for labor. Depending on the types of materials that you are looking for, you might be able to find a building supply company going out of business or a contractor with a development going upside down. If they have the materials that fit your needs, in some cases you can purchase them for pennies on the dollar. Many homeowners have been successful scouring Craigslist and other online resources for building materials that are free or very inexpensive. Even the cost of slab granite has come down dramatically in the past few years as this material has become a commodity found in mainstream properties, not just a luxury item in high-end homes. Retailers who specialize in selling building materials and interior decorating supplies along with big-box stores such as Home Depot or Lowe's have been running great sales on all types of materials and fixtures. Some of these firms are still holding on to inventory purchased during the peak years and have had difficulty reducing stock levels. While they continue to go through this thinning process, you can benefit from the price reductions on closeouts and overstocks. While you are hunting around for things such as new carpet and flooring, gas fireplaces and wood stoves, and other types of items for your home or condo, don't forget about the local vendors here in Incline. They know that they have to compete with the retailers down in Reno and Carson City. So, the local merchants tend to provide a higher level of service and are generally pretty competitive on price. When you factor in the time savings and attention to detail and quality, it's quite worthwhile to visit the stores in Incline Village before making a trip down the mountain. It is almost always better to pay cash than to finance a remodeling project. But in the event you are looking at doing some major work and wish to finance the venture, this is a wonderful time. Interest rates are at or near historic lows, so refinancing a property and using the cash to make improvements can be a viable option. Start by prioritizing which projects will give you the most bang for the buck and provide the most enjoyment for your lifestyle. Make a wish list, then establish a budget for each room or area so you don't go overboard and get carried away with installing gold plated faucets in the guest bath that will be used only twice a year. For larger projects you will likely want to meet with an architect and a licensed contractor to get a handle on the design and construction costs in advance of making any big financial commitments. Even seemingly small projects such as a bathroom remodel can have significant hidden costs if things don't go exactly as planned. When you rip out the old linoleum and find that the floorboards are rotting away, suddenly that quick bathroom updating has taken over your life (and exceeded your budget). After determining which parts of your property you want to remodel, it's a good idea before starting any work to take some extra time and see if new thoughts come into your head. Very often, you will make changes to the original game plan. And it's much better to do these changes on paper then tear out a new wall your contractor spent the last two days building. Invite some friends over and share with them your remodeling ideas to see if they notice any major flaws in your planning or strategy. Think about traffic flows, color coordination, the type of feel you are looking to create and how everything will come together. Unless you are planning on staying in your property forever, think about using materials and colors that are neutral, timeless and non-offensive, it will really help with resale. You don't always have to do a big remodeling project at one time. Maybe it makes sense to get that bathroom updated while you are taking short vacation instead of having to coordinate your daily routine with the crew working at your place. Some property owners like to be present and oversee each detail, but the top-notch contractors in Incline Village and Crystal Bay don't need you hovering over them to get the job done properly. If you are doing a major remodel, consider renting a condo while the work is being done. There are so many condos available in Incline Village, you can easily move out for a few months to a year and you won't pay an arm and a leg for rent. While 2010 is a great time to remodel your property, make sure that you interview at least three licensed contractors and spend lots of time planning the details of what you wish to accomplish. Your project will go more smoothly if you take the extra time to rethink each aspect of your remodeling project and double check everything, ideally with another set of eyeballs that will catch any mistakes or undesirable design elements. Low interest rates, low materials costs and the availability of high quality contractors at reasonable rates won't last forever. Make your plans to do those upgrades you've always wanted in 2010 before the most talented contractors and service providers have their calendars filled for the year. VERY MOTIVATED SELLER!! - $50,000 PRICE REDUCTION! Click Here to See All of My Listings and Virtual Tours 2009 Newsletters February April May July October 2008 Newsletters 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 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 RE/MAX Premier Properties - 5250 Neil Road, Suite 100 - Reno, NV 89502 - (775) 828-3380 |