Archive News Letters
2007 Sales Statistics as of 12/31/07 Houses Condos Free Standing Total Units Sold
2007 138 97 45 280
2006 121 118 41 280
For Daily Updates on Incline Village Real Estate visit my web site at: www.InsideIncline.com
INCLINE VILLAGE REAL ESTATE 2007 YEAR IN REVIEW
With 2007 in the history books, it's time to take a look back and analyze the sales statistics for the past year. Our total sales in units were almost identical to 2006, but the increase in single family residence sales and the decline in condo sales raise some interesting questions. What types of properties are buyers looking for and how can sellers market their home or condo to attract buyers?
I'll analyze the statistics in a moment, but first let's ponder our current market. Inventory is high compared with the frenzy of 2004 - 05, demand has cooled in the short term but remains strong for the long term. Even though the Euro is strong vs. the dollar, we have not seen an influx of foreign buyers in Incline Village. Most buyers do not have a sense of urgency and are willing to wait for the right property at the right price. If I can make any generalization it is that our market is price sensitive and aggressively priced properties are getting the lion's share of attention from the serious buyers.
Sellers and their agents will need to be very creative in 2008. I do not see any reason that sales in units should increase significantly. I also do not see any dramatic declines in prices in our market. There will most likely be continued weakness among the low-end condos and high elevation homes, but this is more a function of decreased demand for these types of properties than anything else. There is a flight to quality and to lower elevation homes and condos, while the lake view properties continue to defy gravity and ratchet upward.
Very large homes (i.e. over 5000 sq. ft) still tend to languish as demand for these properties is not nearly as strong as it was in 2005 and prior years. The sweet spot in our market is for homes from 1800 to 3500 sq. ft. priced up to $2.5 million and condos under 1800 sq. ft. and priced under 800K. Condos over $1 million are traditionally slow movers and this is even more so with all the good values in houses in the 800K to 1.2 mil price range. Fixer uppers in the lower to moderate elevations provide some of the best values, with the occasional good deal among the higher elevation lake view fixers.
Analyzing the sales statistics for all of 2007 we can see that while unit sales of condos dropped 18%, the median price for condos held steady at $585,000. Even though there is a lot of condo inventory under 500K, most buyers are looking at the quality condos in the $500K to $800K range. The low end condos generally lack garages, tend to be in high density complexes and usually have little or no view of any kind. Buyers in Incline Village usually want a garage, some kind of view and as few neighbors as possible. With overall demand well below the level of 2005, I don’t see any increase in demand or prices for the lower end condos until at least 2010 at the earliest.
Single family homes continue to show strength, with the big exception being properties above 7000 feet. When demand was strong across the board in 2005, buyers were looking at the high elevation homes as an affordable alternative to other properties in Incline. Now that demand has slipped, I tell my buyer prospects that if they buy at high elevation I will need at least 2 to 3 years to resell the property. I don't want my clients surprised when they go to sell in a few years and are shocked to learn that high elevation homes take a lot longer to sell than properties within 1.5 miles of the beach. The time value of money, need to reposition assets and carrying costs are all important factors when deciding what property to purchase in Incline Village and Crystal Bay.
Total unit sales of homes are up 14% in 2007 vs. 2006 and the median price for all of 2007 has held up strongly at $1,200,000. The median would actually be about $100,000 higher, but we had a flurry of sales among the lower priced fixer uppers in November and December that reduced this figure. For most of 2007 the median home price was around $1,260,000, and the decline at year end is directly attributable to the bargain hunters scooping up the low priced, value properties for sale. The median house (which is 3 or 4BRS, 2+ Baths, and approximately 2,500 sq. ft.) in good condition, in a lower elevation neighborhood will fetch close to the $1.2 million mark. Prices will vary based on location, view, lot size, condition of the interior, etc.
My crystal ball tells me that 2008 will see condo prices generally in a plateau, with a slight bias to the downside for the lower end properties. Home prices will stay flat or rise slightly for most of the lower elevation properties. I see lake view homes and remodeled properties on larger and more private lots commanding a premium and trending up slightly. The majority of buyers want a place with a Tahoe feel, no close neighbors and some kind of a lake or mountain view.
In summary, privacy, quality, view, ease of access and price will continue to be the important parameters for buyers. Sellers can no longer put a high price on a property and expect a lot of interest, just because it has a great location or good view. Buyers have become more savvy and cautious due to the fall out in the national real estate market and are looking for the best values. Buyers are much more patient now than in 2005 and sellers have to accept the lack of a sense of urgency that buyers now have.
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WHY THERE WILL BE A SHAKEOUT IN 2008 OF
INCLINE VILLAGE REAL ESTATE AGENTS
With 288 sales in 2007 (residential + raw land + multi-unit properties) and about 350 agents currently working the Incline Village real estate market you have to wonder how everyone can make a living. The reality is that about 40 agents sold enough property in 2007 to earn enough to stay afloat, the other agents are somehow scraping buy on their investments, dipping into savings or taking a second or even third job to make ends meet.
Many of the agents who had an off year in 2007 also had a rough time in 2006. With no turnaround on the horizon, it looks like some agents will reach the breaking point in 2008 and may have to exit the business.
I am very excited that 2007 was my best year ever and I finished #6 overall in unit sales. I don't wait for the phone to ring. Everyday I'm working on my web site, developing relationships with new buyer and seller prospects and building for the future. Our market can't support 300+ agents, so I intend to keep marketing aggressively and providing superior service while I continue to increase my sales and market share.
New Listing Coming Up in McCloud - I am working on a new listing for a two bedroom, two bath condo in McCloud. I anticipate putting this property on the MLS in early to mid January. If you have any interest in owning a very well maintained McCloud condo just one block from the beach please contact me.
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