Incline Village Real Estate - MLS Market Analysis Article 2005

To a newcomer, the prices of houses and condos in Incline Village may seem stratospheric, but when put in perspective the prices reflect the current values and realities of the present day marketplace. The median price for a single family residence is now $1,150,000 and the median price for a condo is $460,000.  

We have seen prices jump from 10% to 40% in the past 12 months depending on the location, base price and quality of the property.  The biggest percentage increases have occurred in the low elevation condo complexes for units that were under 700K in 2004.  Since the Spring of a year ago, we have seen a 2 bedroom McCloud condo rocket from $429K to $649K, a 3 bedroom Forest Pines go from under 400K to over 600K, and units in the High Sierra complex jump from the mid 200s to the low 400s.  

Clearly these percentage increases are not sustainable on a year to year basis.  However, with so few properties below Highway 28 and so much demand to be within walking distance to the beach, properties in the lower and moderate price ranges will continue to experience stronger appreciation than high end properties where there are far fewer prospective buyers.

The local market is characterized by affluent buyers who emphasize quality of life over bargain prices. As the baby-boomers continue to age and retire, the laws of supply and demand will continue to fuel higher prices locally. With virtually no raw land left for development and a finite supply of inventory there is no reason to believe that prices here will fall anytime soon. Historically, prices here have risen and leveled off before rising again. There have been brief periods in Incline Village in the 80s, 90s, and 2001- 2002 where prices have retreated a bit only to zoom up past their previous historic highs.

Interest rates do not have a big effect on prospective buyers here since the vast majority of sales are for vacation homes, not primary residences. This type of buyer tends to have more cash and other assets and they are making a discretionary purchase. Only the marginal buyer for the lower end condos may be squeezed slightly. For the average well-heeled buyer up here, changes in interest rates will not have a significant impact on making a purchase.

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