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Incline Village Real Estate - MLS Market Analysis Article April 2009

OVERVIEW:

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 $495,000.  

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.

See the Condo Analysis From 2005

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