We normally do quarterly market updates, but the uncertainties created by the corona virus situation dictated that we wait and reflect a bit. So, here we are one-third of the way through 2020 and it looks very different than any other year since the local real estate market rebounded in January 2012.
The chart below shows the year to date sales from January 1 through April 30 for each year going back to 2015. While the sales totals this year look very similar to 2015 there are a couple of enormous differences.
INCLINE VILLAGE / CRYSTAL BAY : SALES JANUARY 1 to APRIL 30
Year Houses Condos PUDs Total
2020 32 41 11 84
2019 34 45 17 96
2018 53 54 16 123
2017 37 49 9 95
2016 43 45 12 90
2015 29 47 12 88
The inventory level at the beginning of May 2015 was dramatically different with 236 houses, condos and freestanding condos listed for sale compared to only 131 properties at this time. Also, the asking and selling prices for similar properties were far lower than they are today.
The economy was moving forward with a full head of steam and the 2016 presidential election was still 18 months away. Prices and unit sales had been trending upward for the past three years. The inventory was healthy enough to support an increasing level of sales and buyer confidence was high. In other words, in 2015 there was very little uncertainty to derail the uptrend in the Lake Tahoe real estate market.
Contrast that with the current market situation. We can see from the chart that total unit sales of houses, condos and freestanding condos peaked in 2018 and have declined ever since. During the past two years prices have continued to trend upward, albeit at a slower pace than in the earlier part of the decade. The natural downturn in total unit sales combined with an historically low inventory and record high prices indicated that the current real estate cycle was already maturing. Adding the Covid-19 variable to the mix is likely to have a damper on overall sales and price increases in the foreseeable future.
Even if demand remains relatively strong the modest inventory will keep a lid on total unit sales. This is because almost all of the homes in our market are custom designed and buyers are willing to wait to find just the right place to meet their needs. Also, the vast majority of purchases at Lake Tahoe are discretionary. This tends to minimize a sense of urgency for most buyers and can lead to a slower rate of sales.
With social distancing likely to remain a part of our lives at least through the summer of 2020 life at Lake Tahoe is not going to resemble what we used to consider normal. But, the natural scenic beauty, recreational opportunities, low crime rate, clean air and abundant sunshine will still continue to attract buyers to this special part of the world. We might even see an uptick in purchases by people who can work from home. Given the choice between sitting at a desk and enjoying a nice lake or mountain view versus an office in a big city, living and working at Lake Tahoe seems like the better way to go.
Weekly Real Estate Update
Statistics gathered from the Incline Village MLS on May 3, 2020
Houses Condos PUDs
For Sale 71 47 15
Under $1 million 13 30 6
Median Price For Sale $2,600,000 $745,000 $1,146,200
YTD Sales 2020 32 41 12
YTD Sales 2019 36 47 17
New Listings 7
In Escrow 6
Closed Escrow 3
Range in Escrow $570,000 - $3,595,000
The statistics contained herein are based on information from the Incline Village Board of REALTORS® or its Multiple Listing Service as of May 3, 2020
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