Million-dollar homes in the U.S. are selling at double their historical average while middle-class property demand stumbles, showing that the housing recovery is mirroring America’s wealth divide according to a recent report by Bloomberg.
In South Lake Tahoe, we are seeing strong sales of homes in the luxury category but not quite at the same national average rate. There are several reasons why the local figures don’t match up with the national averages. About 85% of the home owners in Lake Tahoe use their property primarily as a second or third vacation home location and their budget may not be as high as their main residence luxury home purchase was. Also, some locations in the country have huge volumes of luxury homes for sale as compared to a relatively small area that Lake Tahoe covers.
Million Dollar Home Sales in Lake Tahoe
Nation wide, purchases costing $1 million or more are rising close to 10% from the previous year. On the Nevada side of South Lake Tahoe there have been 46 homes sold over the last 12 months. During the previous year, there were 53 so we actually saw a slight drop. But, when you look at home sales from July 1, 2011 to June 30, 2012, you’ll see that million dollar home sales took a huge leap as there were just 16 sales during that year, about a 300% gain!
15 Lakefront homes have sold on the Nevada side during the past year and I’m getting more and more phone calls from buyers interested in a lakefront home.
On the California side of South Lake Tahoe, 19 homes sold for $1,000,000 and over this past year and 16 the prior year. This was a big jump from 2011/12 sales just as Nevada saw.
According to Bloomberg, luxury-home sales are climbing as an improving economy and stocks that have almost tripled from 2009 lows bolster confidence among affluent buyers. At the same time, slow wage growth, tight credit standards and escalating prices are putting homeownership out of reach for many Americans. While investors drain the market of lower-end properties, builders are constructing more expensive houses that generate bigger profits.
South Lake Tahoe Home Sales
South Lake Tahoe’s largest number of home sales comes in the under $300,000 price range, though with dwindling inventory in this range that number is falling. Closed sales in this range have fallen from a 2012 high of 477 to this past year’s total of 298. Inventory in this range has remained stagnant over the last 2 years with 117 homes for sale, but that number fell considerably from a high of 250 in 2011.
The area has seen an increase of homes for sale in all other price ranges, and increase anywhere from 14.6% to 18%, depending on the range. Overall, South Lake Tahoe has an increase in inventory of 10%.
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