Now that the stay-at-home orders have started to lift in both California and Nevada, how is that affecting the Lake Tahoe real estate market? The short answer is things are looking good! For the long answer lets dig into the details.
LITTLE BIT OF HISTORY
As mentioned in previous posts, when the stay-at-home orders were put in place in California and around the country, the real estate market went into a stand still. Strict travel restrictions were put in place in most areas around the Lake. Almost no buyers came into Lake Tahoe to visit or to look at properties. We also saw a lot of sellers take their listings off the market in late March and through April.
Basically, the real estate market paused for a few months. Few properties sold, but prices stayed flat. Everyone just sat and waited to see what would happen when things started to open back up.
THE SLOW RE-OPENING
By the time Memorial Day came, we had gone into Phase 1 of re-opening. While restrictions were still in place for travel to Tahoe from other areas, there was a slow trickle of more visitors to the area. But with lodging properties all closed they were limited to only day trips. A $1,000 fine was also in place in El Dorado County on the South Shore for any non-essential travel into the Tahoe area.
As we moved into early June we entered Phase 2. The casinos at Stateline reopened on June 4th and lodging opened up on the California side the next week. The $1,000 fine for non-essential travel was also lifted by El Dorado County and visitors were welcomed back.
MARKET PICKED UP
As we predicted, as soon as visitors started coming back into Tahoe the market began to pick up. What we didn’t completely predict was how quickly it would pick up.
Let’s take a look at the largest marketplace in the Tahoe area, South Lake Tahoe.
In Tahoe we always see a drop in active listings over the winter through around April. But this year, due to obvious reasons, we didn’t see an increase of listings in spring like we normally would. There were 171 active listings in February, 174 in March, and 171 in April. May finally brought a small increase in listings up to 193.
Compared this to last year when there were 191 listings in March, 217 in April, and 277 in May.
Pending sales went from 21 for the month of April, to 78 for the month of March. Then in June the rush came, with 165 pending sales (as of 6/25). With only 385 listings, that means 1/2 of the listings went into escrow in 1 month.
With the increase of pending sales it was only a matter of time before we saw closed sales increase. That finally happened in June when we have had 50 closed sales as of the 25th of the month.
That may not seem like much, but when you compare it to the 33 closed sales in April and only 24 in May it is a substantial increase. Last year we had 45 closed sales in April and 56 in May.
AVERAGE SALES PRICE
During March and April most of the sales were in the lower price range, with an average sales price of $490,000. In the field we noticed most of the buyers were calling about lower price range homes, mostly looking to pick them up at a good price.
But in May that changed as we saw more buyers looking for larger and more expensive homes. The average sales price in May was $597,500. So far in June we have had an average sales price of $585,000.
Calls have continued to come in from buyers of all price ranges. But we do continue to see more activity at the higher ranges above $500,000. Part of the reason for this is due to the lack of inventory at the lower price range.
Here is a breakdown of the current inventory of single family, condos and townhomes in South Lake Tahoe as of the date of this post:
20 – under $400,000
52 – $400,000 to $600,000
36 – $600,000 to $800,000
*To see all current listings click on the price range listed above.
WHAT DOES IT ALL MEAN
So what does all of this data mean for buyers and sellers in Lake Tahoe?
Right now buyers will find low inventory and be prepared to compete against others looking at the same homes. Many properties are selling quickly, some even with multiple offers.
With the market heating up and properties selling quickly, most sellers won’t even entertain low offers at this time. So if you are looking to get a “deal” and offer far below asking price you should be prepared for a negative response from the seller.
This doesn’t mean you can’t get a “deal”. Some sellers who had been trying to get their properties sold before the March shutdown are now willing to take a discounted price compared to what they would have taken months ago. But those are the exception and don’t make up the majority of the marketplace.
As always, come prepared with a pre-approval letter from a lender. We can help recommend some local Tahoe lenders if you don’t have one you are already working with.
You can probably guess what I’m going to say for sellers. Yes, it is a sellers market right now. Few listings and lots of buyers, perfect conditions to sell a home in Tahoe.
But we’ve already seen some sellers get greedy, and list their homes way to high. Again, prices haven’t gone up yet. And since most buyers need an appraisal done to give their lender a market value of the home, you have to be able to show comparable sales that back up whatever sales price you agree to. Plus those overpriced homes aren’t selling. They may get offers, but they will be low and well below asking price. Or it’s possible it just wont be attractive to buyers and the property won’t even be shown, so it will sit on the market while other homes sell.
Homes that are priced right are going quickly right now, sometimes with multiple offers. The main draw for most buyers seems to be homes that are remodeled, or at least are clean and well maintained. Many buyers are looking for a quiet clean yard and lots of natural light inside.
Basically… if you are going to list your home for sale you should put it at the current market value (backed up by comparable sales) or just a tiny bit above that figure. This will give you the best chance for a quick sale at a fair price. Our team can give you a free market evaluation of your home and let you know what price range you should list at to be able to sell quickly for the most amount of money.
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