TAHOE LUXURY PROPERTIES REAL ESTATE BLOGReal Estate Blog category.
One of the primary benchmarks real estate analysts use to evaluate a particular market is the median home price. Often the current median home price will be compared to a period in the past – compared against the prior month, quarter, year, etc. This is an extremely valuable tool to determine the health and direction of the market. But beware, the benchmark of median home price is often misunderstood.
First let’s understand what is meant by median. Median is defined as the middle number in a sorted list of numbers. For example, if there were 41 homes to sell, you order the sales according to sales price - least to most. The home that is 21st on the list is the median home price. There are 20 homes to sell at a lower price, and 20 homes to sell at a higher price. If there is an even number of total sales, the middle two numbers are averaged to get the median. Got it? Great.
The median is used in real estate to hedge against wide variations in purchase price that may skew the average (aka ‘mean.’) This is particularly important in Lake Tahoe where during one month we may have one $12M lakefront sale amongst 20 other sales $350K – $1M. The $12M sale would push the average sale to an inflated value, not showing the true market characteristics. The median price is used to show a better middle ground for the overall market.
Now it is true that the median home price in Lake Tahoe, like most areas in the US, has seen a precipitous decline in recent years. But does that mean a homeowner in Tahoe has seen their property depreciate at the same rate as the median home price decline? Does this mean the overall market has depreciated at the same rate as the median home price? No to both questions. The reason is three fold.
First, what has happened in Tahoe has happened in many areas. Because of a weaker economy, an uncertain future, and a difficult lending environment (to name a few of our recent problems,) buyers have gravitated to lower price points. Buyers comfortable in a $1.5M price point, may elect to purchase a property for $800K, even though they can afford something more expensive. $800K is their new comfort zone even though they have the cash on hand, income and creditworthiness to buy at $1.5M. This results in an overall lower median price.
Second, much of the distressed inventory, bank-owned properties, and short sales are to be found in lower price points. Because there is perceived value in these distressed sales, there is a lot of activity in this segment of the market, translating to large sales volume at low price points and an overall lower median price in the market. The low-price distressed sales is also the segment of the market where we are seeing the greatest investor activity, a huge player in today’s market. Investor activity contributes to high-volume, low price point transactions translating to a lower median price overall.
Third, there are micro markets in Lake Tahoe, as with most regions. No surprise, some segments of the Tahoe market have performed better than others. The Martis Camp community is one example of an area of strength in the market. This suggests one can not apply the median home decline across the board.
Because there is a greater volume of sales in lower price points, the median home has declined in our area. While median price is a useful tool to help guide an analysis of the real estate market, it does not directly translate to an overall depreciation of the market to that level.
Bill Dietz | Principal Broker | Tahoe Luxury Properties, Inc
Please feel free to comment below, or email me directly at email@example.comReal Estate Blog category.
Click Here to View Video Check out the new video of this Crystal Bay Lakefront. Some very cool aerial footage.Real Estate Blog category.
Bill Dietz listed and sold this house in Squaw. Closed today for $2.8M
Located in one of the most wind-protected coves of the North Shore, Sweetwater Lakefront is a south-facing 0.64 acre parcel with 100 feet of lake frontage and tons of sunshine. Large level property with a private pier, three permitted buoys, and an updated single level home with panoramic lake views. It is a complete package as-is or could be a perfect re-development candidate with over 7,500 square feet of TRPA verified coverage. Sweetwater Lakefront is a superb value. Link – http://www.tluxrealestate.com/846/sweetwater-lakefront/Real Estate Blog category.
Started on the market at $2.65M, then to $2.5M, then to $1.999M, then to $1.325M, Now $1.05M. Built in 2000. Super deal. Link to listing - http://tsierra.paragonrels.com/publink/default.aspx?GUID=1143c491-0379-436b-a0d2-dffbcfda89b4&Report=YesReal Estate Blog category.
A few words to bring you up to speed on the recent pace of the Incline lakefront market.
951 Lakeshore just closed on 10/31 for $8.4M. This is a 0.6 acre level property with 100 feet of sandy lake frontage and a private pier with boat house. A bit of a location negative as it is contiguous to Incline/Ski Beach – so it is busy next door. The house was nothing special – a single story, 80’s era 4252 sq ft ranch style house. Started on market in June 2010 for $11.9M. Reduced down to $9.25 before going into contract. Here is the link to that property – http://inc.mlxchange.com/DotNet/Pub/EmailView.aspx?r=474039664&s=INC&t=INC
The only other lakefront to sell in this calendar year was the property at 935 Lakeshore. It closed for $9.05M in January. 0.514 acre parcel with partially remodeled 11,551 sq ft house. Sandy beach, no pier. Link – http://inc.mlxchange.com/DotNet/Pub/EmailView.aspx?r=206393465&s=INC&t=INC
In comparison, there were 7 public sales on the lake in Incline and Crystal Bay in 2010. Link to the seven 2010 lakefront sales – http://inc.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1908604846&s=INC&t=INC
Here is link to the active inventory of 23 Incline and Crystal Bay single family Lakefronts – http://inc.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1935493135&s=INC&t=INC
There are no lakefronts in Incline or Crystal Bay currently in escrow. Based on weak sales to date in 2011, and a fast approaching winter, the remaining lakefront inventory will need to be significantly negotiable on the price to push a sale through. This is a great time to make a run at a lakefront. The market and the season are strongly in the Buyer’s favor. Buyers have a tremendous amount of bargaining power at this moment.Real Estate Blog category.
Despite slow sales volume at the high end in lake Tahoe this year, a property at 951 Lakeshore just closed on Monday for $8.4M. This is a 0.6 acre level property with 100 feet of sandy lake frontage and a private pier with boat house. A bit of a location negative as it is contiguous to Incline/Ski Beach – so it is busy next door. The house was nothing special – a single story, 80’s era 4252 sq ft ranch style house. Started on market in June 2010 for $11.9M. Reduced down to $9.25 before going into contract. Here is the link to that property – http://inc.mlxchange.com/DotNet/Pub/EmailView.aspx?r=474039664&s=INC&t=INCReal Estate Blog category.
Barclays weighs in on housing market – Not as bad as some think…
It is unlikely home prices will drop as much as 17%, but analysts with Barclays Capital evaluated that possibility during a recent analysis of future home prices.
However, the firm noted such a decline is unlikely because the shadow inventory of 4 million to 7 million homes is still not as severe as some expect. The analysts generally use a 7% drop in prices nationwide as the base for their test scenario. BarCap said the market absorbs about 1.5 million homes through distressed liquidations annually.
“Given that most borrowers evicted in a foreclosure process have to go and live somewhere, it makes more sense to look at total excess supply of homes including owner and rental units,” the analysts wrote in a recent report. “Our estimate is that versus the historical norms, there are only a couple of million homes in excess housing inventory that need to be absorbed. Do not get us wrong — we are not presenting a bullish case for housing — all we are saying is that things are bad but not as bad as some might try to make us believe.”
Barclays bolstered its belief that home prices will not experience an extreme decline by saying “contrary to what many believe, the administration can and likely will do things to control a significant downward spiral in housing in the near term.”
If that does occur, Barclays said the move will lead to slower home price growth, while preventing another dip over the next two years.
Write to Kerri Panchuk.
There are currently 55 active single family lakefront listings (North and West Shores, CA.) 43 of the 55 lakefronts have seen at least one reduction since first being listed.
Average reduction from the opening listing price is 23%.
Top 10 biggest lakefront reductions (of active listings) since opening list price. Original price shown in links below may not reflect true original listing price if the property has gone through more than one listing term.
1) 50%. $2.65M to $1.325M. 4990 North Lake Blvd
2) 48%. $8.995M to $4.65M. 9105 Hwy 89
3) 45%. $2.9M to $1.6M. 8335 Meeks Bay Ave
4) 41%. $6.75M to $3.995M. 9770 Brockway Springs Rd
5) 34%. $32M to $21M. 2500 West Lake Blvd
6) 30.5%. $2.295m to $1.595M. 8551 Meeks Bay Ave
7) 30%. $14.95M to $10.4875M. 5344 North Lake Blvd
8) 29%. $4.5M to $2.999M. 8770 Brockway Vista Ave
9) 26%. $6.5M to $4.8M. 9420 Brockway Springs Rd
10) 26%. $3.5M to $2.585M. 3920 North Lake Blvd
This is the traditionally the time of year when the best lakefront deals surface. Sellers are getting antsy about carrying their property for another winter. The pendulum has swung strongly in favor of buyers, and there are some great opportunities out there today.
Bill Dietz’s current top lakefront values –
1) 5344 North Lake Blvd. Bruce Olson built 7500 sq ft home (finished in 2000) in desirable Carnelian Bay. South facing exposure, private pier, level lakeside lawn. Reduced $4,463,500 since opening list price.
2) 5850 North Lake. Link to 5850 N Lake Great lot, great location. 0.64 acre level parcel with private pier, 3 buoys, and 100 feet of lake frontage. Nice, modest, remodeled house. 7,503 square feet of verified land coverage available for future development. Recently reduced from $4.9M to $3.9M.
3) 4990 N Lake. $1.325M for a lakefront in Carnelian Bay that was built in 2000. Need I say more? Currently the lowest priced lakefront listing.
4) 3920 North Lake Blvd. Looking for a pier, but don’t want to spend more than $3M. Look no further than 3920 N Lake.
Please don’t hesitate to contact me if you have any questions or interest.
Thanks.Real Estate Blog category.
Tough to get any closer to the Lake than this! Star Harbor Lakefront is a beautifully remodeled lakefront condominium with panoramic south-facing lake views. Small, intimate complex has pier, tennis courts, pool, and a boat slip for this unit. Cruise bike path into Tahoe City – just a mile or so away. Great rental history – a great way to defray the costs of ownership. For full listing details click here.
Contact Bill Dietz at 1(530)584.3444 or email firstname.lastname@example.org
Hello Tahoe Luxury faithful!
This is new my new blog called Fricke’s Favorites. This blog will follow my wishful thinking where Tahoe properties are concerned. I’ll highlight my favorite properties as they come on the market so you can check them out or forward them on to your friends/family for consideration.
Here is my favorite offering in Tahoe City that just came on!
Do you know someone who this would be perfect for? Someone who will invite you to visit them here? Let me know!
Real Estate Agent
Tahoe Luxury Properties
(530) 584-3440 Direct
(530) 584-3445 Fax
Ca. Lic# 01442740
The full service real estate company specializing in real estate and premier vacation rentals in North Lake Tahoe, Truckee, and Incline Village, Nevada
P Please consider the environment before printing this email
This breathtaking lakefront estate located on the North Shore of Lake Tahoe is offered at the reduced price of $10,487,500. The extensive landscaping includes an entry courtyard, waterfall, pond, lush lawn, flowers and native vegetation. The garden was recognized as one of the top picks in the 2008 Lake of the Sky Garden Tour. The main residence is approx. 5,920 sq.ft. with four large suites, billiard room, gourmet kitchen, and great room. The guest house has two living spaces, an upper level and a garden level. The upper level is approx. 1,024 sq.ft. while the garden level is approx. 900 sq.ft. each contain one bedroom. The lakeside of the property is also landscaped with a large, level lawn perfect for an afternoon game of croquet or endless cartwheels. Watch the sun rise and set throughout the year and a full moon is quite a treat from the private pier. Please call today for a private showing and more details. True Luxury Awaits!Real Estate Blog category.
Tahoe picked by Barron’s as one of the top ten areas to buy as second home!
High end home sales rise in across country and in Tahoe. Across the country, there were 20% more homes sales with closing prices of $1M or more in 2010 than in 2009.
In Tahoe, the Tahoe/Truckee Multiple Listing Service (MLS) reports 17% more home sales above $1M in 2010 than in 2009. More astounding, sales volume of homes in Tahoe/Truckee above $2M jumped 33% in 2010.
The lakefront market, a micro segment of Tahoe’s multimillion dollar market, outpaced all the trends realizing a 100% increase in sales volume in 2010 over the year prior.
Related article linked above.Real Estate Blog category.
December 9, 2010
After a stagnant 2009, the upper-end real estate market in Tahoe surprised many by showing significant signs of life. Despite persistently poor economic news in 2010, upper crust sales skyrocketed.
In the North Shore region (CA & NV,) there were only three public sales above $5,000,000 in 2009. In 2010, 15 closings posted north of $5M. Four of the 15 sales closed above $10M. Cash is king at the high end, with 12 of the 15 sales above $5M in 2010 closed without any financing.
I attribute the strong sales volume at the high end to a number of different factors. First of all, let’s not kid each other about how bad 2009 was. People were more concerned about the world ending than dropping 8 figures on a vacation home. In 2010, confidence returned (as tenuous as it may be,) the stock market rebounded (as shaky as the ride has been,) and many corporations posted strong earnings (despite them not hiring anyone.)
Another reason why the upper end market rebounded in 2010 was the attraction of high inventory and good values. Because sales were near non-existent in 2009, and many Tahoe property owners needed to sell, inventory ballooned and prices fell. The selection of high-end property on the market was something that had not been seen in years, if not decades. The opportunity for Buyers to have a number of class A properties from which to chose, and the chance to negotiate heavily against them brought many buyers off the sidelines.
Tahoe Luxury Properties fortunately participated in the high-end activity of 2010. We had our best real estate sales year ever, closing more than $75,000,000 in transactions. We are blessed by our success and look to the future as bright.
For those of you who have considered purchasing a home in the Lake Tahoe area, there are many signs that say this remains a favorable time. In addition to the large selection and negotiable sellers, winter is traditionally the time to secure the best deals on Tahoe properties. Because the majority of Tahoe properties sell in the summer, sellers become anxious this time of year if their property has not sold. And because their best shot to sell may not come around again until summer 2011, many sellers will offer larger concessions off the asking prices in order to secure a sale.
-Bill Dietz, Principal Broker
Interesting piece this week in the Wall Street Journal. Confirming that vacation homes saw considerable upticks in sales in 2010. Tahoe is on a similar trend with a 100% increase in the number of Lakefront sales in 2010 over 2009 (North and West Shores of the California side, according to MLS data.) WSJ article –
I just had the pleasure of hearing Lawrence Yun, chief economist for the National Association of Realtors; speak at the annual NAR conference in San Diego this past weekend. Dr. Yun predicted that home sales will rise 15% in 2010, over 2009. It is his strong belief that the home values have over corrected and are due to stabilize. View the economic forecast here : http://www.realtor.org/wps/wcm/connect/a2be7d004042e52b8925fd205f470b6e/outlook1109.pdf?MOD=AJPERES&CACHEID=a2be7d004042e52b8925fd205f470b6e
While Dr. Yun’s opinions can be viewed as skewed toward the support of the organization he represents, he did come armed with strong data to substantiate his claim. Yun suggests there is significant pent-up demand, with 16 million renters with qualifying income to purchase the median home, compared to just 11 million in the year 2000. Expansion of the first time homebuyer tax credit is also a factor that will contribute to increasing homes sales, Yun says. Pending home sales have also increased for eight straight months, and stock market wealth is on the rise.
-Bill Dietz, Principal BrokerReal Estate Blog category.
You must have been living at the bottom of Lake Tahoe for the past three years to not know the real estate market has claimed its victims. The Lake Tahoe market, while receiving a more delicate spanking than other areas of California, has suffered its share of hardship. The median sales price of condos and single family homes in the North Tahoe and Truckee areas fell a bit over 30% from the high in 2006.
For the first quarter of 2010, bellows of activity stoked the fire in the local market. Sales volume of condos and single family homes shot up over 40% from the same quarter last year. That’s the good news. The bad news is that the median price fell 16% during the same period from $527,000 to $428,750. This suggests buyers clearly sense value and are jumping into the market, but are electing to jump with only one foot – and the foot has a cast on it. Buyers gobbled up bank-owned properties and other distress sales. As those tend to represent the lower-end of the market, this partly explains the high volume, yet low median price.
The high-end single family home market (>$2MM) slowed considerably in the past two years. In the first quarter, the market only produced three public sales north of $2MM. During the same quarter, there were four $2MM+ sales in 2009, 11 in 2008, 7 in 2007, and 8 in 2006.
Many sellers of higher-end properties responded by dramatically reducing their asking prices to demonstrate opportunity to the value-sensitive buyer and to react to the weak sales volume. Spawned be lower asking prices, interested buyers of higher-end properties are intensifying their searches. The challenge remains the disconnect between buyers and sellers perception of the market. A friend told me yesterday, “Sellers think it is 2006, and Buyers think it is 1929.” Perfectly put.
There are great values in all price points in the Lake Tahoe market. If you are interested in looking at property during your stay with us, we have a skilled, experienced team of agents who have expertise in all segments of the market.
-Bill Dietz, Principal Broker.
I ran across a piece in the Wall Street Journal about the luxury home market. Interesting to read how the high-end market in many parts of the country has been more vulnerable than lower price points. If you have kept up with some other postings of mine, you will know that Lake Tahoe’s high-end market has also displayed greater weakness. This, of course, translates to significant value opportunities for those in search of a luxury property in Lake Tahoe. This article is courtesy of the Wall Street Journal – http://online.wsj.com/article/SB10001424052970204488304574429311693264646.html
-Bill Dietz, Principal Broker
As suspected, the lakefront market did not demonstrate much health this season. Inventory climbed through much of the spring and early summer and then remained fairly stable throughout the balance of the summer months at about 60 single-family lakefront homes from Rubicon on the West Shore of California, to Brockway on the North Shore. 60 remain active on the market today – equating to roughly 65 months of supply. Asking prices of current inventory range from $1.395mm to $19.95mm. Click here to view active lakefront inventory.
Six lakefronts in the same area have publically closed this calendar year so far. Please click here to view a list of sold properties. High sale to date was ~$6.3mm.
Three are currently under contract. No pending sales have asking prices above $5mm. View pending sales here.
With the highest YTD sale at $6.3 and all pending sales below $5mm, there is not much demand for higher price-point lakefronts. Lakefront buyers are gravitating to mid and lower price range properties as their comfort zone. As we trail out of the traditional lakefront selling season, there are some tremendous values for those seeking a lakefront property in Lake Tahoe.
-Bill Dietz, Principal Broker
Our traditional lakefront sales season is summer. As summer wanes, sellers typically become more flexible with prices as they are faced with the prospect of carrying the home until the following summer. The expectation is that economy and real estate market will improve for the next lakefront selling season in summer 2010. Therefore, the timing to hit the bottom may be upon us. I expect the best opportunity to secure a great deal on a lakefront property will be this fall.
I think some good lakefront opportunities remain. The selection of top-tier lakefront properties remains strong buyer demand is weak.
My gut still says that next year is going to be a better market for sellers and thus some of your negotiating power may be weakened. For sure, there will still be an excess of inventory next summer – but sellers may be in an emboldened position if their financial status has stabilized.
-Bill Dietz, Principal Broker