It looks like 2007 will be an exciting year for the Incline Village real estate market. Affectionately called “The Riviera of Lake Tahoe,” this welcoming community on the northeast shore stands out when it comes to short-, medium- and long-term real estate investments. Why do prices keep rising here while the rest of America stumbles?
To get a sense of why Incline Village real estate continues to show strong gains while most of the country is licking its wounds, we need to look at current inventory for sale, sales prices, and asking prices for the past three years. and trends. what are happening Keep in mind that there is a finite supply of homes and condominiums with virtually no land to develop and a growing demand from the 40-70 crowd looking for their piece of heaven in Lake Tahoe’s nicest community.
It is important to look at not only the average selling prices, but also the average selling prices over a long period of time so that we can see trends in the direction of the market. So stay with me and follow the dates and numbers.
The median sales price for single-family residences in Incline Village peaked the last week of April 2005 at $2,300,000. This figure decreased to a low of $1,495,000 in the second week of May 2006 and has risen steadily to its current level of $1,895,000 at the end of January 2007. time period.
Here are the median home sales prices for each of the last three years:
2004 -$865,750 2005 – $1,110,000 2006 – $1,150,000
While the median sales price has risen steadily over the past three years, the median sales price rose sharply during the 2005 seller’s market, fell back a bit in the 2006 buyer’s market, and is now starting to rise again. What this tells me is that the mindset of vendors in Incline Village is one of optimism. Most property owners in Incline Village are relatively wealthy and can afford to maintain and enjoy their property through any perceived weakness in the market. While the fact that some buyers are staying on the sidelines is evidenced by the decline in unit sales compared to 2005, prices are holding firm, as evidenced by median sales and sales prices over the past three years.
Most people who buy properties in Incline Village and other upscale resort communities do so because they want to, not because they have to. Most sellers sell because they want to, not because they have to. It creates a market where properties generally sell more slowly, but at a higher percentage of the final sale price than in most other places in the country.
Another key factor is that virtually all homeowners in high-end resorts earn their money elsewhere. Property prices are not related to local income unlike the typical residential real estate market. Property prices for sale in Incline Village reflect what a wealthy person is willing to pay for a particular property.
We should also keep in mind that the level of unit sales in 2005 was an anomaly as it was by far the biggest year in real estate sales history for Incline Village and Crystal Bay. When comparing annual sales totals, it is best to look at the period from 2000 to 2005 and compare the average annual unit sales totals to 2006 to get a more accurate reading. When one looks at the long-term statistical data, we can see that although unit sales in 2006 are about 30% below the average annual totals of the previous five years, the dollar value of properties being sold is still extraordinarily high and this value moves up steadily over the long term.
When the median single-family home sales price was $2,300,000 in April 2005, we only had 107 homes for sale in the entire community. There are currently 157 single-family homes for sale in Incline Village, an increase in inventory of almost 50% compared to April 2005. The fact that we have much more inventory on the market than we did at the same time two years ago and yet However, actual closed sales prices continue to be on a slow upward path, which tells me there will be no significant price declines overall any time soon. Individual properties, depending on the seller’s motivation, may provide special values for a particular buyer. But in my opinion, there is not going to be an overall price decline among single-family homes in our market because there is so much intrinsic value in owning land in Incline Village.
When we take a look at the condo market, the numbers are even more dramatic in favor of the long-term strength of the local market. The average sale price of condominiums during the last three years is as follows:
2004 – $405,000 2005 – $485,000 2006 – $580,000.
Median condo sales price topped a staggering $725,000 during the fourth week of April 2005, when there were only 55 condos for sale in all of Incline Village and Crystal Bay. The median sales price in this category so far bottomed out at $555,000 in the first week of January 2007 and is now up slightly to $559,000. This is to be expected after the overall median condo sales price increased an unsustainable 43% in just two years and inventory jumped from 55 units to our current total of 126 condos currently on the market.
Indeed, it is a testament to the strength of our local market that the median condo price has not decreased when inventory has increased so dramatically over the past two years. What this shows is the intrinsic value of owning property at Incline Village and all the rights and benefits you receive, such as access to private beaches, discounts at the golf course and recreation center, special offers at the ski area and most important of all the phenomenal quality of life that we can enjoy here.
In short, I don’t anticipate that the number of units sold will increase dramatically in 2007 compared to 2006, although it would be a pleasant surprise. My crystal ball tells me that the median home price in 2007 should remain close to or slightly above the median price in 2006.
I believe that the median condo price in Incline Village and Crystal Bay, due to excess inventory relative to 2005 and the median sales price trend, will result in a stronghold for quality properties within walking distance of the lake and a soft spot for smaller properties that are in lower demand locations. There will always be exceptions to this, as individual resorts may have a shortage or oversupply from time to time during the year. It is very difficult to generalize about the condo market in Incline Village as each complex has its own unique attributes. Prospective buyers looking for property in Incline Village, Lake Tahoe, and other mountain resort communities tend to prefer high-quality interiors and locations that make them feel like they’re truly far from civilization and in the mountains.
Copyright 2007 Don Kanare – All Rights Reserved.