LAKE TAHOE, CA – While the real estate surge in resort markets such as Lake Tahoe amidst COVID-19 has been making headlines, recently compiled third quarter data reveals deeper insights behind the market frenzy.
This week, Sierra Sotheby’s International Realty released comprehensive reports outlining market trends across the Reno-Tahoe region’s different neighborhoods, revealing growth in sales volume topping 175% in some sectors. For many communities, median home prices are up generously in the double digits with gains in property values for some neighborhoods topping more than 43% since 2016.
Fueled by demand for more open space and a better quality of life during pandemic uncertainty, the data indicates growth in both volume and price across all regional markets, however, the numbers range dramatically from one community to the next.
Tahoe’s ski and golf resort neighborhoods showed impressive growth with single family home sales volume up by 44% in South Lake Tahoe, 45% in Squaw Valley and 79% in Northstar, to name a few.
Truckee, which is popular for its amenity-rich neighborhoods such as Old Greenwood, Gray’s Crossing, Martis Camp and Tahoe Donner showed a 47% increase in home sales coupled with a 13% increase in median sale price as compared to this same time last year.
“Our team sold more in a single quarter than we do in a typical year,” said Truckee-based agent Breck Overall. “Every neighborhood and all price points were fast paced this summer, but the hottest segment of the market has been for properties under $1 million.”
According to Overall, there’s a perception that many of these buyers were interested in a primary residence, however, he says the vast majority of the homes were purchased as “temporary residences.”
Brinn Talbot, another Truckee-based agent agrees. “With distance-learning in place and the ability to work remotely, people have been buying second homes to balance life since COVID began.”
“We’re not seeing a trend with these buyers selling their primary residences in the San Francisco Bay Area,” adds Overall.
Already on a steady growth trend for the past few years, Reno and Carson Valley showed a more stable climb with 4% increase in sales volume and 7% growth in sales price as compared to this time last year. Consistent with the upward trends in Northern Nevada, third quarter showed a 139% uptick in homes sold for over $1 million with 56% of those sales being all cash transactions.
That said, Overall shares that he’s seen a recent surge in his Nevada business. “Many buyers are looking to get out of California,” he says. “These buyers have experienced or plan to experience liquidity events and are motivated to move to Nevada for tax purposes.”
Just up the hill from Reno, the Nevada side of Lake Tahoe was booming with a 47% increase in single family home sales for Incline Village / Crystal Bay and a 25% uptick for Lake Tahoe’s East shore including Glenbrook and Zephyr Cove.
“We are seeing buyers come from higher tax states like New York, metro areas like Chicago, and a steady flow from our primary feeder market in California,” adds Lexi Cerretti, an Incline Village-based real estate professional.
With a consistently limited supply and a new heightened demand, the competition for Tahoe lakefront homes proved to be fiercer than ever. Incline Village / Crystal Bay single family lakefront sales jumped by 175% with 11 sales versus 4 by this time last year. And moving into fourth quarter, according to Cerretti, buyers should be prepared to spend anywhere from $15.5 million to $44 million for a lakefront home on Incline’s renowned Lakeshore Boulevard.
“Lakefront buyers are seeking out the few available properties with desirable features such as panoramic lake views, easy access to the shoreline and amenities including sandy beach, pier, and protected coves,” says Cerretti. “With TRPA’s lottery allowing only five new pier permits a year for the entire Lake, piers are a hot commodity.”
East Shore revealed another lakefront bright spot with 117% growth in sales volume and a record $38,000,000 sale for that side of the lake. South Lake Tahoe’s lakefront market was up 133% coupled with a 185% improvement in median sales price ($3,492,500 as compared to $1,227,550 last year). Northshore lakefront sales were up by 120% with a high sale of $9,500,000.
According to Anne Wulff, the Vice President for Sierra Sotheby’s International Realty in Incline Village, cash transactions for the Incline Village market were up 183% in 2020. Similar “cash is king” stories across resort markets suggests that capable buyers are leveraging all cash offers to win competitive situations in a time when mortgage rates are at historical lows.
“Many buyers have simply thrown in the towel and put their house hunting on hold until the market calms down,” says Overall.
Other exhausted buyers are turning their property search outward to more rural areas such as Plumas County and the Sierra Foothills for more space and more buying power. However, Amber Corr, an agent specializing in the Plumas County residential market warns that with an abundance of demand for Eastern Plumas County, inventory is getting tight. “Buyers have been impetuous, wanting quicker closings than lenders and title companies can accommodate and they’re also not reserved about requesting concessions from sellers,” says Corr. “This stresses the process, but in the end, all parties seem to be excited about their decisions and new life chapters.”
Talbot has advice for buyers who are serious about leaping into a fast-paced resort market. “Find an experienced local agent, get pre-qualified with a local lender or work to be a cash buyer if you can and be prepared to move fast when you find the right property or it will go to another buyer.”
To see how the market is performing in your favorite Reno, Tahoe or surrounding area market visit tahoemicroreports.com or click here.