TAHOE CITY, CA - 2020 proved to be a wild ride for Lake Tahoe and surrounding area real estate with demand for the mountain lifestyle eclipsing the rising cost to purchase a home in the region’s resort communities.
Record-low mortgage rates and a myriad of pandemic related side effects played into a market frenzy that took everyone by surprise.
“We braced for the worst in March,” said Brit Crezee, director of marketing for Sierra Sotheby’s International Realty. “We had to pivot quickly when the market took off in the other direction.”
A recently compiled year-over-year snapshot shows a 33% increase in home sales on Lake Tahoe’s North Shore, 39% increase on the South Shore and an 8% overall gain in Reno home sales in 2020.
While the Nevada side of the Lake has issued less strict COVID-19 guidelines, California’s shelter-in-place restrictions have not deterred Tahoe dreamers from staking their claim during uncertain times.
The term “panic” may be too strong to explain the bullish reaction, however, there’s no doubt that urgency owed into the explosive market. “With unpredictable access to lodging and short-term rentals, homeownership offers a guaranteed connection to the region for those who aren’t tied to an office or a school desk,” said Crezee.
“Our primary buyers are coming from the San Francisco Bay Area and Southern California in search of space and the ability to walk out their back door to hike, ski and play,” says Truckee-based agent Kaili Sanchez. Nevada, on the other hand, is drawing buyers from California and high-tax states like New York for its tax advantages, says Incline Village agent Lexi Cerretti. “The inflow of high-net-worth buyers is increasing as they realize huge tax savings by relocating.”
As this influx of buyers competes for the region’s historically short supply of homes, prices continue to climb across all sectors.
That said, home sales over $1 million saw huge gains across all markets in 2020. In South Lake Tahoe, homes sold over $1 million jumped 137% from 49 in 2019 to 116 in 2020. North Shore went up by 50% while Reno continued to carve its way into the region’s luxury home space with a 43% increase.
The biggest yearly increases in median home prices took place on Tahoe’s East Shore (29%) South Lake Tahoe (19%) and Truckee (16%). North and West Shore, Incline Village, Reno and surrounding areas all showed double-digit gains.
The uptick is good news for sellers but bad news for prospective homebuyers looking to own their slice of paradise.
“Buyer trends are such that we are not asking ourselves ‘How much is this property worth relative to recent sales?’ but instead, ‘What price would you be disappointed someone else got it for relative to your own comfort and buying power?,’" said North Tahoe-based Realtor Katherina Haug. “2020 has been a totally different ball game, and an agent must be savvy and quick to get their client into a property.”
“There’s an inordinate volume of buyers and agents all actively watching and ready to jump as soon as a new property hits the market,” adds Breck Overall, a Truckee-based real estate agent. “Most properties are getting multiple offers with reasonably priced homes selling for $50-$150,000 over the asking price.”
To illustrate the shortage, Overall says, “Truckee’s Tahoe Donner neighborhood typically has 80-100 homes for sale during a balanced market. However, during the first week in January, only six homes were available for purchase in that area.”
According to Cerretti, it’s equally competitive at the top of the market. “Our Incline Village lakefront inventory on the Nevada side of the Lake has dried up with only one lakefront remaining on the market,” she says. “Offered at nearly $8 million, it will likely be a rebuild.”
Real estate professionals warn buyers against getting caught in the hype to avoid making irrational decisions.
“Be clear on your desires so when the right home comes on the market, you are confident in your decision,” advises Sanchez.
“Work with an agent who has your best interests at heart,” adds Overall. “If your agent tells you that you are overpaying for the property, listen and trust them to find you the right property at the right time with the right terms and price.”
For sellers, it is still recommended to do ample research to achieve maximum value.
“Look at the overall market, the condition of your property, and price appropriately for a hot item that attracts strong and/or multiple offers,” says Haug. “Staging and offering a property as turnkey is still a very relevant tactic for getting top dollar, “she adds.
“For an easier sale, I suggest getting a home inspection and doing repairs in advance,” said Sanchez.
Whether buying or selling, in today’s fast-paced market it is more important than ever to enlist an experienced professional.
“Your agent should be skilled at virtual showings and adept at screening buyers carefully,” says Cerretti. “Hire a local agent that can give your property the widest exposure and truly understands the history and the nuances of your neighborhood.” An inexperienced or out-of-area agent could cost you valuable time, money or perhaps your dream home.
Heading into the new year, “Roll up your sleeves and be ready to act quickly and aggressively,” says Haug.
To see market snapshots broken down by all Reno and Lake Tahoe neighborhoods visit tahoemicroreports.com.