The Lake Tahoe area real estate market looks slightly different than it did at this same time last year.
While the number of single-family units sold has dropped during the first half of 2019 compared to 2018 around much of Lake Tahoe, the median price for a home has actually increased in some areas.
Sheldon Felich, president of the Tahoe Sierra Board of Realtors, said the downturn in sales volume wasn’t what he expected through the first several months of 2019.
“We’re not having the summer that we all had hoped for,” he said. “But, there is still activity. It is just a lot steadier than what we were anticipating. I don’t know what is causing that.”
“What’s happening is even though our percentage of sales is down in terms of volume I’m looking at an increase in the average in median sales,” Felich said. “So there are fewer sales, but they are for higher dollar amounts.”
The median price for a single-family home in Incline Village rose 10% to $1.3 million, according to data from the Chase International mid-year statistics. The report states that the median price for a home on South Shore — which includes the South Lake Tahoe and Stateline area — increased 3%, with the median single family home price going from $502,000 in 2018 to $515,000 in 2019.
But in the city of South Lake Tahoe, a noticeable softening of the market is taking place, according to Shannon Witt, president of the South Lake Tahoe Association of Realtors. When comparing the first half of 2019 to the first six months of 2018, median sales prices dipped slightly at 1% and the number of sales dropped 12% from 334 to 298. Witt also said the prices on some recent active listings were reduced.
The share of El Dorado County that falls in the Tahoe Basin has experienced a dramatic drop in sales through the first portion of 2019, with numbers down 23% this year compared to last, according to data provided by the South Lake Tahoe Association of Realtors. The median sale price rose 3%.
Witt speculated the stagnation in South Lake Tahoe could be due to Measure T, the citizen-initiated ballot measure intended to phase out all vacation home rentals outside of the tourist core. The measure was set to take full effect three years after its passage in 2018. A group filed suit and the city is actively trying to broker a compromise on the issue.
Any changes agreed to would have to appear before voters in the form of a ballot question.
It is too early to tell with certainty if Measure T is having an impact on the housing market, but Witt said real estate agents are seeing more second home buyers interested in lower priced property that they can afford without turning them into short-term rentals.
“Second-home buyers are purchasing homes in the city because they want the convenience of being close to the lake and Heavenly Mountain Resort,” she said in a statement via email. “And they can better afford them without renting them out on a short-term basis. But, they are competing with local buyers for these properties, which are typically ideal starter homes.”
Ken Bednar, a Realtor with Chase International and owner of Lake Tahoe Communities, said he is seeing some hesitation from clients who are looking to purchase a second home, which he suspects also has to do with Measure T.
“It (Measure T) definitely does affect us,” Bednar said. “They (Baby Boomers) want to have a second home in Tahoe, but they are not going to retire for a few years so renting out their home helps them pay the bills. It can kind of turn a client off.”
Bednar agreed that price points are up across the area. But he is noticing that his clients are taking longer to close on a property.
“We are seeing them go from about a year to a year and a half,” he said. “With interest rates down at an all-time low, many of our clients are the Baby Boomer population. They are looking to retire.”
Bednar said that his client base generally prefers properties on the Nevada side to avoid the higher tax rate across the state line. He added, “One thing I can see is on the Nevada side more clients are looking to do a second home that also doubles as a vacation rental.”
The market across the state slightly boomed, with homes sales in June on the up for the first time in nearly 15 months, a report from the California Association of Realtors states. The median sales price of homes was up 2.8% from 2018.
Along the rest of the West Coast the price of homes continues to surge, but home sales are continuously strengthening. The median sales price jumped 4.3% and year-over-year sales rose .6%, according to the National Association of Realtors.
Felich anticipates the current trend around Lake Tahoe will stay relatively the same throughout the year, maybe even picking up in the final weeks of the third quarter if interest rates remain at an all-time low. He noted that more than two dozen properties are in escrow along the North and West shores.
“The market is steadily moving along,” he said. “I always hear there is doom and gloom and that we are heading toward a downturn. And, we could be. But, I will believe it when I see it because things are looking pretty healthy right now.”