South Tahoe home prices drop in Q3
October 22, 2011
With the median price of South Lake Tahoe homes down in the third quarter of 2011 compared with the third quarter of 2010 and mortgage rates hovering around 4 percent, the market is prime for buyers – according to most Realtors.
“As prices drop, homes become more affordable for buyers,” said Jim Wire, spokesman for the South Tahoe Realtor’s Association and a Realtor with Chase International. “What the stats don’t show is that it’s not uncommon to see buyers competing for the better buys and behaving like hungry piranhas.”
Demand for homes has stayed about on par with 2010, with only a 2 percent decline in sales in 2011 v. 2010, according to Wire.
“There are a plenty of buyers out there that will share their frustrations with you as they have been beaten by a higher bidder several times,” Wire said. “If a home is perceived to be below market value, then you have to be very quick. More than anything, it takes luck to get the better buys and timing is everything.”
It’s not an influx of distressed sales that’s lowered the median home price, said Richard Bolen, a local Realtor with McCall Realty and author of the http://www.laketahoerealestateblog.com. So far, the percentage of homes sold that were distressed is about on par with the first quarter of 2011. Instead, homes are being listed at lower prices to begin with, he said.
The average list price of a homes sold in the first quarter of 2011 was $419,183, according to Bolen. The average list price of homes sold in the third quarter was $352,123 – almost 16 percent less.
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The percentage of homes sold for less than $300,000 has increased 5 percent since the beginning of the year, Bolen said.
“Sellers that are active in the real estate market on the South Shore know that most of the sales activity is occurring below $350,000,” Wire added.
While this is fodder for buyers hungry for a deal, it’s also a signal that sellers should pay attention too, Bolen said.
“Here’s what we know is true in this market in particular, a home is going to cost a buyer a little bit more than they think and a home is going to sell for less and possibly and take longer to sell than what a seller wants,” Bolen said.
The third quarter median home price of $248,000 in the city of South Lake Tahoe and $261,000 city and county homes sold from July 1 to Sept. 31, also questions the perceived median home price in South Lake Tahoe, Bolen said.
“We’ve used it for years – $300,000 was always the South Lake Tahoe median in our minds and the truth is the South Lake Tahoe median is below $250,000,” Bolen said. “There has to be a re-introduction of what that number is.”
However, while South Lake Tahoe home prices may be dipping, lakefront property sales saw an uptick in the third quarter, Wire said. So far in 2011, six lakefront properties on the East Shore have sold, followed by four lakefront properties on the South Shore.
Chase International Corporate Vice President Sue Lowe sold three lakefront properties this year.
“One of the three buyers had bought on a whim,” Lowe said. “Whereas the other two, I have been working with for at least five years. So why did they choose to buy now? The lower values are just too hard to resist.”
That desire for the perfect deal is driving most buyers and movement in the housing market, Wire said.
“The good news for sellers is that the market remains active and alive,” Wire said. “Even though it’s the lower prices that are driving the market, the upside is that at least homes are still selling. Our market is slowly but surely moving forward and it’s only a matter of time before it begins to cycle back.”