This May Be a Good Time to Invest in Lake Tahoe Real Estate
By Theresa Souers, Pinnacle
Real Estate Group of Lake Tahoe, Inc.
While many people are aware that South Lake Tahoe
has become one of the country’s most popular resort
destinations, even it today’s challenging real
estate market, South Lake Tahoe continues to reign as
one of the top-advised areas within California in which
to invest in real estate.
In Lake Tahoe’s vibrant real estate market,
inventory is approximately twice that of 2005, the median
home prices are down slightly and the sellers are negotiating
more than ever. Adding to the lure of the area, the
word that South Lake Tahoe’s next redevelopment
phase is underway is beginning to gain national attention.
More details on this redevelopment is below; but most
importantly, there is already enthusiasm that recalls
the frenzy that took place following Vail’s purchase
of South Tahoe’s Heavenly Mountain Ski Resort,
it is almost certain that today’s lower values
will not last long.
Larger Inventory Means More Buyer Options
The dynamic of supply vs. demand is definitely in the
buyers’ corner. As of August 26, 2007, there were
586 single family residences for sale with 56 currently
in escrow. This volume of inventory is considerably higher
than the 366/96 reported in August, 2005 (although slightly
less than the 594/46 reported August 31, 2006.)
Affordable Prices
South Lake Tahoe real estate continues to be affordable.
When compared to other international resort areas, South
Lake Tahoe’s median home price of $463,000 is a
fraction of those found in Aspen, Colorado ($1,199,700.)
Vail, Colorado ($791,000.) Park City, Utah ($605,000.)
and our neighbor Tahoe City ($1,001,500.) Even when compared
to the entire state of California’s median home
price of $586,030, South Lake Tahoe real estate property
values appear to be bargains—with the lake, mountains,
blue sky and pristine seasons as added dividends.
Negotiating Leverage
Supply and demand and consumer confidence have played
a great role in the negotiating strength of today’s
buyers. As is common in the South Lake Tahoe real estate
market, when the summer months begin to wane, sellers
become more anxious to sell. In a nutshell, they want
to close escrow prior to the first snowfall. As long as
the inventory of homes for sale is up, there is greater
room for buyers to negotiate the sales price and other
accommodations. To provide some perspective on this price
leverage, during 2005, the average home sold for approximately
98.5% of the list price. Today, the average home is selling
for 95.8% of the asking price.
Expansive Redevelopment
Following many years of planning, dreaming and hoping,
the next phase of South Lake Tahoe’s redevelopment
phase is underway. Mostly rundown motels, shops and similar
structures have been demolished with plans for the future
underway. In their place will be a 71,000 square foot
convention center and two hotel-condominiums featuring
boutique shops, entertainment and proximity to nearly
all that the South Lake Tahoe Stateline area has to offer.
Developers are anticipating this project to bring in approximately
180,000 visitors a year.
The Right Time to Invest In South Lake Tahoe Real Estate?
History would indicate that the answer is “yes.”
South Lake Tahoe’s real estate values have generally
escaped the dramatic declines that have affected various
regions of the state throughout the years. According to
Leslie Appleton-Young, chief economist for the California
Association of Realtors®, “With credit drying
up in recent weeks, we expect further weakness in sales
over the next few months.” She continued to add
that the decline in sales continues to be driven by both
tighter underwriting standards since the start of the
year and the adverse psychological impact of news and
information regarding increases in foreclosures and the
sub-prime mortgage situation.
At the same time, in South Lake Tahoe, a door seems
to have been opened and according to a recent article
in Inman News, one in five economists surveyed predicted
a "meaningful" recovery in U.S. housing markets
before the second half of 2008. About 38 percent expected
a recovery in the second half of 2008, while 42 percent
said housing markets won't turn around until 2009 or
later. Our recommendation is to take advantage of the
opportunities that are presented within the upcoming
months.
For us personally as well as professionally, we have
found that owning Lake Tahoe real estate is a far more
enjoyable way in which to watch your investments grow
when compared to other options. When given the choice
of sitting on a the lake beach and swishing down world-class
ski slopes vs. pulling out hair out watching the stock
market, our choice is clear. |
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