The Tahoe real estate market does not follow the national market.
While discussing the state of the Tahoe real estate market last month, I was presented the argument that the number of home sales are down over the last several years. Surprisingly, this is a statistic I did not track, so I went to work in the MLS and started mining data. When finished, even I was shocked at the results.
|Time Period||Home Sales|
|1/1/2010 – 6/30/2010||
|1/1/2009 – 6/30/2009||
|1/1/2008 – 6/30/2008||
|1/1/2007 – 6/30/2007||
|1/1/2006 – 6/30/2006||
|1/1/2005 – 6/30/2005||
|1/1/2004 – 6/30/2004||
|1/1/2003 – 6/30/2003||
When I compiled these figures we were only through half of 2010, so I totaled the number of home sales for the first half of each year as far back as the MLS had record. I was amazed to find that sales are up 45% over last year, and homes are selling at the same pace they were in 2003! These numbers also suggest the correction in the real estate market may be in the rearview. The middle point between the peak – 347 – and the trough – 148 – is 248, which nearly matches this year’s total of 239. Furthermore, over these eight periods, the average number of sales is 228, which also nearly matches this year’s total of 239. Home sales bounced up, fell down, and are now at the midpoint. This midpoint is accurate as 2010 Tahoe home sales were unaffected by homebuyer tax credits because our resort market hardly sells primary residences, which were the only sales providing tax credits. The Tahoe real estate market does not follow the national market.
In addition to my recent findings, median home sale price has remained level in South Lake Tahoe since January 2009* (see graph below). Year-over-year inventory continues to decrease. Based on supply vs. demand (previous sales versus our current supply of homes), our market still favors buyers but only slightly. Our market will reach a technical, numbers-based balance within months. It may have already attained an actual balance.
Our market does not follow the national market. Our buyers represent a unique subset of buyers who seek to purchase vacation homes. They have more financial power than almost any other group of buyers in the nation. They were not affected by the downturn in the economy like the average U.S. citizen. They could have purchased at any point during the real estate downturn, but they sat on the fence waiting for the bottom. Now that it appears to be here, they are purchasing Tahoe homes in droves – at the same pace of 2003. What’s the old saying? Those who purchase when no one else will are those who will become rich.
Drew Kondo received his Bachelor’s of Mathematics from UT-Austin in 2001 and now sells real estate on the Tahoe south and east shores. To contact him, call 530.545.1831 or email firstname.lastname@example.org.
* When comparing my median sale price statistics to those of other sources, it must be understood that I present median sale price for individual months and only incorporate sales from that month. This provides the most accurate representation of what occurred in that month. Other organizations offering real estate data often squeeze sales from the previous twelve months into a single month. This flattens data and makes it easier to interpret, but it also fails to represent what actually occurred in any given month.