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South Lake Tahoe Market Update
As the holder of a bachelor’s in mathematics, I mine for a lot of real estate statistics. The following numbers present a good reflection of what’s happening in the South Lake Tahoe real estate market. Since January 2009, median sale price has leveled. The bottom of the market is near.
The market as a whole has 9.1 months supply of inventory. A balanced market is traditionally defined by 5 to 7 months supply of inventory. Because we have a greater suppy than this, we are still in a buyer’s market. However, we are approaching balance. If the market is divided into price bands, some segments have reached balance and have even entered into a seller’s market. In the $0-$200,000 price band, only 2.0 month’s supply of inventory remain. In the $200,000-$300,000 price band, 4.5 month’s supply of inventory exists. These numbers suggest there is a seller’s market in these price bands, which is the case. Lower priced properties are seeing multiple offers and are often selling for more than their list price. If you are seeking a property in this price band, now is probably the time to buyer. The market bottom for these properties may already be in our rearview. A surplus of inventory in the higher price bands suggest that nicer homes will continue to lose value.
Median Home Sale Price – November |
$320,000 |
Median Home Sale Price – Last 90 Days |
$306,125 |
Number of Active Home Listings for Sale |
314 |
Number of Home Listings in Escrow (% of Inventory) |
90 (22.3%) |
Average Sale Price to List Price Ratio |
94.7% |
Months Supply of Inventory |
9.1 |
June 2009 South Lake Tahoe Real Estate Market Update
It’s almost summer here in South Lake Tahoe, and while the temps aren’t too hot with this recent cold front, the real estate market is scorching. We haven’t seen buyer activity like this in years. I’ve seen several properties receive multiple, competing offers. They are oftentimes selling for more than list price. Things are getting crazy here and many of us real estate professionals are putting in long hours in order to keep up.
At the moment, there are 94 homes in escrow in South Lake Tahoe (We hit 100 last Friday.) We haven’t seen this many homes in escrow since July 2005, which was a month before the peak of the market. See the tables below for more statistics.
Our overall inventory is shrinking as well. Currently, there are 381 single-family residences for sale. Last year there were 414. The year before, 522. In May 2006, there were 424. With Tahoe homes reaching affordable prices and buyer confidence increasing, look for these trends to continue.
Speaking of prices, home prices have leveled off since the start of the year. I’ve checked the homes currently in escrow, and median sale price will continue to hold steady for at least the next couple months. Perhaps we are at the bottom of the market?? Statistics are increasingly pointing in that direction. A balanced market is traditionally defined by 5 to 7 months of inventory on the market. At 6.1 months of inventory, we have already reached that point in the under-$300,000 price band. We are quickly approaching that point in the $300,000-$400,000 price band. As inventory continues to decrease and sales increase, the statistics should catch up and begin to truly reflect how busy our market is.
A couple caveats …
Ninety-four homes in escrow today can’t be compared to 94 homes in escrow a few years ago. The reason for this is short sales. Short sales typically take longer to close than a normal escrow. Thus, with some homes sitting in escrow for long periods of time, this inflates the total. That said, however, only 15 short sale homes went into escrow over 45 days ago. Subtract these from our total and the 79 remaining homes in escrow still hasn’t been matched since September 2005, which was virtually the peak of the market.
In addition to this, the traditional definition of a balanced market, 5 to 7 months of inventory, may not apply in this market. Previous markets have not been affected by foreclosures like this. A new wave of foreclosures could drive prices down further. On the other hand, prices have leveled off for the last half year. And no one can argue that our shrinking inventory is a good sign of rebound.
All that said, now might be THE time to buy in South Lake Tahoe. And with another amazing Tahoe summer approaching, what better a time to come and start shopping!
Month & Year | Listings at Month’s End | Escrows at Month’s End | Homes Sold | Median $ Over Last 90 Days | Median Sale $ |
---|---|---|---|---|---|
May 2009 |
381
|
94
|
26
|
$315,000
|
$315,000
|
Apr 2009 |
383
|
60
|
28
|
$319,000
|
$295,000
|
Mar 2009 |
372
|
46
|
26
|
$320,000
|
$335,250
|
Feb 2009 |
381
|
39
|
28
|
$360,000
|
$329,500
|
Jan 2009 |
367
|
36
|
17
|
$370,000
|
$302,000
|
Dec 2008 |
354
|
32
|
26
|
$401,000
|
$412,450
|
Nov 2008 |
369
|
35
|
31
|
$425,000
|
$370,000
|
Oct 2008 |
395
|
35
|
46
|
$440,000
|
$470,000
|
Sept 2008 |
435
|
69
|
29
|
$420,000
|
$440,000
|
Aug 2008 |
468
|
45
|
34
|
$399,000
|
$443,750
|
July 2008 |
482
|
53
|
36
|
$396,000
|
$391,500
|
June 2008 |
465
|
57
|
30
|
$392,000
|
$365,000
|
May 2008 |
414
|
47
|
31
|
$396,000
|
$415,000
|
Apr 2008 |
372
|
44
|
21
|
$387,000
|
$379,000
|
Mar 2008 |
361
|
40
|
34
|
$402,500
|
$387,500
|
Feb 2008 |
374
|
52
|
16
|
$445,750
|
$412,500
|
Jan 2008 |
366
|
33
|
16
|
$466,500
|
$428,000
|
Dec 2007 |
382
|
28
|
34
|
$460,000
|
$502,000
|
Nov 2007 |
403
|
42
|
27
|
$415,000
|
$460,000
|
Oct 2007 |
353
|
15
|
39
|
$415,000
|
$425,000
|
Sept 2007 |
442
|
30
|
30
|
$415,000
|
$398,250
|
Aug 2007 |
538
|
45
|
38
|
$437,500
|
$421,500
|
July 2007 |
557
|
40
|
25
|
$440,000
|
$435,000
|
June 2007 |
552
|
33
|
35
|
$435,000
|
$440,000
|
May 2007 |
522
|
47
|
32
|
$465,500
|
$460,000
|
Apr 2007 |
423
|
32
|
28
|
$474,000
|
$392,500
|
Mar 2007 |
359
|
37
|
30
|
$482,500
|
$507,000
|
Feb 2007 |
327
|
25
|
25
|
$485,000
|
$492,500
|
Jan 2007 |
331
|
37
|
21
|
$475,750
|
$395,750
|
Dec 2006 |
339
|
29
|
40
|
$477,000
|
$497,500
|
Nov 2006 |
362
|
50
|
44
|
$464,000
|
$483,500
|
Oct 2006 |
411
|
55
|
53
|
$444,000
|
$450,000
|
Sept 2006 |
463
|
63
|
31
|
$449,500
|
$442,000
|
Aug 2006 |
548
|
46
|
36
|
$465,000
|
$427,500
|
July 2006 |
571
|
49
|
37
|
$480,000
|
$475,000
|
June 2006 |
532
|
51
|
37
|
$482,290
|
$480,000
|
May 2006 |
424
|
50
|
35
|
$482,580
|
$465,000
|
Apr 2006 |
302
|
50
|
32
|
$489,000
|
$504,000
|
Mar 2006 |
264
|
39
|
38
|
$495,000
|
$485,140
|
Feb 2006 |
262
|
51
|
21
|
$477,000
|
$489,000
|
Jan 2006 |
256
|
32
|
20
|
$464,500
|
$508,750
|
Dec 2005 |
198
|
n/a
|
31
|
$460,000
|
$450,000
|
Nov 2005 |
282
|
42
|
53
|
$485,000
|
$455,000
|
Oct 2005 |
300
|
69
|
55
|
$500,000
|
$485,000
|
Sept 2005 |
313
|
93
|
63
|
$495,000
|
$495,000
|
Aug 2005 |
270
|
96
|
79
|
$485,750
|
$510,000
|
July 2005 |
209
|
110
|
74
|
$482,000
|
$484,500
|
June 2005 |
188
|
113
|
65
|
$480,000
|
$456,000
|
May 2005 |
172
|
96
|
57
|
$489,000
|
$495,000
|
Apr 2005 |
116
|
91
|
72
|
$475,000
|
$488,500
|
Mar 2005 |
88
|
83
|
50
|
$440,000
|
$440,000
|
Feb 2005 |
72
|
86
|
34
|
$433,000
|
$449,500
|
Jan 2005 |
85
|
63
|
47
|
$405,000
|
$405,000
|
Price Range
|
Active Listings
|
Absorption Rate in sales/mo. (% of inventory) | Months Supply of Inventory (Sept.) |
---|---|---|---|
$0-$300,000 |
50
|
8.17 (16.33%)
|
6.1 |
$300,001-$400,000 |
67
|
8.08 (12.06%)
|
8.3
|
$400,001-$500,000 |
67
|
5.08 (7.59%)
|
13.2
|
$500,001-$650,000 |
57
|
4.00 (7.02%)
|
14.3
|
$650,001-$800,000 |
49
|
2.00 (4.08%)
|
24.5
|
$800,001-$1,000,000 |
35
|
1.33 (3.81%)
|
26.3
|
$1,000,001-$2,000,000 |
40
|
1.17 (2.92%)
|
34.3
|
$2,000,001 and up |
16
|
0.08 (0.52%)
|
192.0
|
September 2008 Statistics for South Lake Tahoe Real Estate
There’s been a bit of a buzz in the South Lake Tahoe real estate community. Have we hit the bottom of the market? Possibly. Check out the median sale prices over the last seven months. It looks like we hit bottom in June and have been heading up in the following months. Additionally, the median list price of homes in escrow right now is $437,000. I’d expect that number to drop to about $412,000 because our sale-price-to-list-price ratio on the year is 94.23%. These numbers fall in line with the theory that we have hit the bottom of the market.
What do I think? I’m skeptical. I wish I remembered enough from my college stats class to back this up, but I don’t think enough homes have sold over a long enough period of time to claim that the market’s downward trend has come to a halt. I’ll be happy when we sell off some more of this oversupply of homes.
Speaking of, South Lake Tahoe’s supply of homes did dwindle some at the turn of the month when seventy listings expired. Only thirteen of those listings are back on the market. With less competition amongst listings, now isn’t a bad time to list.
Other notable activity in September occurred in the foreclosure market. Of the 28 single-family residences that sold in September, 7 of them were foreclosures (25%). At the turn of the month, there were 12 foreclosures in escrow and 15 short sales in escrow. We’re seeing a lot of distressed sales. It’s no wonder that banks are folding on a daily basis.
Only 3 condos sold in the last month. However, some buyers were thinking about the upcoming ski season. An unusually high 6 condos went into escrow.
Four lots went into escrow last month and only two sold. It’s been very slow in the dirt market.
I’d love to hear your comments on any of this. I will update a few numbers as some agents haven’t been able to input their September sales in the MLS yet.
Month & Year | Listings at Month’s End | Escrows at Month’s End | Homes Sold | Median $ Over Last 90 Days | Median Sale $ |
---|---|---|---|---|---|
Sept 2008 |
443
|
78
|
28
|
$417,500
|
$435,000
|
Aug 2008 |
499
|
61
|
34
|
$399,000
|
$443,750
|
July 2008 |
494
|
64
|
36
|
$396,000
|
$391,500
|
June 2008 |
465
|
57
|
30
|
$392,000
|
$365,000
|
May 2008 |
414
|
47
|
31
|
$396,000
|
$415,000
|
Apr 2008 |
372
|
44
|
21
|
$387,000
|
$379,000
|
Mar 2008 |
361
|
40
|
34
|
$402,500
|
$387,500
|
Feb 2008 |
374
|
52
|
16
|
$445,750
|
$412,500
|
Jan 2008 |
366
|
33
|
16
|
$466,500
|
$428,000
|
Dec 2007 |
382
|
28
|
34
|
$460,000
|
$502,000
|
Nov 2007 |
403
|
42
|
27
|
$415,000
|
$460,000
|
Oct 2007 |
353
|
15
|
39
|
$415,000
|
$425,000
|
Sept 2007 |
442
|
30
|
30
|
$415,000
|
$398,250
|
Aug 2007 |
538
|
45
|
38
|
$437,500
|
$421,500
|
July 2007 |
557
|
40
|
25
|
$440,000
|
$435,000
|
June 2007 |
552
|
33
|
35
|
$435,000
|
$440,000
|
May 2007 |
522
|
47
|
32
|
$465,500
|
$460,000
|
Apr 2007 |
423
|
32
|
28
|
$474,000
|
$392,500
|
Mar 2007 |
359
|
37
|
30
|
$482,500
|
$507,000
|
Feb 2007 |
327
|
25
|
25
|
$485,000
|
$492,500
|
Jan 2007 |
331
|
37
|
21
|
$475,750
|
$395,750
|
Dec 2006 |
339
|
29
|
40
|
$477,000
|
$497,500
|
Nov 2006 |
362
|
50
|
44
|
$464,000
|
$483,500
|
Oct 2006 |
411
|
55
|
53
|
$444,000
|
$450,000
|
Sept 2006 |
463
|
63
|
31
|
$449,500
|
$442,000
|
Aug 2006 |
548
|
46
|
36
|
$465,000
|
$427,500
|
July 2006 |
571
|
49
|
37
|
$480,000
|
$475,000
|
June 2006 |
532
|
51
|
37
|
$482,290
|
$480,000
|
May 2006 |
424
|
50
|
35
|
$482,580
|
$465,000
|
Apr 2006 |
302
|
50
|
32
|
$489,000
|
$504,000
|
Mar 2006 |
264
|
39
|
38
|
$495,000
|
$485,140
|
Feb 2006 |
262
|
51
|
21
|
$477,000
|
$489,000
|
Jan 2006 |
256
|
32
|
20
|
$464,500
|
$508,750
|
Dec 2005 |
198
|
n/a
|
31
|
$460,000
|
$450,000
|
Nov 2005 |
282
|
42
|
53
|
$485,000
|
$455,000
|
Oct 2005 |
300
|
69
|
55
|
$500,000
|
$485,000
|
Sept 2005 |
313
|
93
|
63
|
$495,000
|
$495,000
|
Aug 2005 |
270
|
96
|
79
|
$485,750
|
$510,000
|
July 2005 |
209
|
110
|
74
|
$482,000
|
$484,500
|
June 2005 |
188
|
113
|
65
|
$480,000
|
$456,000
|
May 2005 |
172
|
96
|
57
|
$489,000
|
$495,000
|
Apr 2005 |
116
|
91
|
72
|
$475,000
|
$488,500
|
Mar 2005 |
88
|
83
|
50
|
$440,000
|
$440,000
|
Feb 2005 |
72
|
86
|
34
|
$433,000
|
$449,500
|
Jan 2005 |
85
|
63
|
47
|
$405,000
|
$405,000
|
Price Range
|
Active Listings
|
Absorption Rate in sales/mo. (% of inventory) | Months Supply of Inventory (Sept.) | Months Supply of Inventory (Aug.) | Months Supply of Inventory (July) |
---|---|---|---|---|---|
$0-$300,000 |
37
|
4.00 (10.81%)
|
9.3 |
8.8
|
5.2
|
$300,001-$500,000 |
168
|
18.00 (2.68%)
|
9.3
|
13.8
|
12.4
|
$500,001-$750,000 |
112
|
5.67 (1.26%)
|
19.8
|
19.7
|
21.8
|
$750,001-$1,000,000 |
61
|
2.67 (1.09%)
|
22.9
|
34.0
|
31.5
|
$1,000,001-$2,000,000 |
50
|
1.00 (0.50%)
|
50.0
|
22.5
|
28.0
|
$2,000,001 and up |
15
|
0.00 (0.00%)
|
n/a
|
n/a
|
n/a
|
* For the sake of statistical integrity, my absorption rates are no longer considering sales for the last year. They are now calculated using sales for the last 90 days. For more information on why I decided on the change, e-mail me at drew@southtahoehouses.com.
Months Supply of Inventory (MSI) and Absorption Rates in Real Estate
I love real estate statistics. I got a math degree from the University of Texas, so I could make a career of real estate stats. In this blog, I’ll keep things relatively simple.
In efforts to improve the statistics I present you, I am beginning to mine for and calculate absorption rates and months supplies of inventory for you. These stats are important because they reflect how a market is doing. They also help savvy buyers and sellers establish and meet their goals.
Absorption rate – the rate at which real estate is sold, or absorbed, in a specific area
I calculate absorption rates in terms of homes sold per month. Thus, for South Lake Tahoe the absorption rate is the number of homes sold in the last year, 341, divided by the months in a year, twelve. 28.4 homes are sold per month in South Lake Tahoe. This is the absorption rate. (Feel free to skip the rest of this paragraph.) Some people like to express absorption rates in relation to the amount of inventory. Our inventory in South Lake Tahoe is 476 homes. Thus, 28.4 homes is 5.97% of the inventory; so the absorption rate is 5.97% of the inventory per month.
Months supply of inventory (MSI) – an estimation of how long it will take for all the market’s homes to be sold, or absorbed, based on how many homes are currently on the market and the rate homes have sold in the past (absorption rate).
This is pretty simple. If 28.4 homes are sold per month in South Lake Tahoe, how long will it take to sell 476 homes? Divide homes by homes sold per month (476/28.4 = ???). It will take 16.76 months to sell all the houses. This is the months supply of inventory (MSI). You may now be asking, “Who cares? New homes are listed all the time. You’ll never sell the entire inventory in South Lake Tahoe.”
This is true. MSI is simply used to compare the size of an inventory to the rate of sale. This is very important. MSI is a great indicator of how balanced a market is.
MSI less than 5 months = seller’s market
MSI equals 5-7 months = balanced market
MSI greater than 7 months = buyer’s market
These guidelines are not fool-proof. Notice in the table below there is a 6.7 month supply of inventory in the sub-$300,000 price band in South Lake Tahoe. Any seller in this price band will tell you it’s not a balanced market. The buyers continue to call the shots. The MSI stat was skewed in this price band by desperate sellers, especially banks, who bent over backward in the last year for buyers. Thus, the absorption rate was increased, which decreased the MSI.
So how can these stats help you? I’ll preface the answer by saying that no mathematical model can be used to determine what will happen in real estate. There are way too many factors involved. That having been said …
For sellers, these stats will tell you how much competition you have. Let’s consider a seller with a $1,500,000 listing in South Lake Tahoe. With almost 33 months of inventory, he better think about some serious price reductions if he wants to sell soon. The seller with a sub-$500,000 listing (6.7-13.3 months of inventory) should also think about a price cut. However, there is a greater chance he’ll get lucky and find a buyer who loves his home and qualifies for a loan.
For buyers, MSI will tell you how negotiable sellers may be in different markets. If there are 3.5 months of inventory in Bangladesh and 10.2 months of inventory in Baghdad, the sellers in Baghdad will probably be more negotiable.
If you have questions about these statistics feel free to comment, e-mail me (dkondo@chaseinternational.com), or call me (530-545-1831).
South Lake Tahoe real estate statistics as of 7/1/2008
Price Range
|
Active Listings
|
Absorption Rate in sales/mo. (% of inventory) | Months Supply of Inventory |
---|---|---|---|
$0 – $300,000 |
32
|
4.75 (14.84%)
|
6.7
|
$300,001-$500,000 |
173
|
13.00 (7.51%)
|
13.3
|
$500,001- $750,000 |
127
|
6.33 (4.99%)
|
20.1
|
$750,001- $1,000,000 |
68
|
2.50 (3.68%)
|
27.2
|
$1,000,001- $2,000,000 |
57
|
1.75 (3.07%)
|
32.6
|
$2,000,001 and up |
16
|
0.08 (0.52%)
|
192
|