Lower Inventory Equals Higher Prices
We have come a long way since the Great Recession ended and the economy turned around. But, it's worthwhile to take a look back and quantify some of the changes so we can understand the current state of the real estate market on the Nevada side of North Lake Tahoe.
During the depths of the recession between 2008 and 2010 inventory levels skyrocketed as prices plunged anywhere from 25% to 60% depending on the location and attributes of any particular property. While prices have recovered substantially they are still below the peak that was reached during the middle of the previous decade. As prices have risen we have seen a steady decline in the inventory level of houses, condos and freestanding condos for sale in our community.
In mid-November of 2009 there were 439 properties for sale in Incline Village and Crystal Bay. Fast-forward to 2017 and the current inventory level is hovering around 190 houses, condos and freestanding condos listed on the Incline Village MLS. We are looking at approximately 400 total unit sales in 2017 vs. just 156 sales in 2009.
Prices in our market didn't bottom out until the end of 2011. One of the main reasons for that is because the vast majority of purchases here are vacation homes and there tends to be a time lag when markets are rising or declining. Also, most property owners in Incline Village and Crystal Bay are relatively affluent and have more staying power than a typical residential buyer in middle America. As a result, it took longer for prices to decline here than in most parts of the country. And the same was true when it came to prices recovering after the recession ended.
There was a rather significant jump in both prices and units sold in 2012 and 2013 as buyers rushed in to take advantage of a perceived bottom in the market. Sales have continued strong during the past 4 years even as prices continue to rise; albeit at a much healthier rate and not characterized by the spikes we have seen during previous boom and bust cycles. The increase in demand has eroded the inventory of properties for sale to the point where we now have a supply that is less than half the level seen during the Great Recession.
Of particular note is the generally low level of inventory for condos. At the present time we have approximately a 3 month supply which is far below the norm. Consequently, condos in good locations with desirable floor plans are being snapped up quickly if they are priced reasonably. In some complexes such as The Pointe or Skylake there are no properties for sale at all. There are 3 properties for sale in McCloud but none of them are three-bedroom units.
Buyers need to keep in mind that as long as the inventory is relatively low in any particular area and demand remains reasonably high, prices will continue a steady march upward into the foreseeable future.
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Weekly Real Estate Update
Statistics gathered from the Incline Village MLS on 11/12/17
Houses Condos PUDs
For Sale 118 46 27
Under $1 million 32 34 14
Median Price For Sale $1,595,000 $559,000 $998,000
YTD Sales 2017 146 177 48
YTD Sales 2016 145 176 51
New Listings 6
In Escrow 14
Closed Escrow 4
Range in Escrow $260,000 - $1,899,000
These statistics are based on information from the Incline Village Board of REALTORS® or its Multiple Listing Service as of November 12, 2017