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South Lake Tahoe Real Estate Market Update

South Lake Tahoe Real Estate Update- The Worst Home Price Declines Are Behind Us

 

The South Lake Tahoe Real Estate market seems to be following the national norm- Low inventory and stabilizing home prices. 

If you’re following the news today, you may feel a bit unsure about what’s happening with home prices and fear whether or not the worst is yet to come. That’s because today’s headlines are painting an unnecessarily negative picture. Contrary to those headlines, home prices aren’t in a freefall. The latest data tells a very different and much more positive story. Local home price trends still vary by market, but here’s what the national data tells us.

If we take a year-over-year view, home prices stayed positive – they just appreciated more slowly than they did at the peak of the pandemic. To get a more detailed picture of some of the trends in the market, we need to look at monthly data. 

The monthly graphs below use recent reports from three sources to show that the worst home price declines are already behind us, and prices are on their way back up nationally.

The story this more detailed monthly view tells us is that the last year has been a tale of two halves in the housing market. In the first half of 2022, home prices were climbing, and they peaked in June. Then, in July, home prices started to decline (shown in red in the graphs above). And by roughly August or September, the trend began to stabilize. As we look at the most recent data for the early part of 2023, these graphs also show a recent rebound in momentum with prices ticking back up. Monthly changes in home prices are gaining steam as we move into the busier spring season. 

While one to two months doesn’t make a trend, the fact that all three reports show prices have stabilized is an encouraging sign for the housing market. The month-over-month data conveys a clear, but early, consensus that a national shift is taking place today. In essence, home prices are starting to tick back up.

Andy Walden, Vice President of Enterprise Research at Black Knight, says this about home price trends: 

“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”

Selma Hepp, Chief Economist at CoreLogic, explains the limited supply of homes available for sale is contributing to this positive turn:

“ . . . prices in many large metros appeared to have turned the corner, with the U.S. recording a second month of consecutive monthly gains. . . . The monthly rebound in home prices underscores the lack of inventory in this housing cycle.” 

Here’s What This Means for You 

  • Sellers: If you’ve been holding off on selling because you’re worried about what was happening with home prices and how it would impact the value of your home, it may be time to jump back in and partner with an agent to list your house. You don’t have to put your needs on hold any longer because the latest data shows a turn in your favor. 
  • Buyers: If you’ve been waiting to buy because you didn’t want to purchase something that would decrease in value, you now have the peace of mind things are looking up. Buying now lets you make your move before home prices climb more and gives you the chance to own an asset that typically grows in value over time. 

If we look at the localized South Lake Tahoe Real Estate market, there are currently only 53 active residential listings on the South Tahoe MLS. There are 49 single family homes and 4 condo townhouses. This is actually down from 90 active listings just one year ago. There are currently 33 pending sales which is up from only 27 last month however, the escrow count is down from 56 from May, 2022.

Spring is typically the listing season in Lake Tahoe so I would anticipate that we will see the active listing count closer to 100 by July, bringing a more robust selection of homes for buyers to choose from. 

Bottom Line

If you put off your plans to move because you were worried about home prices falling, data shows the worst is already behind us and prices are actually rising nationally. Let’s connect so you have an expert on the local market to explain what we’re seeing with home prices in our area. I can be reached at 530-416-2625 or via email at bjohnson@chaseinternational.com!

South Lake Tahoe Real Estate Forecast

South Lake Tahoe Real Estate Forecast for 2023

Over the past year, home prices in South Lake Tahoe have been a widely debated topic. On a national level, some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – which hasn’t happened. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.

Selma Hepp, Chief Economist at CoreLogic, says:

“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”

Additionally, every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:

So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider making a move:

  1. Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has risen consistently. The bottom line is, rent is going up.
  2. Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
  3. Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a renter.

The current inventory of homes for sale in South Lake Tahoe has remained extremally low, partially due to the record breaking snowfall that the Sierran Nevada’s have seen this year. With over 52 feet of snow recorded (and still counting) this winter, listing and selling homes has taken a bit of a back seat.

There are currently only 36 active single family homes and 8 condo/townhouses listed on the South Lake Tahoe MLS. This is up slightly from last year to date. The number of homes in escrow is down significantly from last year. Currently there are 33 pending sales on the mls compared to 8o pending sales in March, 2022. 

I am predicting that we will see a significant increase in the number of homes for sale from April through July as the weather improves and as the snow melts. This historical winter has delayed many sellers from listing and additionally, we usually see a significant bump in our housing inventory in the late spring and early summer.

Experts are projecting slight price depreciation in the housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.

If you have any questions about the South Lake Tahoe real estate market, please call me today at 530-416-2625 or shoot me an email at bjohnson@chaseinternational.com! 

Preparing your Tahoe home for the market!

Spring into Action: Boost Your Tahoe Home’s Curb Appeal with Expert Guidance

Spring into Action: Boost Your Home’s Curb Appeal with Expert Guidance | MyKCM

To sell your home this spring, it may need more preparation than it would have a year or two ago. Today’s housing market has a different feel. Inventory  of homes for sale is still historically low but there are less buyers in the market. So, if a house has been sitting on the market for a while, that’s a sign it may not be hitting the mark for potential buyers. But here’s the thing. Right now, homes that are updated and priced at market value are still selling fast. 

Today, homes with curb appeal that are presented well are still selling quickly, and sometimes over asking price. According to Danielle Hale, Chief Economist at realtor.com:

“In a market where costs are still high and buyers can be a little choosier, it makes sense they’re going to really zero in on the homes that are the most appealing.”

With the spring buying season just around the corner, now’s the time to start getting your house ready to sell. And the best way to determine where to spend your time and money is to work with a trusted real estate agent who can help you understand which improvements are most valuable in your local market.

Curb Appeal Wins

One way to prioritize updates that could bring a good return on your investment is to find smaller projects you can do yourself. Little updates that boost your curb appeal usually work well. Investopedia puts it this way:

“Curb-appeal projects make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster—and you can do a lot of the work yourself to save money and time.”

Small cosmetic updates, like refreshing some paint and power washing the exterior of your home, create a great first impression for buyers and help it stand out. Work with a real estate professional to find the low-cost projects you can tackle around your house that will appeal to buyers in your area.

Not All Updates Are Created Equal

When deciding what you need to do to your house before selling it, remember you’re making these repairs and updates for someone else. Prioritize projects that will help you sell faster or for more money over things that appeal to you as a homeowner.

The 2022 Remodeling Impact Report from the National Association of Realtors (NAR) highlights popular home improvements and what sort of return they bring for the investment (see graph below):

Spring into Action: Boost Your Home’s Curb Appeal with Expert Guidance | MyKCM

Remember to lean on your trusted real estate advisor for the best advice on the updates you should invest in. They’ll know what local buyers are looking for and have the latest insights of what your house needs to sell quickly this spring.

Bottom Line

As we approach the spring season, now’s the time to get your house ready to sell. Let’s connect today so you can find out which updates make the most sense.

South Lake Tahoe Housing Market

The Two Big Issues the South Lake Tahoe Housing Market’s Facing Right Now

The Two Big Issues the Housing Market’s Facing Right Now | MyKCM

The biggest challenge the South Lake Tahoe housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:

“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy.”

There are currently ONLY 35 single family homes listed on the South Lake Tahoe MLS in the city and county areas of South Lake Tahoe and only 10 condo/townhouses. The crazy thing is that there are 39 pending single family homes and 7 pending condo/townhouses which means that over 50% of the properties for sale in South Lake Tahoe are under contract!

Let’s break down these two big issues in today’s housing market.

Rate-Locked Homeowners

According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):

But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.

When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens.

The Fear of Not Finding Something To Buy

The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.

What Does This Mean for You?

These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage.

Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to ATTOM:

“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”

This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.

Bottom Line

Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low in South Lake Tahoe and across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to the market in the late spring and early summer. 

Tahoe Real Estate Forecast

Experts Forecast a Turnaround in the Housing Market in 2023

Experts Forecast a Turnaround in the Housing Market in 2023 | MyKCM

Tahoe Real Estate Forecast- The nationwide housing market has gone through a lot of change recently, and much of that was a result of how quickly mortgage rates rose last year. The Lake Tahoe housing market was also affected with less demand and lower overall sales numbers. 

Now, as we move through 2023, there are signs things are finally going to turn around. Home price appreciation is slowing from the recent frenzy, mortgage rates are coming down, inflation is easing, and overall market activity is starting to pick up. All of that’s great news for the housing market this year. Here’s what experts are saying.

Cristian deRitis, Deputy Chief Economist, Moody’s Analytics:

“The current state of the housing market is that it is certainly in transition.”

Susan Wachter, Professor of Real Estate and Finance, University of Pennsylvania’s Wharton School:

“Housing is going to ease up. I think 2023 will be a turnaround year.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

“Mortgage rates have fallen in the recent past weeks, so I’m very hopeful that the worst in home sales is probably coming to an end.”

Robert Dietz, Chief Economist and Senior Vice President, National Association of Home Builders (NAHB):

“. . . it appears a turning point for housing lies ahead. In the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability.”

In South Lake Tahoe we did see appreciation slow significantly. The median sales price in December was $715,000, up only 1.1% from December, 2021. 

Currently, there are only 52 single family homes and condo/townhouses on the South Lake Tahoe MLS which is a historically low inventory of homes for sale in our area. There are 37 single family homes and condo/townhouses that are currently pending which accounts for almost 42% of the current inventory being in escrow. 

We will see our inventory of homes for sale increase this spring and early summer which will give buyers a better selection of homes to choose from.

Bottom Line

If you’re thinking about making a move this year, a turnaround in the housing market could be exactly what you’ve been waiting for. Let’s connect to talk about the latest trends in our area.

Lake Tahoe Housing Market!

The South Lake Tahoe housing market is having a sleepy start to 2023 due to limited inventory, higher interest rates, and low housing affordability. There are currently only 51 single family homes and 14 condos/townhouses actively for sale on the entire South Lake Tahoe MLS. Inventory is down slightly from last year (1/4/22) when we had 55 active single family home listings and 11 condo/townhouses for sale.

The biggest indicator that the South Lake Tahoe housing market has slowed is the pending sales count. There are currently only 21 pending

Lake Tahoe Housing market update single family homes and just 1 pending condo/townhouse. Last year to date, there were 50 pending single family homes and just 2 pending condo/townhouses.  

Lake Tahoe Housing Market Listing Price to Selling Price Rates

Many of the homes that are currently listed on the South Lake Tahoe MLS are properties that have been listed for sometime, and the average days on the market for these listings is 103. We are noticing that the properties that have been listed for more than 30 days are selling for around 4% less than the asking price. The properties that are selling that have been listed for over 120 days are selling for 8% less than the asking price on average. The listings that are selling in less than 30 days are selling for less than 2% under the asking price. 

The average days on the market for the listings that have sold over the last 3 months has been 104 days, the median days on the market has been 83. 

DOM Statistics for Sold Listings

  # of Listings % of Total SP % LP
10 9 98.24
27 25 96.20
21 19 96.17
16 14 95.74
33 30 92.21
107 100 95.71

Lake Tahoe housing Market Sales History over the last 3 years

The number of total single family homes and condo/townhouses that were report as sold on the South Lake Tahoe MLS has gone down over the last 3 years. 

In 2022 there were 646 reported sales in the city and county areas of South Lake Tahoe, down from 801 sales in 2021, and 1,016 sales in 2020.

Below is a breakdown by price range of the 22 current pending sales:

  • Under $200,000- 0  0%
  • $201,000 to $300,000- 1   4.5%
  • $301,000 to $400,000- 1  4.5%
  • $401,000 to $500,000- 2
  • $501,000 to $600,000- 5
  • $601,000 to $700,000- 5
  • $701,000 to $800,000- 0
  • $801,000 to $999,000- 4
  • Over $1 Million- 2

In order to successfully navigate the South Lake Tahoe housing estate market, homes sellers are having to price their properties according to the current market conditions.