Real estate: Lake Tahoe is much more than a single market

It’s that time of year when agents, brokers and “media-tyoes” write articles and provide commentary on the Lake Tahoe real estate market.

Much of this material can be misleading because Lake Tahoe is not one real estate market but many submarkets each divided into a number of sectors. You can’t even legitimately lump together the sales of communities in North Lake Tahoe or South Lake Tahoe and extrapolate prices or trends because there are too many submarkets on each side of the lake.

Just in Incline Village and Crystal Bay we have 12 different market sectors for residential property. Then you also have to consider the multiunit investment residential properties, commercial properties and raw land. So, anyone writing generalizations about the Lake Tahoe real estate market and then trying to use those broad statistics to make sweeping statements is simply misleading the general public with inaccurate information. It’s a disservice to buyers, sellers and anyone connected with the real estate community to spout statistics that do not accurately reflect local market conditions.

During summertime we can anticipate seeing the usual pie charts, bar graphs, statements about market share, median prices, average prices and other types of numerical data. Much of the time these statistics are cleansed or skewed to represent a particular point of view or make one company look better than another on paper. The reality is that anyone making claims about the Lake Tahoe real estate market as a whole and then trying to use those claims to justify one position or another is really doing nothing more than obfuscating the issue.

The Incline Village real estate market bears absolutely no relation to the Kings Beach area which bears no relation to Zephyr Cove real estate and so on. It may be difficult for non-residents of Lake Tahoe to accept that there are so many different markets within the Lake Tahoe basin but that is the harsh reality. If you have been shopping for single-family homes at South Lake Tahoe and then go to Glenbrook because on the map it doesn’t look very far away you will most likely get sticker shock.

Even within the Incline Village and Crystal Bay real estate market new buyers are easily confused by the widely varying prices for properties of similar square footage and condition. We are not just talking about the difference between a house on a busy street versus one in a quiet location with a panoramic lakeview. Some subdivisions are considered more desirable than others based on location, proximity to the beach, lot size, sunlight exposure and other factors. You can’t just say houses in Incline Village are worth X dollars per square foot because there are so many variables one must consider.

Worst of all are the various real estate valuation services on the Internet such as Zillow and House Values that use proprietary algorithms to provide estimates of property values along with information on price trends all across America. Unfortunately, these services are unable to provide local knowledge or differentiate between a house that was recently remodeled and the tear down next-door.

The only way to truly know how a particular market sector within the Lake Tahoe basin is performing is to do a detailed analysis for that specific area. It takes a lot of time and energy to crunch the numbers, analyze individual properties and draw realistic conclusions, something that a generic algorithm on a computer in Florida cannot come close to doing. So, when you see an article, chart, or graph that makes generalizations and lumps all of North Shore, South Shore or the entire Lake Tahoe area together as one real estate market just turn the page, unless you like reading fiction.

Don Kanare is the founder and Sabrina Belleci is the owner / broker of RE/MAX North Lake.

Real estate: Property rights and responsibilities

With every right goes a responsibility and that’s as true for property owners as it is for every citizen who values their freedom and liberty.

The Constitution and Bill of Rights are beautiful things, but the First Amendment does not give you the right to shout “fire” in a crowded theater (although you can yell “theater” in a crowded fire). The same goes for property owners whether it’s your primary residence, vacation home or an investment property of some type.

Property owners have many responsibilities and one of the top priorities is paying the annual property taxes. You may have the right to own and occupy the land but there is almost certainly some type of property tax that will have to be paid each year. These property taxes are used by municipalities, school districts, fire protection districts and other entities to provide for the common good.

This is not socialism on a grand scale but rather civilized society acting in a manner to function efficiently and effectively for the benefit of all citizens. We’ll talk more about the common good later in this column.

Other responsibilities include maintaining the physical structure and essential systems such as electrical, heating and plumbing. There is also the need to do landscaping, defensible space, BMPs, and following local rules and various types of CC&Rs.

Many cities and towns have ordinances that are very specific. So, while you have very broad property rights there are generally responsibilities you will need to fulfill that are required to meet community standards.

You can’t buy a piece of land in Incline Village and set up a tent or park an RV and call it your home. You either have to keep the land undeveloped or build a conforming structure within the allotted time for permits that have been granted.

Landlords have responsibilities to their tenants some of which fall under what is known as the implied warranty of habitability. These include drinkable water and hot water, heat during cold weather, working electricity and a bathroom and toilet.

There are other requirements related to health and safety issues and building codes that need to be adhered to. Tenants generally have the right to “quiet enjoyment” of the property and landlords unilaterally cannot enter the premises without 24-hour advance notice unless there is some type of emergency. Rights and responsibilities have to be balanced otherwise there is potential for chaos and anarchy (not to mention serious health and safety issues).

The onset of the COVID-19 pandemic has forced agents, buyers and sellers to take on new responsibilities in an effort to control the spread of the virus.

While you are free to sell your property at any time you are no longer free to sit in the living room while your place is being shown to a prospective buyer. Also, properties that are occupied by tenants cannot be shown at all in Nevada.

Agents and their clients must wear masks, sanitize their hands (wearing rubber gloves is a good idea), maintain social distancing and adhere to other guidelines. If everyone did what needs to be done to squash the virus, America would not have 25% of the world’s cases while having only 4% of its population.

The three basic principles upon which our nation was founded in the Declaration of Independence are life, liberty and the pursuit of happiness. The preamble of the Constitution talks about providing for “the common defense” and promoting “the general welfare” which has been interpreted by the Supreme Court to mean doing things and working for the common good.

It is incumbent upon everyone during this critical time in our history to engage in responsible practices such as wearing a mask when in public places, maintaining social distancing, frequent handwashing and isolating yourself if you are ill. There is no such thing as unfettered freedom in a civilized society.

We encourage everyone to act responsibly, follow the law and current regulations for the benefit of all.

Whether we are real estate agents showing property or members of the general public entering a retail store, wearing a mask when you are near others is for the common good

Let’s all work together to crush the coronavirus and get our lives and the economy back to some semblance of normalcy.

Don Kanare is the founder and Sabrina Belleci is the Owner / Broker of RE/MAX North Lake.

Real estate: Home buyers who procrastinate will be disappointed

For many decades patience was considered a virtue when shopping for real estate at Lake Tahoe. Buyers who waited until late summer or fall to make a purchase decision were finding a lot of excellent opportunities and often a willingness among sellers to negotiate price and terms. But times have changed in 2020.

Buyers who wait around hoping to pick up a bargain in September or later in the year are going to be severely disappointed.

Houses and condos that have asking prices close to fair market value are getting a large number of showings every week as the crowds of summertime visitors pursue buying opportunities. The sense of urgency due to the coronavirus pandemic sometimes feels like we have returned to the feeding frenzy of the real estate boom in the 1st decade of the century. Prices are still moving upward and buyers are out in full force. With inventory levels at historical lows, buyers need to be nimble and willing to pull the trigger when they find a place they like.

The strategy of waiting until after the summer crowds depart and then trying to negotiate a great deal between September and December is a losing proposition this year. Buyers who procrastinate will find that the property they hope to pick up at a bargain price after summertime will likely no longer be available.

Some sellers are sticking to their guns and refusing to budge very much off the asking price. And we are seeing many multiple offer situations.

If you have been shopping for real estate at Lake Tahoe, returning in the fall to write an offer on your favorite property will probably result in disappointment. There is so much pent up demand among buyers fleeing urban areas that it is unlikely the property you are holding out for will still be available when the Aspen trees start changing color. While we will continue to see a fair number of new listings arriving on the market between now and the end of August, buyers should not expect a wide variety of new properties to be put up for sale after Labor Day. As we approach later summer and autumn, there will be fewer new listings to choose from and the current inventory will have likely eroded to a lower level than where it sits now.

The most successful buying strategy in 2020 is to be decisive and not procrastinate if you are seriously interested in purchasing a particular property. Your agent can provide you with comparable sales information and guide you through the negotiation process to help you strike the best deal.

Each community at Lake Tahoe has its own customs, rules, regulations and nuances. So, working with an experienced local agent is critical to getting good representation and having a smooth transaction.

If you’ve been searching for a property at Lake Tahoe, the summer of 2020 will reward the buyers who are decisive and not the procrastinators.

Don Kanare is the founder and Sabrina Belleci is the Owner / Broker of RE/MAX North Lake.

Real estate: A wild first half

It has been a lot like Mr. Toad’s Wild Ride for the citizens of planet Earth during the first six months of 2020 and the Incline Village real estate market is no exception.

We started out in a plateau as it appeared that the current market cycle had matured. Then the coronavirus pandemic hit and there was a brief market freeze. After only a couple of weeks that was followed by an uptick in demand that has turned into what can only be described in late June as panic buying.

This is not to be confused with panic buying that occurs in stock markets, tulips or other types of speculative investments. Rather this is a result of pent up demand from people who were sooner or later going to leave dense urban areas and move to the relative calm and safety of the mountains. Instead of this paradigm shift taking place over a period of years it is being compressed into several months.

There are a couple of statistics that help to tell the story. For the first time in the history of the Incline Village real estate market there are more properties in escrow than properties for sale. Currently there are 116 properties under contract but only 100 properties listed for sale on the Incline Village MLS.

Even during the real estate boom prior to the Great Recession, we never came close to this type of ratio. But the extraordinary level of sales activity in May and June combined with historically low inventory levels has resulted in this unusual scenario.

There are currently 57 single-family homes listed for sale and only five of them carry price tags under $1 million. The median sale price of houses in 2020 is $1.5 million. However, that is likely to go up as the floor under prices continues to rise.

Of the 61 houses currently in escrow, 23 of them have price tags above $2 million. Normally we would expect to see about 25% of sales above the $2 million price target. But as both demand and prices continue to trend up for luxury homes, this segment of the market now comprises more than one third of all single-family residential sales.

The overall price range of houses under contract spans the gamut from $640,000 all the way up to nearly $10 million which means demand is strong across all sectors.

Condo inventory is near record lows with only 29 properties in this category currently for sale. There are 40 condos in escrow with several new listings in the highly desirable Third Creek complex. We had seen the inventory in this complex evaporate completely many times during the past few years.

The recent increase in demand combined with the traditional summer selling season has tempted several owners in Third Creek to list their properties recently. With a variety of different floor plans and square footage available, there is a brief window of opportunity for buyers looking for a place in Third Creek to check out the available properties.

It looks like it’s going to be a busy summer season for real estate all-around Lake Tahoe. The combination of seasonal visitors plus pandemic driven buyers looking to relocate from dense urban areas will continue to impact sales. It appears that prices will continue to trend upward as demand remains strong. Instead of the final phase of a mature real estate cycle (which is how things looked at the start of 2020), we are entering what appears to be the beginning of the next leg upward.

Don Kanare is the founder and Sabrina Belleci is the Owner / Broker of RE/MAX North Lake.

Real estate: Summer sales heating up

As we approach the peak of the summer real estate selling season sales activity for houses, condos and freestanding condos continues at a solid pace with 21 properties in Incline Village and Crystal Bay going into escrow during the past week.

Every price range got in on the action with properties getting accepted offers ranging from $429,000 up to $6.5 million.

Sales of single-family homes were exceptionally strong with 14 properties going into escrow. After a modest start to the year this category has made a nice comeback. We do not have a lot of inventory at the present time and that could put a damper on overall unit sales in 2020.

As of this writing there are 83 houses, condos and freestanding condos in escrow. That is a very healthy number at the start of summertime. It is also an indication that real estate sales on the Nevada side of North Lake Tahoe are continuing to move along nicely.

This is the time of year when we see new listings almost every day which provides us with a typical uptrend in the inventory levels of properties for sale.

The inventory tends to peak sometime between late July and late August as property owners make the decision whether or not to list their property for sale during the busiest time of year.

However, the inventory actually declined this past week with only nine new listings hitting the market.

Based on conversations we are having with other agents and brokers, it appears that showing activity remains relatively strong across all price ranges.

Freestanding condos have become very attractive to vacation home buyers in recent years as they combine the best attributes of a single family home and a condo. You get your own four walls and have more privacy than you would in a normal attached condominium.

The Homeowners Association will generally take care of landscaping, snow removal and sometimes even exterior maintenance thereby providing the convenience of condo living. But that is not always the case.

Buyers need to perform their due diligence carefully when contemplating the purchase of a freestanding condo because every Homeowners Association is different and you need to verify exactly what the monthly dues will cover.

Gazing into our crystal ball we see sales and prices of condos continuing in a slow, steady uptrend for the remainder of 2020. Lakeview and panoramic lakeview single-family homes are very much in demand and we see nothing that will alter that.

Properties that provide a sense of privacy are much sought after and buyers are willing to pay premium for a place in a good location that is shielded from the neighbors.

Overall, it looks like the summer of 2020 will be a busy one and buyers will need to move quickly when they find a property they like or risk missing out.

Don Kanare is the founder and Sabrina Belleci is the owner and broker of RE/MAX North Lake in Incline Village.