North Lake Tahoe Lakefront Real Estate Market Update Q4 2010

The North Lake Tahoe Lakefront market has been very active in 2010 and as of 10/29/2010 we have had 17 Lakefront Sales and currently there are 5 Lakefronts in escrow!  It is very realistic that 2010 will see over 22 Lakefront sales and that is if there are no other escrows opened in the next 2 months which is highly unlikely.  North Lake Tahoe hasn’t seen this level of Lakefront activity since 2005 and we are on pace to outdo those numbers.

In 2009 there were 11 Lakefront sales which the market has already eclipsed this year and there is a strong possibility that the sales volume will more than double the 2009 numbers.  It appears that the North Lake Tahoe luxury real estate market has reached a point where buyers feel comfortable with the current pricing which is resulting in higher sales volume.  Buyers that are shopping for Tahoe Lakefronts see pricing that is down 20-30% from the peak of the market (2006) which has created a level of comfort amongst these savvy buyers.  The overall Lakefront inventory is still very high, currently we have a +/- 2 year inventory of Lakefronts which is a bit concerning, but buyers are using this to their advantage and creating amazing opportunities.  

 

With a multi-year inventory of Lakefront real estate, buyers have a choice and are not limited to a few homes in a given price point.  Instead, buyers are able to choose amongst locations from the Gold Coast of the Rubicon to the gated community of Brockway Springs which is very exciting because in the past, price would dramatically limit a given buyer to a specific area of the lake.

View Tahoe Lakefront Homes by Price:

The strongest segments of the Tahoe Lakefront market are estate quality properties, parcels that are set back from the highway, and deep water properties.  Inversely we are seeing weakness in the market when Lakefront properties are located close to the highway, shallow water properties, or when there is a lack of uniqueness with a given home.  Lakefronts that do not have private piers or limited lakefront amenities are seeing higher levels of price reductions and have significantly longer marketing times.  Like I said earlier, buyers have a choice and they are choosing the best lakefront properties available with the best pricing.

I have created the chart below to show you a 5 year historical analysis of the North Lake Tahoe Lakefront market.  From this data you can see that sales volume (Purple Line) has been sliding since 2005 but has been on a slight increase since 2008.  Based on the current closed sales and the current level of pending sales it appears that we are about to see a spike in sales volume which will most likely result in a spike in Average and Median pricing. 

When you look at the Average price (Grey Line) you will notice a spike in 2008 which is mostly due to a record sale of a fabulous West Shore property which sold for $20M. If you were to remove this record sale the average price for 2008 would have been $4.9M which would have been seen as a slight dip in the timeline.  Overall the average price has been tracking in a fairly stable range but the overall volume has suffered since the height of the market in 2006. 

The Median price (Maroon Line) has been tracking in a fairly stable range with a dip starting in 2008.  Although the Median price may increase slightly over the remainder of the year it will most likely still fall short of the 2009 numbers.  The lower median price is partially due to the fact that in 2010 we have seen a higher level of entry level/tear down Lakefront sales then in previous years.

Lakefronts are very unique properties and no two are alike.  Factors that can effect pricing are lot size, topography, proximity to the highway, piers/buoys, lake frontage, as well as the overall quality of construction and size of the residence.  In any given year we can have an outlying sale that skews the data so it takes a trained eye to review sales and come to conclusions about where the Lakefront market is and where its going.  My numerous years of appraisal practice and business background help me to draw educated conclusions about the Tahoe Lakefront market and I am more than happy to discuss my findings or any other segment of the Tahoe/Truckee real estate market with you.

Best regards, Dave

David Westall, Realtor

Tahoe Riverfront Realty, Inc.

530-448-9882

DRE# 01796995