Archives for April 2020

Late April 2020 Lakefront Update

April 17, 2020: How’s the Lakefront Market?

 

Relatively, this winter had been quiet although there were two solid sales: $7.1m and $7.6m. There was a very low price on a Meeks Bay lakefront which sold in 5 days: click here to see MLS listing;  Click here to see my casual video walk through. This property entered escrow on 3/13 which was the Friday that CA announced statewide school closures. As you can see on my Tahoe-Truckee Market Update page, this date was a turning point in our market. I have a ton of info on the market since then here: click here.

 

Current inventory is very low and is getting quite long in the tooth – average time on market for these active listings is 191 days – ouch. I must say, however, some are quite cool. The Lakeside Drive house for $3.5m is has a great feel but no garage – here is my casual video walk through of it.

 

6 total lakefront listings: 5 are under $5.3m and a Flick Point property is being offered for $8.75m; a prime West Shore property with southerly exposure (rare) on 4.5 acres entered escrow before hitting the open market: list price $19.5m.

Where are we headed?

 

We are likely headed to the standstill that is being witnessed in The Bay. But our market lags behind SF’s and so too, it seems, do our social practices. Our school closures and SIP came a week after SF’s and so maybe our real estate market still has some life in it right now for the same reasons.

 

Maybe this is wishful thinking but in the near term I see some activity at the higher price bands. High-end buyers have levels of financial sophistication, diversity, reserves – and patience – to endure a drawn out Covid situation and their desire for a “Tahoe place” gets strengthened in these times. While showings are somewhat challenging, real estate has been ruled an essential service so showings are permitted – we just need to be smart in how we handle them. Again, please see this page for LOTS more info on the market since 3/13.

 

High-end examples: These two properties at $4m and $6m were in escrow before coronovirus hit CA. They removed all contingencies on 3/20 and 3/23 which are two of the worst stock market dates on record: click here. Another example is my $4,375,000 non-lakefrone sale mentioned above. Note: Buyers are needed to drive markets so here is some info on on high-net worth individuals’ and their asset allocation.

 

Who are the high-end buyers?

 

The average age for a Tahoe lakefront buyer is in the mid-50’s. This is the very beginning of Gen X. Based on a 2018 high-net worth study by U.S. Trust, the private banking arm of BofA, Gen X holds about 54% of their wealth in stocks, 16% in bonds, 16% in cash, the rest in alternatives. My financial advisor estimates that he is seeing a 5-10% reduction in portfolios of his higher-net worth clients due to March ‘20 events. Obviously our market activity is significantly diminished but there will be some high net-worth families who still decide to drop in on a nice Tahoe home if there are listings which they are able see.

Where is the fallout?

Stay tuned. It’s too early to say for Tahoe real estate. This article in Curbed (click here) says that things are all but stopping in SF. Since our market follows the City’s, we are likely headed in the same direction. Keep an eye on this page which I will update moving forward.

 

Interesting Notes on 2019

Last winter was noted as a special one when two adjacent lakefronts sold on one of the West Shore’s finest streets, Sunnyside Lane. Of course, these were the Mark Zuckerberg purchases of $22m and $37m. These two purchases were part of a historical run of transactions over $20m. There have been just 8 sales of this magnitude in the last 15 years – 5 of them occurred between April ’18 and Jan ’19 – wow! See more on that in my Spring 2019 update here.

 

Some interesting points to consider vis a vis the 2019 lakefront market. Yes, the notable Zuckerberg sale happened but then the lakefront market sputtered and came in 50% lower than 2018. Average sold price was higher than it’s been in a decade. But, there were 9 unsuccessful, aka expired, listings totalling $52m in volume. This means that some sellers were overly optimistic about the market and buyers weren’t having it.

 

My Incline Village team (Donovan Group) and I represent the highest-level brand new construction in the entire Lake. These are two adjacent listings at $24,000,000 and $22,000,000 in Crystal Bay. Click here to see 20 Crystal DriveClick here for 24 Crystal Drive. We have pulled them from MLS until 20 Crystal is completed this Spring. Currently, the highest Tahoe lakefront price is Chase International’s listing. I was involved in the listing presentation and am a Listing Ambassador for Crystal Pointe, $75,000,000

 

Quick Stats

  • 6 active lakefront listings from $2.6m to a very cool location on Flick Point for $8.75m.
  • 2019 volume and nuber of transactions were both down 50% from 2018. Note that 2018 volumen was almost double 2017.
  • 1 lakefront in escrow
  • Keep an eye on Homewood – we will see if the Gold Rush pricing attempted by numerous unsuccessful sellers in ’19 will carry over or not.

 

Year Over Year Stats

Year Total Volume # Homes Sold Days on Market Ave Price Median Price
2019 $106m 14 149 $8.2m $4.6m
2018 $218m 28 155 $7.8m $4.4m
2017* $124m 27 145 $4.9m $3.8m
2016* $121m 21 182 $5.9m $4.8m
2015* $145m 26 170 $5.6m $4.2m
2014 $121m 30 163 $4m $3.1m
2013* $96m 23 203 $4m $3.5m
2012 $150m 32 338 $4.6m $3.2m

2017: 2*Off-MLS sales:

2016: 3

2015 and 2013: 1

Lake Level

I love keeping an eye on the Lake level. Our seasonal real estate sales activity typically mirrors that of the lake level.

The way to read this chart is to add the ‘gage height’ to elevation 6220′. The legal limit for Tahoe is 6229′. 

See all lakefronts for sale here

See Current TRPA Shoreline Plan Draft here

PDF to TRPA Shoreline Plan Executive Summary May 2018

See TRPA Shoreline Map here: This shows all Lakefront parcels and piers around the entire Lake

See Current Lake Tahoe Planning Benchmarks here

Click here for last Spring’s Lakefront Market Update

 

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Tahoe-Truckee Real Estate Update 4/4/2020

How’s the Tahoe-Truckee Market?

 

The goal of this page is to give market updates for those who want to stay informed. I have made the decision to not encourage travel from the Bay Area, etc. to Tahoe and am therefore not showing property to buyers nor meeting in-person with sellers. I am actively working every day via phone, virtual meetings, email, text, etc.

 

Updated April 4, 2020:

 

Summary since 3/26:

There are more properties exiting the market than there are entering the market; the numbers were equal two weeks prior. The number of cancelled escrows remains about the same with 7-8/week. The dynamic of higher-end listings having more confidence and re-entering the market was different. The two $1m+ listings that fell out of escrow decided to throw in the towel for now. The number of new escrows is similar to the prior 2 weeks with roughly 7 new deals per week. See full details and more info by clicking here.

 

The Details

 

New Listings: I am pretty amazed. There are 20 new listings since my last update on 3/26. Average price $1.2m, high of $8.5m. The $1m+ listings were spread out across our geographic area very evenly. The $8.5m is notable in that it is a non-lakefront home with manicured acreage and multiple pools located across the street from Zuckerberg’s big purchases. I would be very surprised if didn’t buy this as an amenity and for overflow – assuming he has large groups of visitors during non-covid times.

 

Expired Listings: 25 expired listings including two high end West Shore properties. In Tahoe, 100-day listings are very short and rare; 14 of these expireds had under 100 days on market which means they likely cancelled early due to coronavirus.

 

New escrows: There were a total of 7 new escrows since 3/26. Average price $1.1m, high of $2.8m on a beautiful home in Northstar. Interestingly, the Northstar house fell out of escrow on 3/17 due to a spooked buyer. It then re-entered escrow on 4/1. Unlike the new listings, activity was centered in Truckee. The only non-Truckee escrow is an investment property in Kings Beach for $450k.

 

Solds: As we get further from the Shelter In Place order (3/19), the solds are becoming more interesting for two related reasons. These buyers have the financial confidence, cash reserves and very strong desire to acquire that “Tahoe place.” Secondly, since these are typically vacation homes, most of these buyers are ignoring the Shelter In Place order and coming to Tahoe-Truckee to look at homes. Locals are reporting seeing full parking lots at Safeway on Friday afternoon which is very, very frustrating. For this weekend, CHP has issued a ‘No Travel to Tahoe’ warning: click here to watch video.

 

22 closed escrows since 3/26: Average price $923k, 3 sales over $2m. The escrows were spread out across our region but the highest concentration was Tahoe Donner with 4 sales.

 

Are all the escrows falling apart?

Date range 3/26 4/4
Total Failed Escrows 7  
     
Fell out of escrow then back to market as active: Tahoe Basin Truckee
  2 2
  Under $1m Over $1m
  4 0
     
Fell out of escrow then cancelled: Tahoe Basin Truckee
  0 3
  Under $1m Over $1m
  1 2

Dynamics are changing a little. Last update, there were 17 cancellations over the previous 13 days and just 8 cancellations in the last 9 days. Previously the sellers over $1m were showing lots of confidence and re-entering the market after their deals fell apart. This week both escrows over $1m did the opposite and exited the market.

 

Helping Others

Our family is a huge fan of the Kings Beach Boys & Girls Club. We love the “grab and go” dinners and educational services they are providing since the covid outbreak. They’ve served over 400 dinners in the last couple weeks to local families in need. We donated and you can, too, at this link

 

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