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 Drive. Click 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