As we enter the new year and decade I’d like to give you a sense of where we are in the real estate world here in South Shore Lake Tahoe.
In tracking pricing and units sold of single family dwellings you’ll find the South Tahoe Assoc. of Realtors (STAR) sales data attached as well as a link to the Ca. Assoc. of Realtors (CAR) 2010 /2011 housing forecast for your attention.
http://www.car.org/tools/smart/archive/forecast/?version=2
The So. Lake Tahoe CA market has seen a stabilization of median prices over the past 12 months rounding in the end of the year at $319K.
This is particularly refreshing after many months of reported declines in pricing since 2007, additionally the number sf residences sold have continued to increase since mid-2008 from 374 homes in 2008 to 546 in 2010, a 30% increase over that period of time with a 14% increase year over year.
Unlike SLT when comparing the CAR sales data for the state of CA, we see median home prices on track for the forecasted 11.5% increase in 2010 and sales totals projected to be down by about 10%. National Assoc. of Realtors is still forecasting adjustments in markets but with a general stabilization of median home price in most of the markets and sales trending upwards.
What we are seeing is a corollary between price and sales; when prices go down sales go up…all things being equal (which never is of course). What we also are seeing that has consistently contributed to the increase in sales is the historically low fixed interest rates, hovering around 5% at this time.
Given the analysis of the historical data of NAR, CAR and STAR I’m forecasting for the 2011 SLT Real estate market a continuated stabilizing of the RE market with sales hovering at 600 sf homes and median home price possibly climbing slightly to $335,000 (5%) increase in price and sales
(approx.)
Contributing factors to this forecast is the data drawn from the CA market leading the bubble up and now out, having observed that the CA (and NV for that matter) market fell faster than the national market and in some sense the recovery, while cruel, is coming faster too (both state budget issues aside).
Other factors considered are the US and CA Economic outlooks which are forecasting stabilization in gdp, unemployment, disposable income, population growth and CPI. “Stable is good” after this wild ride.
Another important factor is the keep an eye on is “new homes starts vs.
inventory and housing needs. This will be converging on us soon (2012 per NAR’s Chief economist Lawrence Yun) as the demand for housing is unmet due to the slowdown of new housing starts, hard to believe after the lessons of overbuilding have hit us so hard. Lake Tahoe of course is an anomaly when the new starts stats come into play due to our “controlled housing starts market place”. There is talk that 2011 will not see the usual “limited” round of new building allocations due to the quagmire of the TRPA basin master plan. Remember supply and demand factors into our market place with this bit of news.
And the last bit of analysis for your attention is the current “absorption rate” we’re experiencing here in SLT which is hovering around
6.3 months at this time.
The absorption rate is the anticipated length of time it will take to absorb the unsold inventory of homes into a given market.
4-6 months inventory is considered to be a normal balanced market between buyers and sellers, fewer months is sellers’ market and more months are a buyers’ market. That said we’re in a normal market range, thankfully.
Buyers and sellers are able to negotiate sales with a civil tone and come to a mutually beneficial and agreeable price, although I must say it still feels a bit like a buyers’ market, probably because it has been for at least 30 months.
Consumer confidence will increase as these consistent numbers start to surface, we’ll emerge from our caves as our animal spirits start to create, re-invent and spend accordingly. Jobs will follow the cycle of prosperity and growth will emerge.
