For starters, it is back. And then some. While there are a lot of people who expected prices for Lake Tahoe homes for sale to plunge due to a global pandemic, millions on unemployment, nightly riots and an incredibly tense political climate and upcoming election, Lake Tahoe real estate is making a remarkable rebound. Expectations for housing were low, even though it is also the very industry that experts forecasted would lead us out of the recent recession. With economists calling our current housing recovery astonishing, there are a few things to know.
First, by the end of June, national median home prices were up 6.2%. Lake Tahoe real estate was up 3% for median home prices while the average was up 9%. While folks are comparing today to the Great Recession, the conditions are simply different, which is why the housing market isn’t seeing the same repeat from last time. Of course, with infection rates and unemployment still on the rise, this could change. In the meantime, American consumers are feeling more confident than ever about buying and selling.
You may have questions on why the real estate market is so hot right now. The truth is we went into this with high demand, low inventory and low mortgage rates. Add in Shelter In Place orders and our limited listing supply dwindled even more while buyer demand stayed about the same. In regard to Lake Tahoe real estate specifically, we are a second home resort market people love visiting. Being surrounded by tech driven cities that now allow for remote work has made the dream to live in Tahoe a reality for a lot of city dwellers sick of being cooped up in apartments and not able to buy due to high cost of living in major cities.
Where are all these buyers coming from with increasing unemployment claims? Simply put: There is a LOT of pent up buyer demand. A lot of folks had to put their search for Lake Tahoe homes for sale on pause while being ordered to stay at home unless for essential purposes. These are not just first time buyers or people looking to move up with the low mortgage rates like the majority before Covid-19. There is now an influx of buyers who have not been happy with the very place they have had to stay put for the past few months and has caused them to rethink what “home” means to them. People want more outdoor space, more square feet and a home office. They’ve been at home for months and are realizing that this may be our new normal for the next while and want to change their living situations. According to Realtor.com, “surprisingly, even with the worst unemployment since the Great Depression, nationally topping 11% last month, the majority of working Americans have held on to their jobs.” A majority of those forced on unemployment were considered to be workers with a household income of $40,000 or less while higher paid workers (AKA-the consumers who have the means to buy a home) were protected from being furloughed. In fact, due to having to stay put, many of the still employed Americans have actually saved money and boosted savings while holding on to their nicely paying jobs, making it easy to put money down on Lake Tahoe homes for sale.
If you feel like you got priced out of the current market or have questions about the future of our economy, or are simply hoping for a deal, you could be wondering: Could home prices eventually fall? Sure. But don’t expect a deep discount on homes for sale in Lake Tahoe anytime soon. Due to the real estate climate going into this, an excess in foreclosures and the decrease in home values isn’t expected. At least not currently. Prices could even out, or go down slightly, at some point, but prices for homes don’t just plummet “because”. There are a variety of factors and catalysts that cause that imbalance that quite frankly, just aren’t present at the moment.
For more questions about real estate, feel free to give me a call. I would be happy to help!