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South Lake Tahoe, CA Market Statistics

Stateline, NV Market Statistics

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Welcome Back 2003 South Lake Tahoe Home Prices

August 24th, 2009 categories: For Buyers, For Sellers, Lake Tahoe Real Estate, Major Market Reports, Market Performance Updates, Median Sold Price Report, South Lake Tahoe Statistics, South Lake Tahoe, CA

19.2% decline in Median Sold Price this year.

Simply put, the median sold price for single family home sales in South Lake Tahoe, CA has declined 19.2% this year. It is off 35% since the 2006 market high.

This is based on the median sold price for all home sales in the last 180 days, which is now $315,000 compared to the median sold price of $390,000 in 2008. This number excludes Tahoe Keys home sales which can skew market numbers upward by as much as 5% or more. (see chart below)

Chart of South Lake Tahoe, CA Median Sold Prices by year since 2000 here.

Chart of South Lake Tahoe, CA Median Sold Prices by quarter since since 2007 here.

Why did this decline happen?
First lets again understand what median sold price is, which is the exact middle of all sales.
Stateline, NV median sold price review

The chart above is a great example of median sold price and what we mean by the exact middle of all sales:.

Note that column one reflects 8 sales, two sales each of $200K, $400K, $600K and $800K. Here the median sold price is $500K.
Note that column two also reflects 8 sales, three sales of $200K, three sales of $400K, and one sale of $600K and $800K each. Here the median sold price is $400K.
Note that column three again reflects 8 sales, one sale at $200K, one at $400K, and three sales of $600K and $800K each. Here the median sold price is $600K.

South Lake Tahoe Home Sales by Price Range:
The chart on the right indicates the number of South Lake Tahoe, CA home sales by price range in 2008 compared to those of 2007. It also addresses how “what has sold” affects the median sold price.

Lets look at the market entry segment of the South Lake Tahoe market first. Note there is little difference in sales from $100,000 to $400,000 in 2008 compared to 2007, but there is a significant difference this year.

Note the differences in the number of sales in the $100,000′s and $200,000′s. Here we are 7.6 months into 2009, yet we already have significantly more sales in these ranges that the last 2 years.

Also note the differences in sales from $1M and above. These are our “high-end” sales. There were 14 in 2008, compared to 36 of them in 2007. So far this year, there are only 4.

Here are two more charts that reflect market entry and high end sales activity in South Lake Tahoe, CA since 2003.

South Lake Tahoe, CA market entry home sales since 2003.

The chart above indicates the number of market entry sales in South Lake Tahoe, CA since 2003.

South Lake Tahoe, CA high end home sales since 2003.

The chart above indicates the number of high end sales in South Lake Tahoe, CA since 2003.

What these 4 charts above reveals is similar to most real estate markets, and it is particularly true here in a resort market like South Lake Tahoe. Home prices vary considerably and there is often a great range of value from market entry homes to the top of a market,

There are always home sales thoroughout the entire market spectrum in every market. Here in South Lake Tahoe, CA we have a market that ranges in sales from $135,000 to $2,850,000 this year.

Far better than usiing the “average sold price”, which are far more heavily influenced by sales at either end of the market, it is precisely this wide variance of home values where the median sold price effectively cuts through being overly skewed by either excessive low-end or high-end sales to give us, and therefor you, the best possible indication of current market trends and conditions.

A Few Contributing Factors:
There are a number of forces that have caused our current decline in home values this year. The differences in the abundance of market entry sales vs the lack of high-end sales as discussed above is just one.

REO’s and Short Sales:
One of the reasons there is so much market activity below $500K is because of the abundance of undervalued short sales and bank owned (REO) properties on the market. Some 36.9% of 2009 South Lake Tahoe, CA home sales have been either REO or short sales. This is about twice as many distressed sales as there were in 2008, where 20% of all sales as distressed properties.

It is important to understand that market forces for distressed properties are different than homes that are not. The median sold for all 2009 sales of homes that are distressed properties is $284,000, where as the median sold price for all 2009 home sales that are not distressed properties is $380,000.

Another way of looking at this is there is about a $100,000 difference in the value of a distressed property and one that is not. In fact, sales of distressed properties has a 15.8% negative pull on the South Lake Tahoe, CA median sold price.

A Decline in High-End Demand:
A number of forces have lead to fewer high end sales than normal in South Lake Tahoe, CA this year. This is evident far more so in the upper middle and high end market sectors.

The first has to do with the availability of jumbo loans, and an increase in jumbo loan interest rates.
A jumbo loan is any home mortgage loan in excess of $417,000.
Jumbo loans also have more rigid loan qualification standards than loans under $417,000.

Perhaps even more contributive to a decline in both the median sold price, and high-end sales in particular is buyer perception:

Ok, lets call it fear, and the national credit crisis thoroughout the year, which was certainly intensified by the collapse of Lehman Brothers on September 12th and financial events thereafter, has been responsible for that.

The Bottom Line, and a final question about South Lake Tahoe, CA home values:
In summary, we have experienced a 19% decline in our median sold price this year: A number of reasons have contributed to this decline; foreclosures and lack of high-end demand are the principal culprits.

Recently however, we have seen an upsurge in demand on both sides of the stateline here in South Lake Tahoe. A recent flurry of national real estate news suggests that both the US Economy and the housing market are doing better, however.

Are we back to 2003 home values? A look at the chart below indicates, and this has to apply to some cases, but not all cases, that we certainly are more closely aligned with 20033 home values than any other year hence.

The final two charts indicate South Lake Tahoe, CA median sold prices since 2000, and South Lake Tahoe, CA median sold prices by quarter since we we started posting this information on our blog here.

South Lake Tahoe, CA median sold prices since 2000.

The chart above indicates South Lake Tahoe, CA median sold prices since 2000. (back to top)

Note the differences in the median sold price when homes in the Tahoe Keys are included. (Keys homes skew numbers upward by as much as 6% or more.)
Also note the percent changes in the median sold price each year.
The column on the far right indicates how much prices have increased by year.
For example, if one purchased a home in 2001, and sold it today, it is a good bet that one would make a profit of about 65% on that investment.

South Lake Tahoe, CA median sold prices as posted on the lake tahoe real estate blog.

The chart above indicates the median sold prices in South Lake Tahoe, CA since we first started posting statistical information on this blog.

Note the column for sales in the last 180 days.
Because it takes about a half year on average to sell a home in South Lake Tahoe, CA, this is the number that more represents current market condition than any other.