South Lake Tahoe Real Estate: Just what in the hell happened in May ’09 Anyway?

March 8th, 2010 categories: Lake Tahoe Real Estate

The devil is in the distressed property sales details.The Foreclosure Devil appeared in full in South Lake Tahoe, that was it.

In our last article we cite a particular time, May '09, where South Lake Tahoe, CA really began to feel the effect of distressed property sales on our real estate market.

Our market was in decline prior to last May to be sure, but it was a gradual decline that spanned some three plus years.

The South Lake Tahoe, CA median sold price for 2006 was $460,000. Again, this does not include the Tahoe Keys. Were the Keys to be included that number is $475,000.

  • The median sold price declined 7.6% in 2007 (see chart below).
  • It declined another 8.2% in 2008, and…
  • It declined 21.8% in 2009, about half of which happened last May.

 A Closer Look at 2006 ?
In terms of house value, our market high was in 2006, though the decline in value started in that year as well. For the first six months of 2006, the median sold price was $475,000, which did include the Tahoe Keys.

The last six months of '06, the median sold price, also including the Keys, was $449,000. In other words, in the last half of the year of our market high, South Lake Tahoe home values declined 5.4% ($26,000).

 Mayday in May ?
It wasn't exactly the personification of the international distress signal, but last May came with a 10% decline in the South Lake Tahoe, CA median sold price. That decline was over 180-days, of course, but this is where significance was added to the opportunity of reduced property values for home buyers.

We already know that our market was in decline for the last 6 months of 2006, and from then to April, '09, the South Lake Tahoe, CA median sold price declined from $460,000 to $361,000. Over that 34-month interval, the average decline was 2.9% a month.

Prior to May, '09, the largest decline that appeared in any one month was in June, 2008, where the median sold price dropped 4.2%.

 "Pleased to meet you, I hope you guess my name!'
A lyric from "Sympathy for the Devil" aside, that name is foreclosure, the wolfsbane of real estate value woe that showed up in full, uninvited, in May of last year.

We did have foreclosure sales in South Lake Tahoe before last May, some 20% of all 2008 sales were bank owned properties, but  the median sold price in May came with more of it… and at significantly less value.

 The Details:
The charts below tell the tale, here's what they summarize:

The median sold price in May '09 came with a 34% increase in the number of distressed property sales.

  • In the 180-days of home sales before that May, there were 63 distressed properties sold.
  • In the 180-days before that, only 47 distressed properties sold.
  • In the 180-days after May '9, the number distressed properties sold was 100.

The average number of distressed sales per month changed meaningfully:

  • In the 180-days prior to May '09, the average number of distressed homes sold per month was 10.5.
  • In the 180-days before that, that same average was 7.8.
  • Since May '09, the average number of distressed homes sold per month is 17.2.

The Value of distressed homes sold changed by 15% as well:

  • In the 180-days prior to May, '09, the median sold price of distressed homes sold was $271,000.
  • 180-days before that, that same number was $320,000.

The two charts below indicate the median sold price of distressed sales in that 6 months leading up to May '09, and the six months before that.

May 09 brought about a change in the last 180 days of home sales.

It wasn't the same 6 months before that.

The chart below tracks South Lake Tahoe, CA distressed sales by month since January 1, 2008. It should be noted that the number of 2008 distressed sales is what we could find from a detailed look at every 2008 sale on the South Lake Tahoe MLS. Automatic reporting of distressed sales did not appear in earnest until 2009.

The tale of South Lake Tahoe, CA distressed sales.

 

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This entry was posted on Monday, March 8th, 2010 at 12:29 pm and is filed under Lake Tahoe Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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