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May U.S. Existing Home Sales Fall… what about South Lake Tahoe Housing Demand?

June 23rd, 2010 categories: Lake Tahoe Real Estate, Major Market Reports, National real estate news, Sales Reports, South Lake Tahoe Statistics, South Lake Tahoe, CA

Housing markets always go up and down.

National Housing Demand is often Different than that of South Lake Tahoe.

The New York Times article says U.S. sales of existing homes fell in May by 1.6% (here). This comes from the National Association of Realtors, which cites mortgage delay as one of the key reasons for the decline. Said decline compares April 2010 sales to those of May.

Contained in the report, though, the NAR states that May demand represents a 19% increase from the same month last year.

Also in the report, Lawrence Yun, chief NAR economist says this 19% increase was driven by a federal tax credit that applied only to home buyers who close before the end of June, making it unlikely that the performance would be sustained.

Another reason for the May decline has to do with uncertainty over the federal flood insurance program, and that some 35% of Louisiana and Florida homes were required by lenders to have flood insurance. The NAR further states the possibility that the oil spill in the Gulf of Mexico will impact home sales in these two states.

What about US Prices?
The article also mentions overall U.S. home values. Stuart Hoffman, a senior economist at PNC, said it was “a little disappointing that sales didn’t rise in May” from April. But he noted that home prices were 2.7 percent higher than a year ago, “so that does show there is definitely some stability in home prices.”

The national median existing home price for all housing types was $179,600 in May.

What about South Lake Tahoe?
As is often the case, real estate trends are different in South Lake Tahoe than they are nationally. In particular our home sales are not as affected by the home buyer tax credit, which has to do with most of our buyers are over qualified financially, a key characteristic of the second home resort buyer.

There are few first-time home buyers here, though many of these have affected national home sales increases by taking advantage of the first-time home buyer tax credit. South Lake Tahoe resort home sales are also not impacted by flood insurance issues, nor the oil spill in the Gulf of Mexico (though it does affect our heart).

Lets compare: (see charts below)

May Home Sales: (compared to April, 2010)

National: decline of 1.6%
South Lake Tahoe, CA: 1 sale less (from 43 to 42), or a decline of .23%
Stateline, NV: 2 sales less (from 7 to 5), or a decline of 28%

May Home Sales: (compared to May, 2009)

National: increase of 19%
South Lake Tahoe, CA: an increase of 55% (27 sales in May. 2009 and 42 home sales this year)
Stateline, NV: No change (5 sales in May, 2009 and the same this year)

Home Prices: (compared to May, 2009)

National: increase of 2.7%
South Lake Tahoe, CA: a decrease of .32% (May 2009 median was $325,000 compared to $314,500 at the end of April. It is $306,500 now. )
Stateline, NV: a decrease of .45% (May 2009 median was $510,000 compared to $487,000 now.)

(Note: the South Lake Tahoe, CA number above does not include the Tahoe Keys. The Stateline, NV number above does include Glenbrook and Lakefront Properties.)

The chart below contains all Stateline, NV single family home sales by month since 2003.

Stateline, NV home sales by month since 2003.