As the largest Alpine lake in North America, Lake Tahoe’s deep blue waters draw in buyers and visitors all year round. From mountain skiing in the winter to water recreation in the summer, it is the ultimate vacation destination. The prices and appreciation rates of properties along its 75 miles of shoreline are some of the highest across the country. Keep these six insights and predictions in mind as a buyer or seller entering the real estate market in Lake Tahoe.
1. Current market conditions are strong
Tahoe real estate trends lean in sellers’ favor with increasing median prices and high buyer demand. The median home price of South Tahoe properties is $715K, a 1.3% increase compared to last year. South Tahoe is experiencing a normalizing market which opens up more negotiations between buyers and sellers. Inventory levels in the area are depleted from winter demand but still remain at a reasonable level for spring buyers.
South Lake Tahoe also has some of the highest appreciation rates in the nation. In the past decade homes have appreciated 148.71%, which puts it in the top 10% across the country. Specific neighborhoods like Lakeview Terrace, Lakeview Tahoe, and Bijou Pines have especially high appreciation rates which make for a valuable long-term investment.
The luxury real estate along North and West Shore Tahoe tells a similar story. The median price of homes in the area reached a historic high as 24% of homes sold above $2 million. Median prices have increased for the past 11 years and have a current annual growth of 2%. Even with appreciating prices, the number of single-family home sales decreased 27% compared to the same time last year. Although Lake Tahoe is past the buying frenzy of 2021, sellers are still in a good position to list.
2. Rising population keeps inventory tight
Visitors and buyers flock to Lake Tahoe all times of the year for its outdoor recreation. Home buyers purchasing a second property that are interested in the desirable real estate continue pushing property prices higher, with some properties doubling or tripling in price. Although the area itself only has 56,000 residents, 15 million visitors each year fuel the tourist economy, putting even more pressure on housing availability and prices.
Competitive market conditions in highly desirable parts of Lake Tahoe leave buyers with little negotiation power against high prices. Buyers should keep this in mind when entering the real estate market in Lake Tahoe, especially the pricier submarkets in California. Sellers can count on continued demand virtually year-round when planning out when to list.
3. Buyers should search in April
Finding a toehold in hot markets like Lake Tahoe can be tricky for buyers. Expensive and limited real estate is a given reality of Tahoe’s market but there are times of the year better suited for a buyer’s search. Buyers looking for the lowest priced options should search in April when Lake Tahoe properties are 11.5% lower than the yearly average.
Buyers interested in higher inventory levels should search in May when there are 13.2% more homes on the market. To time a home purchase with the best mortgage rates try buying in December when 30-year mortgage rates average 0.2-0.25% less. General guidelines like these can set buyers up for success but working with a local real estate agent is the best way buyers can make an informed search.
4. Aim to sell in May
Those selling their Lake Tahoe real estate are generally in good standing no matter when they list. However, sellers wanting to make the highest profit on their property should list in February for a May sale. Tahoe homes in May sold for an average of 11.49% more than other times of the year. For a quick sale, homes listed in March and sold in June spent 21 days less on the market.
5. Difference between NV and CA Tahoe
The main discrepancy between Lake Tahoe properties in Nevada and California is price. Lake Tahoe is split across four counties: El Dorado County and Placer County in California, and Washoe County and Douglas County in Nevada. The average percent of a property’s assessed fair market value a homeowner pays in annual property taxes are:
Many homes along Lake Tahoe are situated on the flatter shores of California but come at the price of higher property taxes. Most homeowners are high income earners which also makes a large difference when buying in California or Nevada. In California, high income earners have to pay a state income tax rate totaling over 13%. In comparison, Nevada has no personal or corporate income taxes, which makes business and recreation much easier.
6. Real estate will remain highly coveted
Tahoe real estate trends indicate that properties in the area will remain popular for some time to come. Unlike other markets, Lake Tahoe benefits from two peak seasons in the summer and the winter. This sets up a special opportunity for investors with rental properties to profit from year-round vacationer demand. The surrounding area supports 15 ski resorts which offer luxury amenities to all its residents.
Like all waterfront property, limited shoreline access protects high property values from the effects of fluctuating market trends. Long term and short-term investors can expect their investment to grow whether they have it for two or twenty years. Most properties on the California side of Lake Tahoe range from three to six bedrooms with the rare five bedroom home making the most annual revenue.
Ready to buy or sell in Lake Tahoe?
The California and Nevada communities surrounding Lake Tahoe feature a competitive market with buyers eager to purchase homes nearby the deep blue waters. Understanding the local market differences across Lake Tahoe’s four counties can be tricky for buyers and sellers alike. When you’re ready to start a home transaction in the area, contact one of the experienced agents on the Hernandez Team for professional guidance.