Lake Tahoe: The Bay Area's New Home Base
The Race for Home Base
The Lake Tahoe real estate market is experiencing unprecedented demand. As Bay Area residence search for a new 'home base,' we are seeing second homes being converted into primary residences. Rather than visit Lake Tahoe and Truckee only on the weekend, many are moving to Lake Tahoe. Buyers are now commuting back to the Bay only once or twice a week.
Of course, many people don't have a second home at Lake Tahoe or Truckee. The race for quality of life that can only be found at Lake Tahoe means we have more buyers than sellers. We have officially entered a climate of multiple offers and a seller's market.
Low Supply - High Demand
The first half of 2020 saw a bit of slowing because of the shelter-in-place order. The second half has begun with a shortage of inventory and huge demand. The average days on market for a listing has been reduced from over 100 days to just over 30. The sales numbers over last year are also higher so dwindling supply is on a record pace.
SF Gate has been reporting on this phenomenon for the last several months. What we are seeing is a complete reversal of how Bay Area owners are using their Lake Tahoe properties. Because so many tech companies are requiring employees to work remotely, many people are staying in Lake Tahoe and commuting to the Bay Area.
Lake Tahoe's Feeder Market
The Bay Area represents more than 70% of our feeder market for home sales in Lake Tahoe. While multiple offers have been common in the Bay, it is a relatively new phenomenon for Lake Tahoe. Rental companies and builders are both reporting a surge in activity too.
As the resale inventory declines, more people are interested in lots and working with contractors to build the perfect retreat. When we compare inventory numbers from June 2019 to June 2020, the number has been halved from 817 active properties in 2019 to 408 in June of 2020. And while 127 homes sold in that same period last year, June 2020 showed 212 sold properties. Do the math - its a hot market!
It is easy to see how the reduction of inventory is going to change affordability at Lake Tahoe. Multiple offers and sales of more than asking price will drive the average sales prices higher. While April showed a reduction in inventory of 10%, by May this number was 21% and June had a 22% reduction in inventory.
Tech Companies Extend Remote Working
Many major tech companies like Google, Facebook and Apple have asked employees to work remotely, and all are extending this into the summer of 2021. As remote work proves to be more of a viable long-term solution, this growing buyer pool will quickly outpace available inventory.
When you compare the price of a home in Lake Tahoe to homes in the Bay Area, affordability is a huge factor. Price per square feet can be comparable, while in other nearby cities like Sacramento and Reno, home prices are much lower. Swapping home base is easier for Bay Area buyers than in other feeder markets.
Rental Market Strong
However, because schools are also now online, many people from these nearby towns are also exploring longer term rentals at Lake Tahoe.
The biggest factor driving so much demand in Lake Tahoe real estate is the desire for quality of life that can only be found in Lake Tahoe. If your enjoyable area has been reduced to your home and places where people are not congregating, you can’t beat a daily hike through the endless and remote forests where solitude abounds.
It's Time to Make a Move
If you are considering listing your home at Lake Tahoe, there has probably never been a greater opportunity to get the highest possible asking price. If owning a home at Lake Tahoe or Truckee was on your bucket list, you might want to jump in while affordability is still possible. The race to 'home base' is attracting quite a crowd!
I implement the safest practices when showing homes. Initially, I will send you videos and can even do a video conference while touring a property to answer your questions. When you are ready to tour, we take separate cars and practice safe measures for viewing that ensures the safety of everyone.
Contact me today for a free property analysis or to arrange a viewing. I look forward to helping you ramp up your quality of life!