Lake Tahoe Real Estate and Covid-19
In my February blog, I featured many of my favorite lakefront listings at Lake Tahoe. As the inventory has held stable in March, you may be wondering how the Covid-19 or coronavirus is affecting the real estate market at Lake Tahoe.
Technology and Virtual Transactions
When the internet and online technology was first coming onto the scene, real estate agents in North Lake Tahoe and Truckee were many of the first realtors to offer listings via websites. Most of our buyers live in the feeder markets of San Francisco, Florida, Southern California, or elsewhere. Transactions needed to be conducted virtually via online signing platforms.
Virtual tours and Docusign have allowed buyers to view and make offers for properties. This is the exact technology we are using to continue listing, showing and helping buyers through the transaction process.
Lake Tahoe and Tourism
California’s Governor, Gavin Newsom issued a ‘stay at home’ order for all of California on March 20, 2020. Additionally, the local governments surrounding Lake Tahoe are encouraging tourists to stay away. While Lake Tahoe thrives on tourism, the risk of bringing the infection to our local community was seen as a threat and protective measures were taken immediately.
While nobody can know with certainty how long this lockdown will endure, there are still many reasons to consider investing in a lakefront property. Any investor knows that the greatest rewards can be found when the risk appears to be higher.
Luxury Real Estate and Stock Market Activity
Most luxury real estate markets are directly affected by the stock market. During strong growth years, equity is transferred into the purchase of tangible assets. However, we also see that when the market trends downward, investors see the benefit of shifting their assets into real estate, gold and other less volatile holdings.
Just as the stock market has been rebounding, depending on how long this lockdown lasts, we expect a similar rebound in real estate activity. As I mentioned in last month’s blog, a slowing market is the perfect opportunity to find great buys in the lakefront market. We may see owners needing to re-allocate cash and become more motivated to sell.
The V Cycle
Many experts are predicting that the economy will move in a ‘V’ type of cycle. This is where a downturn can quickly move toward a swift upturn. While the mortgage and banking crisis of 2008 had more of a slow start, that is unlikely once more positive news emerges about the slowing of the virus. This will also occur as we hear more about the stimulus package, low interest rates and upward movement in the stock market.
As the stock market is demonstrating, the risk and reward are always tied together. In any crisis, there will be those who see it as a negative event and sell. Others will see decreasing prices as an opportunity to buy. Just as those who sell become more negotiable, those who buy can enjoy the upside potential of buying when a market is down.
Lake Tahoe Rental Properties
Investors who want to rent out their properties enjoy knowing how people from all over the world are drawn to Lake Tahoe. Currently, many vacations have been put on hold, but tourism should return to normal after the crisis is over.
The area of Lake Tahoe has always had limited supply compared to the growing demand from feeder markets. Rental prices too, have trended in a healthy upward climb. Over the decades of selling properties at Lake Tahoe, I have observed a steady growth in equity value. I am very bullish about the Lake Tahoe real estate market.
March Real Estate Activity
Mortgage rates are at all time lows. While economic activity has ground to a halt, experts agree that this is not a normal recession cycle. During March, 61 properties went into contract and one-third of them were over $2,000,000. 72 properties closed during the month of March with an average sale price of $900,000. Activity continues, although showings require the same care that comes with any area abiding by social distancing.
Like you, I am working remotely. Using online conferencing, video tours of properties and transaction management platforms, I am able to keep working with my clients. If you have every considered buying a lakefront home at Lake Tahoe, I think now may be a great opportunity.
Contact me today for a free market evaluation of your home. If you would like information on the properties offering the best value right now, let’s jump on a call.