Area home prices rise, but sales dropping | SierraSun.com

Area home prices rise, but sales dropping

David Bunker

Homes are selling for higher prices than ever in the area, but fewer and fewer are changing hands this year, according to a recent market report by Intero Real Estate Services.Over the last year, the median price of a single family home in the Truckee-North Tahoe area reached $701,000, an increase of just more than 20 percent. But the median price of condominiums and townhomes fell $28,500 to $459,000, according to the Intero report that evaluated Truckee and North Lake Tahoe. Sales volume in the area dropped throughout 2005, and is down 18 percent when compared to 2004, the report said. The slowdown in sales may foreshadow a leveling off of real estate prices, but not a dip, said Vanessa Loftus, marketing director for Intero Real Estate Service.”I don’t think that prices can continue like this, there is no possible way,” said Loftus of the steep increases of the last couple of years. “But I don’t see prices dropping.”The market is loaded with inventory right now, said Intero Real Estate broker associate Matt Hanson, and if the amount of properties on the market doesn’t dwindle, as it typically does in the winter, the market may level off.”If there is plenty of inventory going into the spring, we may have a flat season,” Hanson said.Having risen so high, the local real estate market is now suffering from its own successes a little bit, Hanson said. At $701,000, most locals are completely cut out of the market.”The price of homes has got to a point where we have lost a lot of people in the market because they cannot afford to buy,” he said.A market that earlier had a healthy mix of sales to full-time residents and to second home buyers, is now more of a one-dimensional market almost completely dedicated to vacation home buyers, Hanson said. “I think that we’ve steadily shifted to see more and more out-of-town buyers,” he said. Hanson said he still sells some homes to full-time residents, but those people are often moving in to live in the area from somewhere else.Despite some signs of the housing market leveling off, Hanson attributes the sluggish sales volume in 2005 to a long lasting winter that slowed spring and early summer sales. Even the California Association of Realtors has issued an estimate that homes will continue to gain value at an 8 to 12 percent clip in 2006. The mechanism that will keep prices from dropping very far is California’s population growth, which continues to outstrip pace of home building in the state, Loftus said.”The natural rate of population increase is not being matched by home building,” she said.Intero also points to a cyclical nature of home sales, governed by the seasons in Truckee, as a reason for slowing sales.”Typically people start to panic at the end of September, because they know winter is coming,” said Loftus. “That is a very popular time in general for a drop in prices.”