Predicting the real estate market: As the housing frenzy slows down, the market may never be the same
The real estate market has changed drastically over the past two years — with buyers making offers far above asking price and inventories at an all time low.
As it stands, a typical home in Truckee is valued at around $1 million, according to Zillow. For long-term local workers, the question remains as to whether there will ever be a place for them in the new market.
Local real estate agents have differing opinions on the matter, as the market can often be unpredictable.
Don Carr, a local broker of 20 years with Carr Long Real Estate, said he has tried many times in his career to predict the future of the market, but has always been surprised. He said with companies becoming more and more open to remote work, he thinks the market will only continue to grow to be more expensive with the higher demand and low supply.
“There is a shortage of inventory right now, which has driven price increases recently,” he said. “That’s also spurring new construction, so people are building on what available lots there are, but there’s not much future supply being released. So it feels to me like supply will always be pretty limited and the ability to build more will be limited, but families will continue to want to be here so that’s got to cause appreciation over the next five to 10 years.”
Carr believes that as prices increase, it would be better to buy now than to wait around for prices to drop.
“Surely there will be fluctuations, but in the long view I think it will be more expensive in five to 10 years rather than less,” he said.
Tahoe Sierra MLS president and Tahoe Luxury Properties agent Amie Quirarte said that she has seen a shift in the market for the past couple of months.
“…things have started to taper off a bit … it seems that since there is some resemblance of normalcy … people’s lives to some degree have gone back to how they were before, as far as the kids being in school or people having to be back in the office and so the ability to spend as much time as you want up here is no longer really an option for everybody,” Quirarte said. “So that’s really shifted and I think that the frenzy has come and gone, so what we’re battling with now is where prices are gonna go.”
Quirarte said that in her experience the market has always been through its highs and lows, but she does not believe that there will be a crash or any dramatic dips in the market anytime soon. Her prediction is that in the next year the market will deescalate and become less competitive than it has been in the past two years.
“…I do think that we will see a decrease in property prices, which is a good thing because what was happening was not sustainable.” Quirarte said.
Both Carr and Quirarte agree that the Caldor Fire had an impact on the market, particularly during the peak smoke season. With insurance companies charging more and the risk of home damage, this could potentially cause a downtrend in the long term – although Carr believes that some have short memories and will continue to buy despite the risks and cost involved.
For those who work locally with lower incomes and are looking to purchase a home for the long term, Quirarte said that it could be advantageous to wait and ride out the winter season because there could be a potential drop in the market.
“Historically, Tahoe has been a very seasonal market, one in which there’s a lot less demand once the snow starts to fly for certain properties — resort properties excluded … It’s a good time to try to jump in mid-winter and see what you can find. That being said, the second piece of that equation is that the interest rate is historically low. So it would really be worth weighing out how much you would save based on an increase in an interest rate that may or may not happen in the next couple of months.”
Elizabeth White is a staff writer with the Sierra Sun. She can be reached at email@example.com
Support Local Journalism
Support Local Journalism
Readers around Lake Tahoe, Truckee, and beyond make the Sierra Sun's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Your donation will help us continue to cover COVID-19 and our other vital local news.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User