Tahoe/Truckee real estate: A look back at 2009, and ahead to 2010
Special to the Sun
TAHOE CITY, Calif. and#8212; As we jump headlong into 2010, I canand#8217;t help but look back on all the real estate industry has been through over the past year. After three years of a declining real estate market, 2009 brought a much needed break for the hard-hit real estate sector. Our local market benefited from bargain hunting in entry level segment, federal and state housing credits for first-time buyers, and a gradual improvement in the overall economy.
Looking ahead to 2010, there are lots of questions. Will housing prices rebound? Will the new extended and expanded tax credit be just what the doctor ordered? Will the luxury market recover similarly to the entry level? In fact, these are just a few of the questions Iand#8217;ve been asked lately. So, I thought Iand#8217;d gather a few of my own FAQs and share with you my views on 2009 and what may be ahead for 2010.
and#8226; How did the housing market fair in 2009? Although it was a challenging year, it was a year of transition in many of our markets. We bounced along a rough bottom, but at the same time, we are now prepared for a modest and consistent improvement. The second half of 2009 was when we finally saw a jumpstart, which seemed to stem from consumer confidence. Does a buyer feel confident in his/her employment and finances? If so, then buying a home is typically a good option.
and#8226; Do you think the extended and expanded tax credit will solidify our market recovery? We are certainly recognizing that the tax credit is compelling if a potential buyer is confident in his/her finances or future employ-ment, and it has helped to increase activity in the lower end market. But it probably wonand#8217;t create a market-wide recovery. For that, we need to remind buyers that now may be the best time in our history to consider an investment property or vacation home in Tahoe-Truckee. For existing homeowners who are considering moving up, there is less competition and better deals available to buy the home of their dreams in the location they have always wanted.
and#8226; Do you think weand#8217;ve hit bottom? I think in many California communities we probably have hit bottom. We are seeing statistical evidence of it in the average sale price and in the number of homes sold. Interestingly, the communities that may have hit bottom are not necessarily those that were hardest hit by foreclosures. I believe over the next 12 to 18 months we will continue to see pressure on home prices in the Tahoe-Truckee market. For 2009, sales were much greater than in 2008 due in part to large inventory levels and lower prices. I believe this trend will continue in 2010. When the market gets soft, the people who previously couldnand#8217;t afford their first choice community had to settle for their second or third choices. But thanks to the opportunities in todayand#8217;s market, they are better able to buy into their first choice neighborhoods.
and#8226; What do you recommend to todayand#8217;s home buyer? Buyers need to understand that the market is a little schizophrenic right now. It is probably the time to buy, but the market has been challenged. You may see that in certain markets, weand#8217;ve had lower prices and decreasing numbers of available homes for sale. The problem is that if you wait a year, youand#8217;re probably going to run up against a lot of challenges: increased interest rates, increased buyer demand and decreased housing inventory. The combination of those factors is creating more urgency in the more desirable markets like Lake Tahoe and Truckee.
and#8226; What do you anticipate for real estate in 2010? I predict that in 2010 we will continue to see high levels of inventory and continued pressure on home prices in Lake Tahoe and Truckee. Home sales should be even better than in 2009. Our market will continue to be a buyerand#8217;s market and a great opportunity for securing a great vacation home, investment property or moving up if you are a homeowner. We probably wonand#8217;t ever return to the sales levels of 2005 and 2006 because so many of those sales were artificially created. But, I believe we are now on the right path toward modest, sustainable growth.
What a ride 2009 has been. And although there still could be a few surprises ahead, I for one am glad to see many of our challenges of this past year behind us. I truly believe that we are collectively emerging from this difficult market with a renewed awareness of the real estate industry, its affects on our nationand#8217;s financial stability and how important it is to learn from our mistakes. We have weathered the storm and seem well positioned to reap the benefits of an evolving market.
and#8212; Mike Lombardi, manager of Coldwell Banker Residential Brokerageand#8217;s Tahoe/Truckee region, provides the above tips. Lombardi oversees a talented team of more than 75 real estate professionals in the Tahoe/Truckee area. His office is located at 531 North Lake Tahoe Blvd. in Tahoe City and he can be reached at (530) 581-7779 or by e-mail at Michael.firstname.lastname@example.org.