Affordable housing crisis is developing
For about a year now we have been experiencing the strongest and hottest real estate market most of us have ever seen in the Tahoe-Truckee area.
The market has actually been very good for several years, especially since 1996.
Prices, in general have just about doubled during the past five years, and this has been pretty much across the board from low end properties all the way up to the most expensive. This has also been the case to even a greater extent with vacant lots.
In fact there are very few vacant lots being offered for sale, and the ones being offered are twice as expensive as they were two years ago. Houses and condos are coming on the market today 15-20 percent higher than they were a year ago.
Where is all this leading?
It may not result in a real shortage of inventory, it’s just that properties will be selling at significantly higher prices than they did last year.
Of course, we can’t expect this to continue indefinitely. Every previous acceleration of the market eventually ended after a few years with a cooling off and slowing down of the market, resulting in slower sales and a leveling off of prices. We may not experience a decline in prices like that which happened in some parts of California in the early 1990s, but that remains to be seen.
Our boom has largely been fueled by a strong economy nationwide, and even more so by the extremely strong high tech economy in Silicon Valley. Large numbers of new millionaires in the Bay Area have been buying vacation homes at Lake Tahoe, many paying all cash. And, last year, thanks to low interest rates and easy credit, many of our young couples and first time buyers were buying up the remainder of the less expensive properties.
This has in turn led to hardly anything left for sale below $200,000, a shortage of rental properties and higher rents.
We now face a real challenge of providing affordable housing for our young work force and lower income families. A solution to this dilemma, or the lack of a solution, could have a significant impact on our local economy and our own livelihoods. Are we going to build additional lower income units, bus in our workers, or leave it up to major employers and others to provide the necessary housing?
This is a major problem which will become more and more acute until solutions are provided.
We encourage our community leaders, local businessmen, investors, lending institutions and government agencies to assist in coming up with meaningful solutions.
Gerry Lambert is a broker-owner of Lakeside Realty in Kings Beach and the president of the Tahoe Sierra Board of Realtors.
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