2010 has been an interesting year for the South Lake Tahoe, California real estate market. Prices have been rising slowly and the number of homes sold has increased 22 percent from 2009. One of the main statistics used to evaluate the market is the median sales price. The median is the middle sales price of all homes sold. 516 homes have been sold in South Lake Tahoe so far this year. Arrange all of the homes sold in order of sales price from lowest to highest and the median price is the average of number 258 and 259 on the list. That number is $347,375 and it represents a nine percent increase from $318,000 last December. The median sales price is a more accurate reflection of the overall real estate market than the average sales price, which can be skewed by a few multi-million dollar homes.

The graph of the average price per square foot of homes sold in South Lake Tahoe in 2010 shows the disparity in the home sales price per square foot depending on the price range. The average price per square foot for homes under $200,000 has been trending down about 15 percent to $150. Homes that sold in the $200,000 to $400,000 price range, which account for 51 percent of all sales, have maintained a consistent price around $200 per square foot throughout the year. The average price per square foot of homes that sold for over $400,000 has increased 25 percent to $250 since January. That is a positive sign that the housing market may finally be turning the corner.

"The upper end of the market used to be $750,000 and above, now it is more like $400,000 and above," said Larry Sabo of Paradise Real Estate. "This shows the true effects of the housing recession but also represents an excellent buying opportunity."

The graph of the number of homes sold in South Lake Tahoe shows that homes in all price ranges basically follow the same seasonal trends. This is a trailing indicator since escrows usually average about 90 days. Home sales dropped off during July, the busiest tourist month at Lake Tahoe. These contracts were likely signed before July and business is usually slow in April around tax season. The number of homes sold peaked in September and that follows the usual trend of Lake Tahoe home sales.

The following pie charts with the number of bank owned and short sales by price range clearly show that it was the blue collar owners that were hit the hardest by the recession. 80 percent of the homes that sold for under $200,000 were distressed sales. By comparison, 45 percent of the homes with a sales price from $200,000 to $400,000 were bank owned or short sales. Homes that sold for more than $400,000 had the fewest number of distressed sales at 34 percent. Overall, 46 percent of all 2010 home sales in South Lake Tahoe have been bank owned or short sales.

"The distressed properties that are priced aggressively are selling very fast," according to Larry Sabo. "This accounts for a large percentage of the increase in the number of sales this year. Smart buyers recognize the good deals as soon as they come on the market. The most affordable homes under $200,000 are in highest demand. Paradise Real Estate specializes in bank owned and short sale transactions."

In our first newsletter of 2011, we will feature more information on the luxury homes ($1.5 million and above). Until then, have a happy holiday season and a prosperous new year!

Sincerely,

Dan Spano

Owner/Broker of Paradise Real Estate