South Lake Tahoe housing market gives no signs of slowing down

SOUTH LAKE TAHOE, Calif. - Through the first 11 months of the pandemic, home sales in towns away from major cities have grown across the county, not just in South Lake Tahoe. Employees started working remotely and figured working in a place where traffic, crowds and home prices are greatly reduced, allowing them a nicer way of life, and in South Lake Tahoe's case, beautiful scenery surrounding them. What is also unique on the South Shore is the type of home buyer who made their way to Tahoe. Those buying homes are living in them and not using them strictly as an investment and vacation home.

The median price of homes sold over the past twelve months has increased 21.6 percent to $589,900 and there are no signs that the market is slowing down or home prices are dropping.

"I didn't expect the pandemic to turn out the way it did with real estate," said Kili Rahbeck, South Lake Tahoe Realtor® and current president of the South Tahoe Association of REALTORS®. She said the market has been strong for the past 11 months and those in the real estate industry are not seeing their normal winter slow season.

With a median purchase price of almost $600K, the local buyer hasn't been priced out of the market yet, said Rahbeck.

"I still have the same number of local buyers along with out of area buyers," said Rahbeck who also serves on the South Lake Tahoe Planning Commission. "Interest rates have dropped so it evens out with the purchase price. They are buying a more expensive home but payments are close to the same as if bought last year."

The recession of 2007-2009 brought buyers to town looking for good deals and investments, and they found them. Many local employees and homeowners moved out of the area due to a job market hit hard by the recession. Tourism became something people couldn't spend money on, so the tourist-based economy of Lake Tahoe took a hit. Many of the homes purchased at that time turned into vacation rentals and the look of neighborhoods began to change.

Rahbeck said her buyers are staying and living in their Lake Tahoe home and working remotely. She said she is seeing new faces in the grocery stores and around town, and neighborhoods are starting to look different. They are still looking for homes that are close to trails and nature, three to four bedrooms where they can have office space, and room to spread out. Schools have yet to see an increase in enrollment but with distance learning in California over the past year, students are most likely keeping with their old school districts for the time being.

Current Sales Figures

The January 2021 figures released this week show 116 current listings with 68 of those already in escrow, leaving 48 homes available for purchase. This is the lowest number in years and just ten years ago one would see a few hundred on the market at any time. Most of those homes are over $500K with 28 of those 116 over $1,000,000.

The median purchase price one year ago was $485,000, and since then hundreds of homes have been sold in South Lake Tahoe and El Dorado County on the east slope.

From February 1, 2020 to January 31, 2021 there were 875 closed escrows on the South Shore. During the same months in 2020 there were 604 closed escrows.

In a normal month there would be more listings and less pending sales but homes are not sitting on the market for very long. Rahbeck said she is seeing a lot of cash sales, and even though the escrow process used to be maybe two weeks for those sales, it is currently going over 30 days. Home loan transactions are closer to 45 days to close escrow.

Why the delay?

There are so many homes in escrow because there are not enough title companies and loan officers to handle the high demand, along with a lack of real estate appraisers, according to Rahbeck.

"If we had more appraisers, loan officers, and title companies things would close much sooner," said Rahbeck. She said appraisers are coming from Roseville and Sacramento to fill the void, but that adds onto the cost of buying a home.

How to Buy a Home

Be ready to buy if coming to South Lake Tahoe to buy a home. If not using cash to buy a home, have a pre-approval letter in hand because you are competing against someone ready to make an all-cash offer.

"If you want a house, act like it," said Rahbeck. "A lot of aggressive offers are being made."

One year ago,, homes were selling for about 97 percent of the asking price. This January, it is 100 to 103 percent.

Rahbeck said most of who she sees are home buyers looking for their primary home. They are moving to the South Shore full-time but with long-term plans of making their purchase as an investment. In a year or two they may leave to go back to where their jobs were, but plan on keeping the house and rent it out to short term or long term renters.

She said she gets the question often if they should wait to buy a home when these new residents leave. She said these buyers don't plan on selling should they leave the life of remote working from home. Rahbeck also said the Tahoe homes are much cheaper than their Bay Area homes so they are saving money on their mortgage.

Measure T

Measure T, which is banning vacation rentals in South Lake Tahoe's non-tourist core areas after this year doesn't appear to be having much affect on inventory or sales since the new buyers don't plan on turning their homes into vacation rentals. She also isn't seeing a massive number of homes entering the market at this time. This January was the first month where those whose permits expired during the month are no longer able to rent them out on a short-term basis.

Over the last 12 months, the Tahoe Keys neighborhood saw the most activity with 95 closed sales, a median selling price of $1,000,000 and and average of 84 days on the market (including escrow time). Tahoe Meadows and Tahoe Island Park saw the biggest jump in median sales prices this year.

The National Association of Realtors chief economist Lawrence Yun predicts existing home sales will climb again in 2021 as will home prices in the country.