Second Home Market Showcase: Lake Tahoe
Second home markets were among the most successful real estate markets in 2020, offering rare luxuries such as privacy, space, and gorgeous natural surroundings. Accordingly, LPI has gathered insight from 6 major second home markets for a limited blog series, "Second Home Market Showcase." A comprehensive summary of these findings can also be found in Luxury Portfolio magazine.
Sue Lowe, Senior Vice President and Corporate Broker at Chase International, provided us a look at a Lake Tahoe's record-breaking year, the region's biggest draws, and who's buying.
1. Why are buyers drawn to your market?
It's one of the most beautiful places in the world. You’re in the alpine setting with the most beautiful lake by far In North America, if not the whole world, and a good 80-85% of the land around Lake Tahoe is protected under government ownership.
Plus, it’s all-seasons. We’ve got around 13 ski areas, so winter sports are unsurpassed here, and summer sports on the lake are just phenomenal.
Overall, the quality of life is top notch. There’s room to breathe and open space. You can walk out your door pretty much anywhere you live in the entire basin and go out to be one with nature.
2. What home features in your area are in high demand?
Since we are in the mountains, people tend to like the mountain style homes.
Also, because the shift has gone more contemporary in the last few years, you see a lot more modern contemporary, but we have extremely limited growth here, as there is a moratorium on building. You generally have to make do with what's here and remodel it.
The features are not what drives the purchases as much as the location, what state it's in (California or Nevada), and it's proximity to amenities. People don't buy houses up here because there's a nice wine cellar or a theater – it’s being in Lake Tahoe.
heard that question before and the folks here know it's kind of been everywhere.
3. How is the local market performing compared to this time last year?
I think we're going to finish the year at around a 100% increase in sales volume (in dollars) sold from last year. The most staggering part of that is not that we are doubling our market, it's that we did it from June on. Our market was down 24-25% up until June, so we made up the difference and then still went up around 100% over the last year.
4. Is there a rise in the purchase of primary homes within the region?
We’ve had quite a few home sales of people moving here permanently, which we've not seen in over 25 years.
We’re also seeing more young people coming up here and making this their permanent home because they can work from home and they love the lifestyle. Additionally, we’re seeing people that are retiring or on the sunset of their career coming up and spending more time here.
I personally believe the main reason for this is the mindshift change among the general public. People want a safe Haven. They want a new place to be. They want open space. It’s not just in our market. I's happened all over the country, as we all know, but our market far exceeded probably because of our open space and our recreational benefits.
5. Which locations are most buyers coming from?
The majority has always been northern California, because they can get here very quickly.
6. Is there activity from buyers of regions that you have not seen before?
I’ve seen an increase from people from Texas, which is interesting because there are also tax favorable state, but it's a nice blend if you live in Texas to come up to the mountains.
What we don't see right now, of course, is our international buyers. Since nobody can really travel easily, we're not seeing the influx of international buyers that we've had in the past.
Our biggest draw is the Bay Area of Northern California. Interestingly, we are seeing an influx from Southern California, more so than we have in the past. It’s interesting because we have an office in Vegas, too. Our Vegas office is seeing more Bay Area buyers than they've ever seen in and we're seeing more Southern California buyers than we've ever seen, so there's a little flip flop there.
7. How do you think the local market will look post-COVID?
We have historically low inventory right now. That’s going to take a while to start weeding out and gaining traction, but we’ll have a slew of buyers waiting to buy here as soon as something opens up.
I believe, however, 2021 will remain a good year for Lake Tahoe. So many people have fallen in love with Lake Tahoe because they've been able to come up here and experience a different way than they have in the past. That will continue to move forward.
Key Takeaways:
- Close to nature – natural surroundings are the biggest draw for buyers
- Record-breaking sales – one of the most major real estate markets in the U.S., sales volume (in dollars) has doubled in 2020 and inventory levels are low
- Primary homes – more buyers than ever are treating Lake Tahoe as a permanent residence
- Buyer breakdown - most buyers are young or on the verge of retirement, many originate from the Bay area, but there has been an influx in buyers from Texas and Southern California
For more on the second home market, view the latest issue of Luxury Portfolio magazine and check back every Thursday through mid-April for extended interviews from experts in Turks & Caicos; Whistler, Canada; Annecy, France; The Hamptons, New York; and Naples, Florida.
This interview has been condensed and lightly edited for better readability.