Lofty prices, low inventory, and a fast rising cost of living are housing market factors that are not unique to Incline Village. While these conditions exist nationwide, additional impacts from second home owners now occupying properties year-round and the beauty magnet that is Lake Tahoe place additional strain on buyers. As interest rates continue to climb the number of listings are increasing, some with price cuts, although a seller’s market persists in Incline Village and Crystal Bay.
Currently in Incline Village and Crystal Bay, there are 102 single family residences and just 49 condominiums on the market, according to Gail Krolick with Alpine Realty. At a time when the market is seasonally more active, these figures surprise Incline Board of Realtors President Brad Lewis. “Pre-2020 we would see at least 75% more inventory listed in the single family residence category.” And for condominiums? “There ought to be closer to 90 of those property types listed. The market has gone haywire.”
Also lower compared to pre-pandemic is the average days on the market for these listings. In past years, a listing in Incline Village and Crystal Bay area could be on the market for 100 days or more, given the smaller base of buyers and higher tolerance on both sides of the transaction. “The tolerance has shifted,” says Lewis. “Everything is turned upside down. The numbers show that things are selling much more quickly. The pace of which, particularly in the condo category, units are going on the market and flying right off…it’s quite interesting to watch.” The average number of days on the market is 35 days for single family residences (52 days for condos), a mark well below historical averages for the area.
The Bay Area and San Diego are traditional feeder markets for Incline Village and Crystal Bay but Lewis is also seeing more buyers coming from the pacific northwest and Texas. “Buyers coming from out of market are saying, ‘It’s the time.’ The world has had this paradigm shift and if I can work remotely, why not the paradise that is Incline Village,” says Lewis.
Krolick has also noticed more second-home owners occupying their properties. “People were leasing their homes that they were using once or twice a year.” But after 2020, “they’re living here now, they like Incline, and are here year-round. But it’s still a seller’s market.”
And as with other resort communities in the west such as Bear, Breckenridge, and Jackson, the area has experienced substantial median price increases. The median sale price for a single family residence went from $1.1 million in 2020 to $2.47 million in 2022 (a 125% increase), while condos rose from $500,000 to $765,000 over that time (a 53% increase). Combine rapid appreciation with rising interest rates and buying power is reduced for those who may not have the buying power of those driving this voracious market.
“The monthly mortgage payment today compared to that same home a year ago, the effect of cost increase, between appreciation and interest rates, is actually 55% more expensive this year. That’s a compounding factor, it’s really significant,” says Lewis. In terms of housing affordability in this community for locals and employees, “there are forces beyond our control.”
Gail Krolick does see the challenge for buyers looking to break into the Incline market. “I do worry about first-time home buyers but there are options. If you save properly, you can make it happen.” This decrease in buying power will be exacerbated by another interest rate increase announced today by the Federal Reserve at their July meeting. As more buyers give pause, expect to see more listings, some price cuts, and a slight increase in the number of days on the market for the Incline Village and Crystal Bay housing market.