With the election over it's time for Congress to get back to business and do the job that the American people elected them to perform. Regardless of who was going to win in November, approximately half of the United States population was not going to be happy with the final outcome. But it's not our job as the writers of this column to pass judgment on the election results. Our mission this week is to analyze whether or not the recent presidential and congressional elections will have any impact on our local real estate market.
As we have written many times in the past, real estate purchases at Lake Tahoe are mostly discretionary. The vast majority of our buyers come from California with the highest concentration originating from about a dozen distinct geographic areas in Northern California. Real estate sales at Lake Tahoe are fairly closely tied to the success and condition of the local economies where our buyers reside.
Since approximately one half of all the purchases in our market are all cash, interest rates would have to rise significantly for it to have any dampening effect on sales. It is unlikely we are going to see anything more than a one quarter or one half of a percentage point increase in the federal funds rate between now and the summer of 2017, even if Janet Yellin is replaced. So, there is very little risk that changes in mortgage interest rates will have any significant influence on real estate sales at Lake Tahoe in the near future.
We don't see the federal government having any impact on Lake Tahoe real estate sales during the coming year. The biggest developments facing residents on the North Shore involve Placer County government officials not the folks back in Washington. It is likely that the courts will have decision-making power that could determine the outcome of the proposed developments in Martis Valley and the ridgeline above Kings Beach and Tahoe Vista. This story will continue to unfold in 2017 and beyond.
The Incline Village / Crystal Bay real estate market has a finite supply of buildable land and 98% of it has already been developed. There are only a few dozen residential lots not yet built upon. And there is virtually nowhere to build a large condominium or commercial development unless an existing one is torn down and redeveloped. There are a handful of vacant commercial parcels along with the old Incline Village Elementary School property that have the potential for significant development. The latter parcel has been the subject of debate for many years and it's unlikely that anything will take place on that property anytime soon.
The net result is that the presidential election of 2016 will have no direct impact on our local real estate market. While there could be repercussions elsewhere in the country as laws and regulations are changed, real estate life at Lake Tahoe will continue in the usual fashion. The TRPA and county governments will have far more influence on new projects and redevelopment than anyone in Washington DC. The one place we would like to see involvement at the federal level affecting a piece of local real estate is the restoration of Incline Lake. Restoring this little gem and making it available for public use would provide a wonderful recreational amenity for all of us to enjoy.
Weekly Real Estate Update
Statistics gathered from the Incline Village MLS on 11/13/16
Houses Condos PUDs
For Sale 127 66 21
Under $1 million 31 56 9
Median Price For Sale $1,850,000 $529,000 $1,150,000
YTD Sales 2016 145 176 51
YTD Sales 2015 123 161 50
New Listings 7
In Escrow 8
Closed Escrow 10
Range in Escrow $150,000 - $1,227,000
These statistics are based on information from the Incline Village Board of REALTORS® or its Multiple Listing Service as of November 13, 2016