The past year has brought many changes to the Incline Village real estate market. For starters, with sales in units down 50% versus 2005 we are already seeing a lot of agents leave the business. Clearly, our local market cannot support the 350 agents who are members of our MLS when there are only 200 or so transactions taking place in the entire calendar year. The hobbyists, part-timers and others who don’t put in the effort to make real estate sales a full time job are realizing that the easy money years are over. It takes a lot of hard work and commitment to succeed in what is arguably the most competitive real estate market in the entire United States.
Despite all of the projections of doom and gloom by “experts” all over the country, the median prices for the Incline Village real estate market have held steady. Very few property owners in our community actually live and work here, so prices have no relation to local incomes. Property values here are based on supply and demand and what the most affluent people are willing to pay for any particular property. Interest rates, prevailing wages, unemployment and other factors that affect your typical urban and suburban markets have little impact on the Incline Village real estate scene and property values. So, while there may be some pockets of softness in specific condo complexes and in the multi-unit sector, overall prices for property in Incline Village are steady.
Based on current inventory levels, sell through rates and days on market, I anticipate that our market will remain in a plateau through 2007. This means a buyer’s market for the foreseeable future with prices holding steady and upward pressure only existing for the most desirable locations and highest quality homes and condos. It seems odd that unit sales were so much higher in the 2005 seller’s market and so much lower when we are in a buyer’s market. But, it’s human nature to follow the crowd. So, as much as people were in a frenzy to buy when prices were rising they are sitting on the sidelines in equal amounts while prices are in a holding pattern.
If you are a buyer, do you want to wait until prices rise again or do you want to make a purchase while it’s still a buyer’s market & you have greater negotiating leverage? We are seeing the best values go into escrow week after week, confirming the notion that there will be no price collapse in the Incline Village real estate market. Patience is good, but only too a point. I think that the operative phrase during this current buyer’s market is, “You snooze, you lose.”
Taking a look at the other top news story in 2006, two of the big firms in town merged. I don’t think clients in our market care about the size of the firm they do business with. Buyers and Sellers in Incline Village are seeking quality representation and superior customer service, not the biggest office with the most desks. As agents, we all have access to the same MLS and we all attend the same Tuesday morning meetings. It’s not the size of the office you work in, it’s the quality of support that your office provides and what each agent does to help their clients achieve their goals that makes the difference.
In summary, 2006 brought many changes to the Incline Village market but none of them turned out to be earth shattering. There will certainly be a shakeout among the marginal real estate agents and hobbyists since there is not enough sales volume to support the current number of agents in town. We are already seeing a ripple effect as the title companies and other affiliates down size to accommodate the decreased number of transactions. The ones who have benefited the most during this slower sales phase have been the contractors who do high quality remodeling. In this slow period, many property owners are doing work on their condos and homes and enjoying them more instead of putting them up for sale.
Copyright 2006 Don Kanare – All rights reserved.