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Condos for Sale in Jefferson Park

Building Wealth With Real Estate Inventing 10/14/2022

We are currently experiencing the ultimate Indian summer here at the lake! Men’s Journal wrote an article claiming that October is the very best time to visit Lake Tahoe! What are your thoughts? With 70+ degree days this week, unbelievable fall colors, an absence of over crowded restaurants, beaches and trails, it’s hard to argue. Hoping you are all getting out and enjoying the peace and quiet!

The Market is Picking Back Up

With all the uncertainty in the market and in the overall economy why are people still investing in real estate? Over the last two centuries, about 90 percent of the world’s millionaires have been created through real estate. It offers passive income, tax breaks, equity building, competitive returns, and protection against inflation.
From 1975 to the start of 2022 the Housing Price Index has increased by over 860%. Investing in real estate allows you to protect yourself and your wealth. Unlike the stock market, your investment can’t disappear overnight. The real estate market definitely has its ups and downs but historically it eventually goes up. Investing in real estate is for the long haul, not a quick return. The safest bet is investing in properties that produce rental income year around. Over time, you gain value from real estate that produces income.
As we have covered in our previous tax deduction blog, the home sale gain exclusion is one of the biggest personal tax breaks available ($250,000 tax break as an individual and $500,000 as a married couple). There’s also depreciation, property tax deductions and mortgage interest from income, deferral of capital gains via 1031 exchange, cost of repairs, maintenance, and upkeep, cost of services (management, legal consultation, etc), utilities, and my personal favorite: travel costs checking on the property, inspection, repairs, etc.
Another major unique benefit of real estate is that you can leverage it so that you don’t have to tie up a lot of your cash. You can use the banks’ money to grow your investment.
Regardless of the market, supply follows demand and demand is rising every year. Populations rarely decrease, which is why the need for housing eventually increases.
One of the benefits of the increase in mortgage rates and hesitancy in the market are that more people are choosing to rent instead of buy. Rents are going up and availability is going down. It is an opportune time to create a lucrative rental portfolio using other peoples’ money to cover the mortgage, taxes, and upkeep.
Real estate is always a great investment in the long term because you have more options than with other types of investing. You can buy a house to flip and if the market drops then rent it out until it picks up again. If you buy a property to rent and the market takes off then you can sell it and upgrade to a better property. The flexibility of real estate is one of the reasons it has created more millionaires than any other asset class.
All of that being said it’s not fun for anyone to lose money or to have down years, even though it’s temporary considering our long term goals. After my 34+ years of doing real estate, of course, I would rather have everything go up all the time but in reality we have up years and down years. The way to win over the long term is to anticipate and be ready for the dips. When this is the case, instead of the gloom and doom that is circulating in the media, those that are prepared are excited for the prices to come down so that we can take advantage and purchase properties that will increase in value during the next wave. In my opinion, it’s always a good time to buy real estate. The reality is that real wealth is made by buying when everyone else is selling, and selling when everyone else is buying.
What if you invest and prices plummet? If you are willing to risk the possibility of increased mortgage rates and the current uncertainty is too much for your comfort level then holding off might be the best strategy for your stress level. What if you are ready to invest and you hold off because of interest rates and they go up to 9%+ in the next couple years?
What if we are headed into a recession? Of the 11 recession periods we have experienced in the U.S. since 1950, they have averaged about 10 months. Average home buyers who had bought at the beginning of the 2007 housing recession lost 15.96% over the next five years, but made money over 10 years. As we’ve discussed in previous blogs, we are nowhere near the situation we were in in 2007 with the massive lending crisis. What I recommend, if you have hesitancy, is not to take my word for it. Do the research, look at the numbers, look at history, look at your current financial situation and decide what you are comfortable with. Just remember that doing nothing is actually doing something; holding onto cash means making the interest rate your bank is providing while inflation keeps rising.
I do what has worked for me over a lifetime of investing and learning. I recommend my clients and friends do the same but you have to take into account your own comfort with the ups and downs of the market and with life. Embracing that, in reality there are no guarantees in life. Everything is temporary. Ultimately happiness and true success come from cherishing everything in our life with this perspective. Enjoy each day, each moment, know that it’s all always changing!

Median Condo Sales Price 2012-YTD


Our Market This Week

We had no new condos and 2 new homes come onto the market this week. We currently have 30 active condos ranging from $420,000 to $2,995,000; the median condo price is $821,500. We currently have 41 active homes on the East Shore ranging from $1,025,000 to $64,500,000 with the median price of $3,450,000 up 6% from last week. Here’s a year-to-date local update:

Local East Shore Lake Tahoe, Nevada Stats – All Year-to-Date

Total Sales YTD:
Condos: 75 (↓12% YOY) | Homes: 74 (↓45% YOY)
The Median Sales Price:
Condos: $680,000 (↓1% YOY) | Homes: $1,532,500 (↑3% YOY)
Number of Sales Over $1 Million:
Condos: 16 = 21% (↑14% YOY) | Homes: 61 = 82% (↑6% YOY)
Highest Priced Sale:
Condos: $5,665,500 (↓5% YOY) | Homes: $32,000,000 (↑52% YOY)
Median Price Per Square Foot:
Condos: $595.70 (↑11% YOY) | Homes: $630.56 (↑4% YOY)
Median Days on the Market:
Condos: 73 (↑38% YOY) | Homes: 76 (↑10% YOY)
List to Sell Price:
Condos: 97% (↓9% YOY) | Homes: 96% (↓3% YOY)
Price Reductions this Week:
Condos: 3 | Homes: 1
If someone you care about needs guidance or recommendations, please share our contact information as we are honored to be able to help! If you would like to receive our in-depth market update or would like an evaluation of your property’s value we would love to hear from you! We’ve put together some information below that we think you’ll find useful. If you have anything you want to share with our community please let us know so that it can be included in future newsletters.

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