Prices for lakefront homes on the north and west shores of Lake Tahoe in California and Nevada rose 14 percent in the first three quarters of 2016, while the volume of sales continued a two-year decline.
The "hypermicro" market includes lakefront single-family homes and estates along the northern and western shores of the lake from Rubicon Bay, California, to Crystal Bay, Nevada, according to a report released last week by Tahoe Luxury Properties, a brokerage that compiles quarterly reports on the lake’s local markets.
The median price for single-family homes and estates along that valuable lakefront corridor was $4.39 million for the first three quarters of 2016, up from $3.85 million in the first three quarters of 2015.
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Despite rising prices, the number of sales has been declining for two years, due partly to competition beyond the waterfront for the high end of the market, said Bill Dietz, president and principal broker at Tahoe Luxury Properties.
A total of 18 lakefront units have sold since the start of this year, most during the past three months. That’s down from 20 units in the first three quarters of last year, and 30 units in the first three quarters of 2014.
Mr. Dietz cautioned against drawing conclusions about changes in property values based on the lakefront data because the sample size is small. But the falling number of waterfront sales indicates that a recently finished luxury development around 12 miles northwest of the lake is luring high-end buyers away from the shore. The private community, called Martis Camp, sits by a golf course and has amenities like private ski access.=
"Martis Camp is a great place to invest, and it’s the reason why the number of sales on the lakefront have decreased," Mr. Dietz said.
Elsewhere in Lake Tahoe, the market has been strong for the Nevada side of the north shore.
The median price of a single-family home in Crystal Bay and Incline Village, two affluent areas on the north shore in Nevada, increased nearly 20% in the first three quarters of 2016 compared to the same period last year, to $1.09 million.
The number of sales grew by nearly 70%, with 69 more units sold in the first three quarters of this year compared to the same period last year. The growth in sales volume on the Nevada side has to do with state’s relatively lower taxes, including no state income tax, Mr. Dietz said. "It’s a tax-saving strategy," he said.