Sac Bee Article: Good Time to Buy in Tahoe

 Falling prices lure second-home shoppers to Lake Tahoe area

SACRAMENTO BEE By Hudson Sangree and Phillip Reese

Like a lot of vacationers, Rick and Kristie Santos would return from trips to Lake Tahoe during the housing boom wondering what it would take to own a second home there.

They were always disappointed when they looked at the listings. “You’d jump online and never could afford it,” Kristie Santos said. “It was out of reach.”

Lately, however, with interest rates dipping below 4 percent and home prices seeking bottom, the Fair Oaks couple started thinking differently. The Santoses recently joined a growing number of would-be buyers scouting the Tahoe area for second homes.

On Saturday, the couple went on their first trip with a real estate agent to look at vacation properties in the sprawling, wooded Tahoe Donner subdivision near Truckee. Most were listed in the $300,000 to $400,000 range, a big drop from the peak.

The outdoor enthusiasts came away feeling their long-held dream of owning a mountain getaway might be attainable.

“It’s a compelling time to buy for families that a few years back thought, ‘There’s no way we can do this,’ ” said Alison Elder, a top agent in the Truckee area who showed the couple a half dozen homes.

In fact, the real estate market around Lake Tahoe has been hopping lately, with buyers scooping up relative bargains.

Home sales in many ZIP codes surrounding the California side of the lake nearly doubled from 2007 to 2011, DataQuick figures show. On average, roughly three homes per day sold last year on the California shore.

The driving factor: Tahoe-area prices are the most affordable they’ve been in years. Prices per square foot around the lake dropped by anywhere from 25 percent to 45 percent between 2007 and 2011.

It’s the same dynamic that’s played out here in the Central Valley: Short sales and bank-owned homes have been keeping prices low, though a shortage of inventory is now creating some upward pressure.

The result is that homes in most ZIP codes surrounding Lake Tahoe sold for a median of roughly $280 per square foot last year, similar to the cost of homes in the college town of Davis. Homes in South Lake Tahoe sold for about $180 per square foot, a bit more than prices in Folsom.

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