Patricia Franklin and her husband, Doug, dreamed about a second home in Lake Tahoe during the COVID-19 pandemic as a family retreat.
The couple started out with a $700,000 budget, enough, they thought, to get a move-in ready home in a nice community.
After six weeks of online searching and masked home tours, the Franklins found their answer — a million-dollar fixer-upper on the Nevada side of the lake. The family, including two college-aged children, has made several visits from their Novato home to their new property. “We had lawn chairs in the living room, a blow-up mattress in the back,” Patricia Franklin said. “It was kind of like glamping.”
Even as the state eases out of pandemic restrictions and companies call workers back to the office, Bay Area families are paying premiums for second homes and a retreat to Tahoe’s natural beauty and outdoor pursuits. Homes are selling at a record pace and for record prices in relaxed resort towns.
“The demand has not slowed at all,” said Truckee agent Breck Overall. “Not one bit.”
Home values in Nevada County, including Truckee, rose 29% to $604,000 between May 2020 and May 2021, according to Zillow data. Nearly 4 in 10 homes sold above list price, triple the pre-pandemic rate.
Home values in El Dorado County, which stretches from the Sacramento suburbs to the shores of South Lake Tahoe, rose 27% in May over the previous year, hitting $599,000. That’s nearly three times as fast as Bay Area home values rose during the same period. “The pace of price appreciation there is astronomical,” said Zillow economist Jeff Tucker. ” And we haven’t seen a slowdown yet.”
Nationally, home values increased 13.2% over the same period, according to Zillow.
Real estate agents and residents say the great northern land rush has been driven by Bay Area residents. An analysis of U.S. Postal Service data showed an influx of 14,700 San Francisco and East Bay residents into the greater Tahoe-Sacramento region. By comparison, just 3,000 San Francisco and East Bay residents left for Austin, Texas, according to an analysis by real estate services firm CBRE.
Tahoe has even seen a spike in the ultra-luxury market, with record-setting prices for estates. A seller listed their 5-acre lakefront estate with guest houses for $60 million this month, which could set a record for Incline Village in Nevada.
The market has become a seller’s dream and has buyers scrambling to bid on the relatively few properties for sale. Despite Bay Area companies bringing employees back to the office, many techies and wealthy buyers have chosen to invest in second homes in the most exclusive enclaves of Tahoe.
Tahoe City agent Jamison Blair said Bay Area competition has seeped into the once-sleepy resort market, bringing bidding wars, cash offers and “as-is” deals. “We just don’t get that up here,” he said.
Families have become more attuned to the quality of living during the pandemic, he said, and still want to stay close enough to their Silicon Valley jobs. Buyers once looking for open space and a bonus room for the kids now top their wish lists with high-speed internet, office space and big closets that accommodate long-term stays.
Jenna Rose Madrid, a Compass agent based in Incline Village, said she’s seeing more California residents looking to move into Nevada with an eye toward retirement and to take advantage of the state’s lower taxes.
The pace has been frantic. Madrid said she’s sold at least a half-dozen homes after giving clients a Facetime video tour, without buyers setting foot onto the properties. “It’s like, ‘Go, Go, Go!’” she said.
Dan Clark and his wife sold their investment property in San Francisco and wanted to find a vacation property that could transition into a full-time residence. The couple, baby boomers who had recently become empty-nesters, searched in Palm Springs and Tahoe — losing a few bids along the way. “We picked the two hottest markets” in California, Clark said.
They finally outbid other buyers for a $1.5 million home in Tahoma, paying about a 10% premium over the list price to buy a home big enough for children and grandchildren to gather for holidays and vacations. The intense search surprised Clark, a veteran Berkeley real estate agent. “I didn’t know it would be that competitive,” he said.
Overall, with Sotheby’s International, said his office handled 102 sales last year, and “not a single one of those families sold their primary residence.” His typical buyers have been from the Bay Area, between 45 and 65 years of age. Many are looking to transition into retirement, he said.
Early in the pandemic, Overall represented a buyer who signed a deal for a $6 million home without ever stepping foot on the property. “That was a sign to me, that, you know what, people really want to get out of the city,” he said.
But agents also said the relentless demand for homes has taken many investment properties and rentals off the market. Locals and tourists have struggled to find adequate part-time and year-round housing.
“There’s less and less vacation homes because more and more people want to be here full time,” said Madrid, a Tahoe native. Many of her childhood friends have been priced out, she said.
But the inflated housing market has done little to slow Bay Area buyers.
Patricia Franklin started searching for Tahoe homes with a friend just a few months into the pandemic. The Franklins compromised. Doug Franklin, a retired insurance consultant, agreed to take on the fixer-upper.
Their home in Incline Village has a solid frame and a decent roof, Franklin said, but it needs floors, an electrical system, windows and new siding. The couple just started renovations in June, a year after their purchase. Before fixing a thing, the home’s value has appreciated as much as 20%, she said.
“If you really want to live up here,” she said, “you really have to jump on it.”