The Rim Fire that is devastating parts of the central Sierra including the west side of Yosemite National Park along with the American Fire to the northeast of Forest Hill, California have created another side effect that many have not considered. Besides the large number of vacationers who canceled their reservations at Lake Tahoe for the last week of August and the Labor Day holiday, buyers of Incline Village and Crystal Bay real estate sat on the sidelines unlike anything we have seen this time of year since 2007. Normally, the last week of August provides a surge of activity for real estate sales in our community. However, the smoke from these fires invaded the Lake Tahoe basin for the better part of the last two weeks and dramatically reduced the number of properties going into escrow.
The chart below shows a year-by-year comparison from 2007 through 2013 for sales during the last week in August.
Year Properties Going Into Escrow
Even during the depths of the recession we had significantly more houses, condos and freestanding condos going under contract during this time of the year than in 2013. And while some might argue that the early return of students to the public schools has altered the vacation schedules of many families, the reality is that school schedules have only a minor impact when compared to the decline in visitors during the past two weeks. Adding support to this analysis is the fact that the prices of properties going into escrow in the last week of August were in a very narrow range from $227,500 up to only $759,000.
Buyers of lake and mountain view properties (which generally begin above $800,000) have become tentative when they cannot see the scenery that is normally enjoyed from these choice locations. While the local real estate agents usually know just what the view is like from any particular property, it can be difficult if not impossible for someone who lives outside the area to envision that the view they hope they are seeing is equal to what they will ultimately purchase. As the prevailing winds continue to push up from the south and southwest, it is likely that smoke from the Rim Fire will continue to obscure the views along with making it less than pleasant to be outdoors. Sore throats, clogged sinuses and burning eyes are not conducive to making a purchase decision especially when you're talking about properties that cost hundreds of thousands or even millions of dollars. So, even though we will occasionally have days when the winds shift to a more westerly direction and the smoke clears out of the Lake Tahoe basin like it did on Saturday, August 31, buyers have little incentive to make the trip up here to shop for property.
Most likely the Rim Fire will have a temporary effect on real estate sales and we can expect a surge in activity when clear skies return during autumn. Traditionally, many of the buyers who live in northern California travel to Lake Tahoe from late September through mid-November to take second looks at properties they viewed during the summertime or to hunt for bargains among the most motivated sellers. Therefore, sellers should not despair while this cruel smoky phenomenon has disrupted showing and sales activity as summer comes to a close.
This latest wildfire catastrophe should also serve as a wake-up call for anyone who has been postponing doing the defensible space work at their property. Now is the time for Incline Village and Crystal Bay property owners to take a serious look at how they can make their properties safer from fire and to engage the local service providers to implement the best action plan. Anyone who owns a property with a shake roof should consider replacing it as soon as possible; especially since the vast majority of shake roofs in our community are over 30 years old. It's not just the integrity of the roof; it's the increased danger to your property and your neighbors that is of great concern. Tree trimming and tree removal along with brush and pine needle clean up should be top priorities for anyone who has procrastinated on handling these important tasks. While the North Lake Tahoe Fire Protection District consists of a terrific staff that has done a tremendous job over the past two decades to make things safer, there are a significant percentage of properties in private hands that are creating a threat to our community. Maybe now the TRPA will realize that the Lake Tahoe basin is dramatically overgrown and that the only way to significantly reduce the danger of catastrophic wildfire is to get back to the natural forest habitat and remove between one third and one half of all the trees up here.
We had a major scare from the Angora Fire five years ago and while that spurred the TRPA to relax some of the tree removal regulations it did not go nearly far enough to create a safer environment for residents and visitors at Lake Tahoe. Public agencies and private property owners in the Lake Tahoe basin all need to work together on reducing the fire danger so that we don't suffer the devastating effects of a catastrophic wildfire.