Incline Village's predominant second-home market this summer felt the aftershock of slumping job and real estate markets in Southern California, the Bay Area and Southern and Northern Nevada.

A slowing job market (statewide, California added just 900 jobs last month; its recent average has been 17,400 per month over the previous year according to the state Employment Development Department), combined with recent hikes in interest (though the Fed did not raise interest rates for the first time last month since May, 2004), have led to a basin-wide real estate slowdown.

But some say there are signs of hope.

The Bay Area, while experiencing a similar glut of housing and slow market to follow, is also currently in the midst of Internet 2.0 - a resurgence of web business models largely modeled after "share" sites like YouTube, MySpace, Twitter and Facebook; the ubiquitous access to broadband and Wi-Fi has also brought to fruition the heady dot.com expectations of five years ago.

As the tech sector continues to grow, some predict a future splash for the second-home or "instant millionaire" buyer market which could mirror the heyday of 2002-'03.

"Hey, anything is possible," said Lakeshore Realty principal Chris Plastiras.

Many Incline Realtors said this summer's swoon and uncertain future to follow is a picture that is highly interpretive and speculative.

Three things seem certain however: 1) It's not 2003 anymore. 2) The "condo boom" is over, for now; and 3) While there are more than 400 homes, condos and PUD (free-standing homes with lots collectively owned) properties on the market, the most in the past half-decade, according to at least one long-time local Realtor, "the competitively priced, high-end home in a desirable location is still a solid seller."

The proof may be in the numbers.

From January to August 2005 348 homes, condos and PUDs sold in Incline.

At press time, only 180 homes, condos and PUDs have sold thus far in 2006.

"The numbers you see are off about 50 percent, which is actually an improvement from a month ago, so we'll see - the real story will be after September and October," Plastiras said.

Several local Realtors have noted the market has changed since 2003 when the area experienced steep spike in condo and PUD sales and a surge in prices.

"I think - one example - what you saw with the big bump in the McCloud (condos) was something that was sort of predictable," said local Realtor Terry Moore. "There were some issues with construction early on and they were undervalued - those (issues) got settled, the market got hot and then ... it just all exploded.

"Now, it's different."

Regional reports of continued steady sales of units at the new Village at Northstar, Squaw Creek and the Village at Squaw coupled with the proposed conversion of the Cal Neva into 200-plus privately owned lakefront condominium units, may portend a brighter future for a specific kind of home sale in the area.

Realtor Moore and developer Vince Scott are currently completing the first phase of Incline Creek Estates, more than 50 PUD properties "ready for move-in", and note that sales are "steady and improving."

"Of the first phase we have 80 percent (17 of 21) sold or under contract," Moore said. "The second phase, is 50 percent sold or under contract.

"I'd say there is a market for this kind of home and we are doing well, very well this summer."

Others agreed new construction does still have appeal:

"(It) is attractive, provided it's not cost-prohibitive," Plastiras said. "Having a place to stay where everything is ready, simple - convenient - appeals to many types of buyers."

While certain types of homes may currently be consistent sellers, if prognosticators are correct, the overall downturn, or "market correction" may be here to stay.

In its second quarterly report of 2006, the UCLA Anderson Forecast anticipates a slowdown in real estate across the United States, especially in the West.

This is the second predicted downturn in a row from the forecasters.

The continued sag in the real estate market brings a bigger question, Anderson Forecast director Edward Leamer said:

"(Will) housing difficulties be amplified by problems elsewhere in the economy, producing a nasty recession, or will the pathology be mostly contained in the real estate sector?"

Leamer said he thought the recession would be limited to the real estate sector, and noted that as the number of homes sold will drop as owners decline to sell in a weak housing market - ergo prices should hold.

This month, a Wall Street Journal interview with Kenneth Heebner, manager of the $1.2 billion CGM Realty Fund, (the mutual fund with the best 10-year record of all real-estate-focused mutual funds) predicted continued "significant decline" in the real estate market:

"A huge buildup of inventories is taking place, and then we're going to see a major (retrenchment) in hot markets in California, Arizona, Florida and up the East Coast. These markets could fall 50 percent from their peaks," Heebner said.

But for now, some long-time local Realtors said this current state of the market is "only natural."

"Trust me, this is nothing so far," said 30-year Incline resident Syd Brosten, who recently sold his home one block off Lakeshore and moved to Montana. "Take my home for example, it's on a level lot, with a yard, south facing with a flat driveway - a family bought it right away.

"So, for the right home at the right price, it is still a very good market."



-The Wall Street Journal and the UCLA Anderson Forecast contributed to this report

News editor Andrew Pridgen may be reached at (775) 831-4666 ext. 111 or at apridgen@tahoebonanza.com.