CASH IS KING

Incline Village is an economic entity in itself, in many ways. It is by and large a true resort town with most of the housing being second or third homes  belonging to the upper 1% of income earners. We have been noticing a strong increase in the 2 million plus homes that are being purchased for all cash. With a strong stock market {with the exception of 2 days last week} putting tremendous amounts of cash in these afformentioned hands and the pent up demand for luxury properties,  an interesting “micro market” has been created. There has been a progresive uptick in interest rates that has added fuel to the already slumping housing market in mainstream markets. Although last weeks stock market correction drove many investors to a “flight to quality”, putting cash into bonds and thereby causing interest rates to come down. I believe this is only a temporary correction as the stock market appears to be recovering this week and money will flow back out of bonds and reverse the interest trend. With all cash buyers, the negotiating position of the buyers is better than ever with no need for extensive underwriting by banks, insurance companies and much quicker closing times. These factors combine to provide a unique market in Incline Village, where prices have been increasing.