The news surrounding changes to the methodology of selling residential real estate has dominated news cycles in recent weeks. While this information is topical and will likely create enduring changes to the practice of agency, it has obscured news around a return to normalcy measured by the simple factors of supply and demand.
Q1, of 2024 saw a meaningful bounce from the trough of 2023 resulting in a 30% increase in the total number of residential transactions. Still lagging behind historic average, this uptick represents the pent-up demand from last winter when an overabundance of snow and newly risen interest rates created significant deterrents to the local landscape. While interest rates have only abated slightly, a prevailing sense of optimism for future cuts combined with clear roads and superb ski conditions have given permission for purchasing activity that was not present a year ago.
Meanwhile, pricing has remained remarkably stable with only the slightest downward drift from the market’s 2022 peak.
Sellers, absent distress and largely lacking a viable next purchase given the global market constraints, have generally been content to wait for a satisfying price rather than the typical practice of making incremental price reductions until finding liquidity. The result has been fewer sales, longer days on market and stubborn pricing.
The wind down of a “just right” winter is an opportunity to view the market through a balanced lens. Despite this increase in inventory, the load only equates to 3 months of supply at the current sales velocity, keeping sellers firmly in the driver’s seat.
Q2 will begin to reveal a new condition. The same cause and effect that caused statis for much of the last 24 months may be giving way to a changing dynamic. Inventory has remained tight and pricing nearly fixed because seller who’ve otherwise exhausted the useful life of their Tahoe investment perceive poor buying conditions wherever their next move may take them. A general acceptance of pricing and interest rates in these downstream purchases seem to be loosening up inventory in the local market. Supply has crept upward proportionately each of the last few years and indications are that the typical Memorial Day listing seasonal will be healthier than in recent years.
For more information on Tahoe Mountain Realty’s position on the National Association of Realtors settlement agreement around antitrust litigation, please see below:
