The local real estate market had spent much of 2018 in a latent state with high demand constrained by unusually tight supply. As is often the case, spring brought a wave of new inventory allowing the market to show kinetic energy in the form of increased deal flow.
July, 2018 outpaced the same month a year prior by 1% after comparatively lagging through the entire second quarter. More notably, the market gravitated toward high-end and super-premium offerings exploding average price by 32% year-over-year to $1,058,488. The bias toward higher-end properties also jumped median price by 15% and total transaction volume by 35%.
The headline transaction for July was undeniably the $24,000,000 sale of a premiere lakefront estate represented by Tahoe Mountain Realty.
This transaction marks the third sale above $20,000,000 in 2018 joining previous lakefront transfers of $22,865,000 and $40,000,000. Prior to 2018, just two published sales have ever eclipsed $20,000,000. Lakefront property on Tahoe has always been the pinnacle of mountain homeownership in California. Recently, strong market forces combined with the availability of rare and unique updated properties have created a groundswell of interest in premium real estate.
This influx of premium sales has created a widening gap between average and median price to the point where year-to-date average price ($1,091,966) is nearly double that of median price ($642,000).
This is indicative of rising wealth creation in Tahoe’s Northern California feeder market wherein quality product in a beautiful setting is of increasingly greater intrinsic value. As the San Francisco Bay Area has grown more crowded and commerce more intense, successful consumers are finding the virtue of retreating to the woods to be worth the premium.
Such conditions can’t continue indefinitely but the trend is a strong reflection of the values of our consumers. One need only study the parking lots of the region’s popular trailheads or ski resorts to understand the need for time in nature.