Real estate activity in the Tahoe Truckee region continued at the same steady pace that has defined 2019 to date. Absent are the 8-figure mega-deals that frequented these reports during much of 2018 driving market data through the roof. Instead, we have seen “normalized” conditions that have produced consistent, positive results.
In comparison to 2018, residential transactions in July fell by 15% while dollar volume came in 40% lower. Adjusting for sales of some of Tahoe’s most scarce and premium properties between $4,600,000 – $25,000,000, the results from the most recent months are more favorable. In fact, July 2019 bears striking similarity to July 2017 with nearly identical totals for transactions, dollar volume and average price. Median price has risen approximately 5% over this 24-month period; perhaps the most accurate gauge of the market’s actual performance.
The absence of mega-transactions should not be mistaken for waning demand at the highest reaches of the market. In reality, supply of these premiere offerings has become remarkably scarce. On Tahoe’s vaunted West Shore, only five lakefront properties are currently for sale capped by two Homewood properties listed for $8.45 million and $8.95 million. The predominant value for each is found in the land, existing coverage and pier. Currently, zero lakefront homes are available from Tahoe City to Homewood.
As has been the case for much of the year, the frenzied activity can be found among newer offerings in resort communities around Truckee. Gray’s Crossing has now closed 17 residential transactions year-to-date; a 54% increase from 2018. Median price in that community has similarly risen 14% as its stature has risen along with the completion of a substantial number of beautiful homes. With another six homes currently pending sale, available inventory in Gray’s Crossing is down to just 8 properties.
Similarly, Lahontan has continued to thrive as more contemporary homes are completed complimenting traditional mountain offerings. Four brand-new home sales have yielded an average of $792 per square foot year to date as compared to $585 for all other inventory.
Less robust has been the performance of vacant land offerings. With construction costs escalating at a rate far greater than real estate appreciation or simple inflation, the opportunity to build a new home for a price equal or less than its market value is increasingly difficult. In turn this has greatly reduced demand for vacant land offerings and/or compressed price to a level that creates affordable margins. Year-to-date, transactions of vacant land are down 39% from the previous year with just 116 total closings. Average price has dropped 20% from $297,000 to $240,000 thus far in 2019. Comparatively, much of the difference can be attributed to the near build-out of Martis Camp.
Mid-August marks the increasingly early end of summer vacation. In Tahoe, these typically lead to quieter midweek periods with hyper-active weekend activity. For real estate, summer window shopping gives way to more serious decisions in anticipation of the season to come. We expect this will be a typically busy period as many families make decisions to invest in a healthy and happy mountain lifestyle.
