A return to normal, or average, market conditions for the Tahoe-Truckee real estate market is standing in such stark contrast to the momentum of recent years, as to feel like a dramatic downturn.
The overall velocity of sales has unquestionably slowed combined with a meaningful leap in inventory. While neither has changed in a way that inverts supply and demand away from the seller’s favor, conditions over the last few years have been so dramatically skewed as to create a stark difference at the outset of H2, 2022.
July witnessed just 106 residential transactions. While this exactly equals the average for 2022, it underperforms the historical average by 20% and the last two years by 50% and 66% respectively.
Conversely, price held steady. The month’s average price of $1,691,000 is a 3% increase over the same month in 2021 and a massive 40% over 2020. Driving price over the last 30 days were an astounding 7 home sales in Martis Camp at a comparatively modest median price of $6,225,000. As well, 3 homes in Gray’s Crossing closed at a high average of $3,275,000 in addition to a Schaffer’s Mill property for $2,300,000. The season for lakefront properties kicked off with an estate on Tahoe’s West Shore selling for $8,900,000 plus and handful around Donner Lake between $2,000,000 and $3,000,000.
Ambitiously priced inventory will continue to gather days on market for sellers who’ve not yet received the memo as to lack of irrational buyers and an increasingly competitive marketplace. Given the absence of distress among in this group and in the market broadly, the Tahoe region is more likely to see the absence of transaction velocity than values falling in any meaningful way.
While economic conditions beyond the region appear tumultuous, the absence of speculative purchases and minimal leverage even among those paying top dollar over the last 24 months leave relatively few sensitive to interest rate increases or other factors that would necessitate quick liquidity. Additionally, utility remains exceptionally high indicating that inventory is unlikely to spike among those who’ve not fully exhausted their time in Tahoe.
While volatile times undeniably lie ahead, Tahoe will remain a refuge and offer a quality of life that is ultimately the most recession-resistant commodity.