Elements of saturation are becoming evident as the Tahoe-Truckee real estate market tapers into an early winter. Price fatigue has undoubtedly set in as sellers have continued pricing along a meteoric curve while buyers, still quite active by any ordinary standard, have begun to apply some measure of discipline in making purchasing decisions.
Residential inventory remains dead steady at 262 listings, a metric that has barely fluctuated for over 12 months. Sales units have tapered enough that this supply represents over 6 weeks of absorption for the first time in quite a while. While this continues to represent market conditions substantially weighted toward the seller, and thus pricing continues nudging upwardly, the trajectory of asking prices has risen at a greater rate causing the difference between the average asking price for active listings ($3,190,000) and the average sales price in October ($1,219,000) to vary by 260%. As a result, the average days on market for currently active listings has risen to 94 while those that sell are typically priced well immediately and thus move within 28 days.
Because the supply of rationally priced options has diminished, the total number of closings in October, typically the peak closing period in any given year, dropped to just 123. This compares with a staggering 301 in 2020 as the market frenzy was reaching a fever pitch. Despite fewer sales, median price for the month of October hit $1,000,000 for the first time in memory; 5% higher than the year-to-date measure and 20% higher than October 2020.
This benchmark figure was achieved despite no closings of either Tahoe Lakefronts or Martis Camp homes, the traditional stalwarts of premium pricing in the Tahoe market. Rather Lahontan with 4 closings ($2,650,000 – $6,100,000), Gray’s Crossing with 4 closings ($1,535,000 – $3,055,000) and Olympic Valley riding a wave of early snow leading to two closing ($1,150,000 – $3,850,000) led a month in which exactly 50% of all sales were at pricing greater than $1,000,000.
The strong performance of these amenity-rich communities continues a trend by which consumers seek out newer properties within proximity to recreation; be that ski resorts, trails or on-site facilities. The consumer has demonstrated a willingness and capacity to pay a major premium for these options.
The delivery of early snow and correspondingly record-breaking opening for ski season have stoked demand for mountain properties in a typically quiet time. New land offerings in Alpine Meadows and Northstar are demonstrating that market conditions will generally override seasonal considerations when the product fills a niche in a supply challenged environment.
2021 will end as the second most prolific ever for Tahoe Truckee real estate. The year’s final months promise to be revealing as to the patterns we’ll be watching for 2022.