Consistency from the market is typically a good thing, and that’s what we’ve seen from the market so far this year. In August, as with all of 2014, the luxury segment has been the principle market driver helping to pull up average and median prices, while overall volume lags behind 2013 levels.
August 2014 saw 139 home sales, a sensational number by any measure except August 2013, which posted 160. The average sale price in August leapt by 18% over the same month in 2013, from $770,483 to $913,235. This number moderates to $844,490 when a $10,000,000 lakefront sale located on the California/Nevada border is taken out (Note: this home is technically on the NV side; Nevada properties are not otherwise accounted for in this report). Median price showed a more steady 2% increase over the same period last year to $510,000.
In total, 27 homes closed at or above $1,000,000 compared to just 15 last August showing further evidence of the surging luxury sector. Proportionately, 14 homes sold above $2,000,000 compared to 7 in 2013. Differing from 2013 is the composition of these luxury sales. Previously, the mix of lakeside versus resort properties was about 50/50. In the most recent month, beyond the eight-figure sale referenced above, eight of the next nine most-expensive home sales were within resort communities.
- A $5,850,000 sale in Lahontan. This property spread over two homesites totals 6,776 square feet and represents the highest amount ever captured in Lahontan. This could be a short-lived title however, as Tahoe Mountain Resorts currently offers a magnificent Lahontan home for $5,899,000.
- Six homes in Martis Camp closed escrow in August ranging from $3,200,000 – $4,995,000. The average price per foot for the six was a steady $1,000.
- Additional luxury sales were recorded in Northstar, Old Greenwood, Pine Forest, Squaw Valley and Tahoe Donner in addition to various lakeside neighborhoods.
Interestingly, we are also seeing the waves of 2013 land sales turn into a tsunami of 2014 construction starts, with nearly 200 new custom homes between Martis 25, Gray’s Crossing, Lahontan, Schaffer’s Mill and Martis Camp. This construction surge is driving up commodities and labor costs in building. The likely result is that the market will see a temporary pause in the velocity of land sales in some of these communities.
The exception again is the luxury market (including communities like Martis Camp and Martis 25) where land should sell well as the desire to create a custom property, specific to a family’s need offers long-term lifestyle enhancements that are of greater value than near-term equity. These are largely consumers who are purchasing to enjoy the lifestyle afforded to their families by having a custom mountain retreat. Thus, the beauty of living in Lake Tahoe.