2021 was a most remarkable year for Tahoe-Truckee real estate as the surge of consumers seeking an enhanced lifestyle continued for a second year.
Demand overwhelmed supply in a manner that delivered multiple bids in a predictable fashion to well-informed sellers. While the total supply of listings over the course of the year was generally equivalent to recent years, the rate at which new supply was absorbed was so swift, that shoppers were often left with very few options.
Coming off the most prolific year ever for property in the Tahoe – Truckee region, 2021 began the year with a mere 231 available residential listings: approximately 6 weeks of inventory. This metric held remarkably steady throughout the year with transaction volume restrained only by available options. Ultimately, just shy of 1,900 residential properties transacted over the course of the year, the most ever but for the previous year.
Predictably, as demand overwhelms supply, prices surged higher. Despite 20% fewer transactions, the total dollar volume was nearly equivalent compared to the previous year. Both average and median prices moved in unison showing an appreciation of approximately 30% year over year. Compounding the gains of 2020, the market has accelerated by over 50% in the span of two years.
This surge in pricing drove nearly 50% of all residential transactions to prices over $1,000,000. This benchmark, previously the threshold for luxury property, has become the median value throughout the region. While all luxury price points saw proportionate gains, sales above $10,000,000 quadrupled from 5 to 20 led by the sale of estate properties in Martis Camp and along the shore of Lake Tahoe. Interestingly, the number of lakefront transactions held steady year over year, yet the dollar volume nearly doubled showcasing the scarcity of this rare product. Records were established with an Incline Village property selling for $47,000,000 while a number of properties on the West Shore eclipsed $30,000,000 for the first time.
In addition to Martis Camp, well-amenitized resort communities including Lahontan, Old Greenwood, Schaffer’s Mill, and Clear Creek have been particularly appealing to the consumer seeking modern design, simple living, and easy access to nature. Properties within winter resorts, most notably Northstar’s Mountainside and Village Walk Skyline communities have sold through new development in record time. These communities as well as Sugar Bowl and Olympic Valley are equally starved for quality inventory at the outset of 2022.
If there is an antidote to the upward trajectory for Tahoe real estate, it can be found in vacant land where factors beyond simple supply and demand can impact sales. Cost increases that have outpaced appreciation will often have a depreciating effect on land value however the greatest impediment is the time delay to get through design, engineering, and permits before wading into intense shortages of labor and materials. All of which have rendered years-long wait times to occupy new custom homes in many cases. While the pricing of the improved vacant property has generally held, transaction volume fell by 20% year over year.
If no other lessons have been learned over the last two years, any attempt at predicting what may come is a fool’s errand. Nevertheless, from the perspective of a brand-new year, historically tight supply combined with a captive audience of would-be purchasers would seem to indicate that robust market conditions will be here for some time to come.
