The remarkable momentum gathered by Tahoe – Truckee real estate through 2020 carried over into a record-setting first half of 2021.
The opening six months of any given year are typically quieter than the latter, yet this year 875 residential properties have transacted year-to-date exceeding the same period a year prior by 36%. More notably, price escalation and an increasingly premium buyer profile have driven the cumulative dollar volume of these transactions above $1 billion; the first time this threshold has ever been met in the first half of any year.
The local marketplace is as competitive as at any point in time with multiple bids becoming commonplace.
While the total number of listings brought to market this year is nearly identical to 2020, available supply feels impossibly tight having hovered around a single month of supply for much of the last year. Median time on market is an implausibly low 10 days year-to-date while the average sale is transacting at 104% of asking price. Buyer mentality continues to focus around “what will it take” rather than “what is it worth” understanding that real value is in the opportunity to gain the non-monetary benefits of owning property in this pristine mountain setting.
Even as global conditions return to a sense of ‘normalcy’, demand for mountain properties remains historically high. While the mountains delivered refuge in the most literal sense during months of quarantine, the lifestyle values are enduring whether as a primary or second home. As we look toward a new normal, a hybrid ‘co-primary’ home concept is emerging. The opportunity to untether from a traditional Monday – Friday office model is allowing for a deeper engagement in the local community in a way that traditional vacation homeownership never allowed for. Finding new trails, niche restaurants, and philanthropic pursuits in Truckee and Tahoe have allowed a new wave of consumers to assimilate as locals while maintaining a Bay Area wage, perhaps the optimal lifestyle choice for today’s consumers.
Demonstrating the imbalance of supply and demand, median price during the first half of 2021 rose 43% compared to the same period in 2020. More impacted by premium sales, average price climbed a staggering 60% over this period to just below $1,500,000. The number of transactions closing at prices greater than $1 million more than doubled from 146 to 388. Most notable, 8-digit sales have already eclipsed the largest ever 12-month period with 11 transactions greater than $10,000,000. For nearly the first time, these ultra-premium acquisitions include not only marquee Tahoe lakefront properties but also multiple sales in Martis Camp.
Joining the ranks of communities with rapidly escalating values and negligible standing inventory:
The current velocity of the real estate market will ultimately prove unsustainable, but few signs of erosion are present. Today’s consumer is well calibrated to the realities of the market; including a keen awareness of buying into a peaking market. Unlike the bubble years preceding the last recession, there is not rampant speculation over future values, nor does there appear to be great sensitivity to the threat of rising interest rates.
Rather, these consumers understand the quality-of-life benefit to living in the mountains and recognize that by waiting out a hot market, they are losing time spent in enjoyment.
The second half of any given year typically delivers double the transaction volume as summer shoppers merge with those buying in anticipation of winter. From the current vantage, only constrained supply will prevent this trend from continuing.