While Memorial Day is the ceremonial opening to summer, it generally delivers a false start for real estate sales in the Tahoe-Truckee market. Although the end of winter to Memorial Day typically marks the most significant period for new listing activity.
Over the past six weeks, residential inventory has nearly doubled, peaking just below 300 properties during the holiday weekend. While sellers were broadly immodest in asking prices, about 10% was absorbed in the last week. This indicates that while the local market may be changing, it remains dramatically in the seller’s favor. To the extent that any sales activity is an indication of the market outperforming the seasonal norm, the recently added supply is being favorably received by awaiting buyers.
May 2022 saw a meaningful drop in the number of sales as compared to an overwhelming 2021 but handily outperformed historic averages for this period despite limited options. With nearly $170,000,000 in total sales volume spread over just over 100 transactions, average and median prices show no sign of falling in the near term.
In fact, the median price has risen at a rate higher than the average price year-to-date, 26% to 23%. This ratio is typically inverted in the Tahoe market given the lavish prices that command the loftiest segments of the market. In 2022, despite a record pace for $10,000,000+ transactions, rank and file properties are appreciating at a greater rate than premium properties achieving a record $1,200,000 median home price.
With a little more than 6 weeks until Tahoe’s summer season begins in earnest, the supply should continue to creep upward, albeit at a rate more gradual. Even if supply were to reach 400 residential listings – a 300% increase from the winter low – that would only equal about 25% of a full year’s transaction. In other words, 400 listings would be about a 3 month’s supply. Balance in the Tahoe market is generally 6 month’s supply, which would indicate that prices should continue pushing upward for the moment.
While the threat of recession, rising interest rates, and office re-openings among other potential disruptions certainly exist, it appears that the Tahoe market is still calibrating to a new reality in which workplaces no longer carry the burden of full-time presence. Those experiencing the freedom of working from non-traditional spaces are continuing to seek value in mountain living driving outsized demand for our idyllic region.
