As you have likely heard, the real estate market is evolving. Despite the uncertainty, we have seen a “normal” number of sales in the Tahoe/Truckee residential real estate market.
Homes that sell continue to sell quickly. The median days-on-market year-to-date for sold properties sits at nine days (and just six days for closings in June).
For the first half of 2022, there were 572 residential sales, or 95% of the 5-year average and 98% of the 10-year average. In June, 114 residences sold, which skews farther from the 5 and 10-year averages for the month (139 and 128, respectively); however, it’s right at the average for the last 10 “non-COVID” years (115 sales).
Median and Average Sales Prices: Sales prices are still near highs, but there are some signs of weakness. Seller’s who were a little too optimistic when they came on the market are making price reductions, and, for the first time in 2 years, buyers can consider making offers below asking in some circumstances. For the month of June, the average residential sales price was $1.4M and the median was at $1.1M. For the first half of the year, the average sales price was $1.7M and the median was $1.2M.
For single-family homes, the YTD average is at $2.028M (up from $1.768 in the first half of 2021) with a median of $1.3M (up from $1.2M in the first half of 2021). The month of June came in at an average of $1.49M and a median of $1.15M. Comparing those numbers to 2019 (the last “normal” year before covid) is incredible. For the first half of 2019 the average single-family home sale was $1.2M and the median was at $755,000. That’s a 64.5% increase on the average and an 82.9% increase on the median.
Active Residential Inventory:
Active Listings:
We are into the time of year when we typically see the highest level of inventory. We are up to 347 residences actively for sale (291 single-family homes and 56 condos), after bottoming out at around 80 in March. Last year, at this time, there were about 170 homes actively for sale. That said, inventory is still at the lowest levels we have seen historically prior to COVID (Around 55% of the average for the five years prior to COVID and 40% of the 10-year average) for this time of year.
The 205 new listings in June mark the second lowest June total in 10 years. For 14 consecutive months, the number of new listings for that month has been below the 5 and 10-year averages. In each of those 14 months, the number of new listings has been among the three lowest totals for that month in the last ten years.
Current Pending Sales: The number of pending sales is at 136 (up from 120 last month). About 90 residences went into contract in June (down from 110 in May).
Current inventory represents a little over 3.85 months of supply relative to June activity. It’s not the red hot seller’s market we saw the last 2 years, but it’s still not a bad time to be a seller!
For the first half of the year, there were 37 residential sales under $500k, representing 6% of total sales. In the same period in 202 = 11% of sales were in this range.
Mid-Range Market Homes $500,000 to $999,999:
Year to date, 186 residences sold between $500,000 and $999,999, representing 33% of total sales. For the same period in 2021 = 42% of sales were in this price range.
High End Homes $1,000,000 to $1,999,999:
Year to date, 221 residences have sold between $1M – $2M, representing 39% of total sales. For the same period in 2021 = homes sold in this price range represented 32% of total sales.
128 residences have sold over $2M, representing 22% of sales. This includes 25 sales over $5M, of which 11 are over $10M, and one over $20M. For the same period in 2021 = 123 homes sold for over $2M, representing 16% of sales.
…..What’s Going on in the Tahoe-Truckee Market Looking Forward?
The real estate market is definitely evolving rapidly. It seems that the extreme “covid” activity has eased and statistically, things are trending to a more “normal” level of activity. If you compare activity YTD to 2021, it gives the appearance that things are quite slow. However, if you eliminate the COVID bump and compare only to years 2019 and earlier, it gives the appearance that things are fairly normal, to slightly more active than normal (especially if you look at the low number of days-on-market for sold properties).
Relatively low inventory is still a big force in the market. However, there are significant questions about how strong demand will be through the year’s second half. There are major variables like inflation, a possible recession, interest rates, the Russia-Ukraine War, short-term rental regulations (call if you have questions!), and mother nature (snow, fires, etc), that is going to have an impact on demand. We are very interested to see just how big an impact it is. We expect “normal” (by pre-COVID standards) activity, measured by the number of transactions through Q3. Beyond that is more uncertain. For the last month, multiple offers on properties have become less common, and bidding wars (5+ offers) have almost gone away.
Sellers are still in the driver’s seat, but buyers have some real leverage for the first time in 2 years. Buyers, you now have the following things working in your favor:
- The ability to negotiate price is coming back!
- The ability to inspect a property and have normal contingencies is coming back!
- The ability to negotiate repairs is coming back!
- Yes, interest rates are climbing, but if they continue to climb, you will be glad you locked in now. If/when they do reverse course, you can refinance to take advantage!
