October continued to showcase a market transitioning away from the hyperactive pandemic period and back to a more recognizable and rhythmic market of years past.
October closed with 90 sales, a sharp decline from October 2021’s performance of 131 sales. The average Day on Market (DOM) is up 86% from this time last year. I hear a lot of talk about the increase in price reductions and that’s a legitimate consumer observation, as 44.4% of October 2022 sales had at least one price reduction, relative to October 2021 with a mere 11.4%.
Currently, there’s only been 1,137 transactions in 2022, with another ~110 contingent or pending, a stark reduction even compared to pre-pandemic years:
The spike in price reductions, DOM, and decrease in total transactions are all symptoms of larger market metrics, some quantifiable and some just simply observed in real-time.
A decrease in buyer demand and consumer confidence is no surprise, given the daily barrage of negative real estate headlines claiming that the sky is falling. Indeed the 30-year fixed has more than doubled since the start of the year, national inflation remains stubborn, it’s an election year, and the equities market has been turbulent.
However, the Truckee – Tahoe market has historically been far less sensitive to those factors, relative to, for example, primary housing markets in the mid-west and south. Furthermore, Truckee – Tahoe homeowners now have a tremendous amount of equity built into their homes, so it is not likely that there will be any sort of distressed position requiring them to sell out of desperation.
Traditionally, winter marks a quiet time for the Tahoe market, and I see that occurring this winter due to waning buyer demand and low inventory. For context, 2022 currently has only had 4,175 active listings hit the market, while the average for pre-pandemic years (2014-2019) was 6,800.
The average asking price still remains at an all-time high at $1,651,188, but as a sign of a market shifting away from sellers, the average selling price is lower at, $1,642,421. Home’s going into contract below asking and with contingencies? That wasn’t even feasible a year ago, but now that’s an achievable reality.
