Matty’s Minute: A July Market Update
Listed by: Shane Jones/Tahoe Mountain Realty
Real estate activity in the Tahoe Truckee region followed a deep V-shaped trajectory through the first half of 2023. However, historical data has consistently demonstrated that the latter half of a year brings about twice as many sales as the initial six months. Preliminary indicators of summer performance lend support to the notion that the latter half of 2023 may exceed this trend.
After the soaring volume that defined 2020 through the first half of 2022, the final months of last year showed a market that had run out of both inventory and energy. Q1, 2023 followed this path as transaction volume hit all-time lows, ultimately bottoming out in April once winter rendered the sparse available inventory virtually un-showable amid historic snowfall.
The merciful end of ski season kicked off the annual surge of spring listings compounded by a segment of homeowners anxious to not endure another such winter. Even the slightest loosening of supply stimulated increased activity such that Q2 ended with nearly 50% more transactions than the preceding quarter. June was the first month in 2023 to record over 100 residential transactions and $150,000,000 in sales volume.
Despite wild fluctuations in the number of transactions, prices held steady through early 2023. Average and median prices each fell just 6% from historic highs in 2022 maintaining levels well above the benchmarks set in 2020 and 2021 as sellers proved patient and almost entirely without distress. Average days on market crept up to 55, higher than the 38 from 2022 but still dramatically below historic timelines. The average sale deviated just 3% from asking price; absolutely normal for any time period outside of 2020-2022. Listings offered below $1,000,000 in Truckee have continued to reliably generate multiple offers driving closing at 101% of asking price.
Certain areas and product types have outperformed the market where supply has been available. Gray’s Crossing, Schaffer’s Mill and Martis Camp each sold approximately 50% 2022’s 12-month total. Other market segments that are more supply constrained saw little activity including Tahoe lakefronts with but one transaction.
The counterpoint to surging demand for residential property is vacant land for which demand has cooled dramatically. Construction costs remain on an inflationary curve while finished home values have leveled off; an equation that leaves all but the largest projects with negative equity upon completion. Sellers of vacant land appear equally patient to home sellers, thus prices have similarly held steady despite transaction volume being just 38% of the same period last year.
Heading into summer, the number of listings has more than doubled from the low point of spring though 400 listings is exceptionally low by historical standards. At the pace of sales experienced in H1, 2023, this represents almost exactly 6 months’ supply, a perfectly balanced market. However, history has shown that the second half of any given year will deliver double the quantity of sales as the first six months. Early returns on summer activity validate the second half of 2023 may outperform this trend significantly.
The Tahoe Truckee region in summer is a haven for adventure, relaxation, and connection with nature and family. Best wishes for a happy and enjoyable summer season in Lake Tahoe.
As always, please contact me for a deeper dive into current market dynamics for your community and/or to schedule a property tour or a listing consultation today.
-Matty