July, 2020 Tahoe-Truckee Market UpdateTMR Team, July 6, 2020 in
Events of a global scale have taken Tahoe-Truckee real estate on a dramatic ride throughout the first half of 2020. These results offer only a snapshot in time of a story that is still being written.
2020 began with unusually strong market activity posting year over year gains through much of the first quarter. A late arriving winter and typical election year malaise did not dampen enthusiasm for resort real estate. Upon receipt of shelter-in-place instructions mid-March, activity ground to a full stop. This halt in real estate purchases did not manifest over a full 30-day period until May which saw results more than 25% worse than the prior year.
Nevertheless, expressions of interest surged over this period as consumers sought Tahoe real estate as a quality-of-life improvement once the realities of remote work and schooling became apparent. Absent the typical distractions of spring, these expressions of interest became kinetic activity creating a frenzied market. The sheer volume of transactions is evident in results from June, 2020 during which time 201 residential transactions closed escrow. The threshold of 200 closings in a single month has only been eclipsed two other times ever demonstrating the overwhelming demand for mountain property in this moment.
While these results have been extreme in their polarity, the net result is a 6-month period virtually identical with the year prior as measured by transaction volume and median price. Nonetheless, these results only reveal the early chapters of Tahoe-Truckee real estate in 2020. Market velocity has only intensified in recent weeks with 435 properties currently pending sale. As inventory has been absorbed creating greater scarcity, multiple bids have become the norm driving prices well above asking price in many situations. As results from July become available, we expect to see prices climb aggressively through most market segments.
The current exuberance for Tahoe-Truckee real estate inevitably has elements of irrationality in it as the sentiment of buyers has shifted from “what’s it worth?” to “what’s it going to take?”. Many consumers have expressed the intention to call the region home on a primary basis, enrolling in schools, and engaging with the community in ways deeper than has been typical. Similarly, many have expressed desire to interact with their property and the region on an extended second home basis that transcends the typical Friday – Sunday visitation pattern drawn in by the healthy, lower density mountain lifestyle is an appealing antidote to everyday life in urban and suburban communities.
With so many homeowners in the region during this extraordinary time, willing sellers are becoming increasingly few and far between. The quantity of buyers is becoming exponentially greater than the available supply which should indicate, absent events well beyond our control, increased upward pressure on pricing. Naturally, there could be a reactionary event should health or economic conditions deteriorate.
The narrative of Tahoe-Truckee real estate has many chapters yet to be told. As the preeminent brokerage in the region, we are committed to keeping you constantly informed on the status of the real estate market.