June, 2018 Tahoe-Truckee Market UpdateTMR Team, June 4, 2018 in Inventory, Market, Real Estate, Summer, Tahoe, Truckee
Despite being in the midst of the quiet season, real estate sales continue at a clip busier than is typical of the season. 168 properties are currently pending sale, 92 of which went into contract within the last 30 days.
While market conditions fluctuate based upon economic circumstances beyond the region, seasonality plays a meaningful role in the performance of real estate in the Tahoe area during cycles good and bad. The challenges of winter, including short days, difficult driving and seasonal leases often leave the market relatively constrained through the first two quarters of any given year. All things being equal, the latter two quarters will outperform the opening half of the year by about 40%.
Thus far, 2018 has been defined by historically tight supply contributing to a lesser volume of transactions which, in turn, have created upward pressure on values. To quantify, inventory has hovered around 3 months’ supply for much of 2018. Balance in this category is considered to be about 6 months’. This has resulted in a 1% reduction in year-to-date transactions over the same period last year but a 6.5% increase in median price throughout the region. As is often the case, tight supply impacts lower price points more dramatically which gives greater weight to higher-end listings. Correspondingly, average price has surged from $865,000 in 2017 to just over $1,100,000 year-to-date.
Lakefront property sales of $40m and $7.5m have driven this surge. The next 10 highest-dollar transactions have been homes in Martis Camp ranging from $4.4m – $8.8m. In fact, Martis Camp home sales already stand at 50% of 2017 full-year totals through just 5 months.
While market conditions have been extremely imbalanced for the several quarters, a glut of new offerings have been brought to market in the last 30 days nearly doubling the available supply. In total 263 new listings have been brought to market representing a 34% increase. This load brings the total inventory to 773 properties equal to 5 months’ supply. While still shy of the typical 6 month balance, this provides early summer consumers with a decent selection of product to view.
All of this adds up to market conditions prime for an active summer. Ample inventory, strong demand and quality product are a perfect formula to match the excellent summer seasons experienced in each of the last few years.