Leading the national trend of consumers fleeing metropolitan markets in search of suburban, rural and mountain settings, Tahoe-Truckee real estate has concluded its most productive 30-day period of all time.
Tahoe has forever been a haven for Northern Californians looking to escape a hectic city pace, if only for weekend-long respites. In recent years, advances in technology and transportation have enabled longer stays and more permanent residency. The events of 2020 have proven to be an enormous catalyst as hundreds of families have determined to lay a more permanent stake in the mountains.
July 2020 represented the highest number of residential transactions as well as dollar volume ever recorded. Over 300 residential closings beat the same month in 2019 by more than double and the previous month by over 35%. Previously, the most prolific month for real estate transactions was August 2017 when 213 properties changed hands. Similarly, the total dollar volume in July was over $333,000,000; the first time $300 million has ever traded in a single month.
The influx of buyers has driven inventory to historic lows. Just 387 residential properties are currently listed representing barely 1.5 month supply. With local residency at an all-time high, willing sellers are few and far between indicating that the supply shortage is likely to continue through summer.
The multitude of buyers outnumbering sellers is predictably driving prices upward at an astronomical rate. In July, the average residential sale price was $1,170,000; 43% higher than the same metric in 2019. Accordingly, median price rose to $765,000; a 22% increase from the prior year’s figure.
The remote nature of second home real estate typically creates a rhythm to sales that is slightly less frantic than in primary home markets. The urgency of this moment has created a new normal wherein properties are often selling above asking price within days of coming to market. Prices are now within 1% of asking on average and as much as 25% above in certain cases.
Remarkably, August appears poised to shatter these briefly held benchmarks with even higher transactions counts and sales volume. A marketable 385 properties are currently pending sale with close dates targeted for August. This includes many of the most marquee offerings throughout the region including select Tahoe lakefront properties, Martis Camp estate homes and the delivery of premium new product throughout Northstar, Old Greenwood, Gray’s Crossing, Schaffer’s Mill and Lahontan.
Numerous development projects are exhausting available inventory, closing out existing phases and accelerating the release of new product. Given the paucity of general supply, new inventory will be a precious commodity as an increasing number of consumers seek Tahoe.
Time will tell whether inventory or demand exhausts first. In addition to general economics, winter weather is likely to be an equalizing factor. The prospect of workplaces reopening, perhaps under greatly modified operations, as well as schools finding the right proper moment to reconvene will function to pull some number of consumers back down the hill.
Until that time, Tahoe will continue to be a safe haven for an ever greater number.