2022 Real Estate Market Report
North Lake Tahoe -Truckee
Residential Properties – Single Family Homes and Condominiums
Activity January through July 2022
Residential Sales Summary 2022
Total Residential Sales:
As you have likely heard, the real estate market is evolving. Monthly sales numbers, measured in number of transactions, have fallen well behind historical averages. In July there were 103 residential sales which is just 71% of the July average for the last 10 years (145 sales). Even if you remove the 2 COVID year outliers (the last 2 years July came in at 294 and 192 sales), July 2022 is still at 85% of the average for the previous 10 years (121). Despite the strong start to the year, the YTD numbers are also starting to fall behind. Through July there were 676 residential sales, which is 93% of the 10 year average (but only slightly below the average of 685 if you eliminate the 2 COVID outliers).
Homes that sold continued to sell quickly through July. The median days on market was 12, for homes that sold in July. That said, this number is increasing for closed residential sales in August and we expect it to start approaching the pre-COVID median which was in the low 30s.
Median and Average Sales Prices: Sales prices have fallen off from highs. No 2 homes, nor locations, are alike in this area, so it’s always hard to tell how far prices have moved. But, rest assured that prices are still at a very healthy premium from where they stood in 2019. For the month of July the average residential sales price was $1.735 million and the median was at $1.155 million (both numbers actually up from June but have been bouncing around month to month this year). For the first half of the year, the average sales price was $1.743 million and the median was $1.2 million.
For single family homes the YTD average is at $2.006 million (up from $1.768 in the first half of 2021) with a median of $1.3 million (up from $1.2 million in the first half of 2021). The month of July came in at an average of $1.909 million and a median of $1.225 million. Comparing those numbers to 2019 (the last “normal” year prior to covid) is incredible. For the first half of 2019 the average single family home sale was $1.233 million and the median was at $755,000.
Active Residential Inventory:
We are into the summer season when we typically see the highest level of inventory for the year. Since the 4th of July weekend, the inventory of residences for sale has been buoying between 345 and 360. Last year, at this time, there were about 180 residences actively for sale. However, in August 2019, the inventory was closer to 650. Looking at long term numbers, inventory is still at the lowest levels we have seen historically prior to COVID (Around 60% of the average for the 5 years prior to COVID and 40% of the 10 year average) for this time of year.
The 187 new listings in July marks the lowest July total in 10 years. For 15 consecutive months the number of new listings for that month has been below the 5 and 10 year averages. In each of those 15 months the number of new listings has been among the 3 lowest totals for that month in the last 10 years.
Current Pending Sales: The number of pending sales is at 140 (up from 136 last month). About 125 residences went into contract in July (up from 96 in June).
Current inventory represents a little over 2.9 months of supply relative to July activity. Historically any number below 5 months of supply is still considered a seller’s market. But, this is a much more balanced market than what we saw the last 2 years, when months of inventory consistently hovered around 1.
Sales Under $500,000: For the first half of the year, there were 41 residential sales under $500k, representing 6% of total sales. In the same period in 2021, 10% of sales were in this range.
Mid-Range Market Sales $500,000 to $999,999: Year to date, 269 residences sold between $500,000 and $999,999, representing 33% of total sales. For the same period in 2021, 42% of sales were in this price range.
High End Home Sales $1,000,000 to $1,999,999: For the period, 264 residences have sold between $1m – $2m, representing 39% of total sales. For the same period in 2021, homes sold in this price range represented 32% of total sales.
Luxury Home Sales Over $2 Million: 148 residences have sold over $2 million, representing 22% of sales. This includes 32 sales over $5 million, of which 11 are over $10 million, and 1 over $20 million. For the same period in 2021, 155 homes sold over $2 million, representing 16% of sales.
What’s Going On Looking Forward?
The real estate market is definitely evolving rapidly. It seems that the extreme “covid” activity is in the rearview mirror and, statistically, things are trending to a more “normal” level of activity. If you compare activity YTD to 2021, it gives the appearance that things are quite slow. However, if you eliminate the COVID bump and compare only to years 2019 and earlier, it gives the appearance that things are fairly normal, but slowing.
What lies ahead the rest of the year?
Relatively low inventory is still a big force in the market. However, there are significant questions about how strong demand will be through the 2nd half of the year. There are major variables like inflation, possible recession, interest rates, the Russia-Ukraine War, short term rental regulations (call if you have questions!), and mother nature (snow, fires, etc), that are going to have an impact on demand. We are very interested to see just how big an impact it is. We expect “normal” (by pre COVID standards) activity, measured by number of transactions, through the 3rd quarter. Beyond that is more uncertain. For the last month multiple offers on properties has become less common and bidding wars (5+ offers) have almost gone away. Price reductions are commonplace, and we anticipate many seller’s withdrawing or cancelling their listings as we head into fall and winter. My hunch is the slowing demand will be matched by limited supply, making for a quiet winter.
Sellers are still in the driver’s seat but buyers have some real leverage for the first time in 2 years. Buyer’s, you now have the following things working in your favor:
- The ability to negotiate price is coming back!
- The ability to inspect a property and have normal contingencies is coming back!
- The ability to negotiate repairs is coming back!
- Yes, interest rates are climbing, but if they continue to climb you will be glad you locked in now. If/when they do reverse course, you can refinance to take advantage!
Contact Me Today to Find Out More about the Opportunities Available in the North Lake Tahoe-Truckee Market.
Note: Data on this page is based on information from the Tahoe Sierra Board of Realtors, MLS. Due to MLS reporting methods and allowable reporting policy, this data is only informational and may not be completely accurate. Therefore, Coldwell Banker Residential Brokerage does not guarantee the data’s accuracy. Data maintained by the MLS may not reflect all real estate activity in the market. CA-BRE License # 01908304