2022 Real Estate Market Report
North Lake Tahoe -Truckee
Residential Properties – Single Family Homes and Condominiums
Activity January through August 2022
Residential Sales Summary 2022
Total Residential Sales:
As you have likely heard, the real estate market has slowed significantly. Monthly sales numbers, measured in number of transactions, have fallen well behind historical averages. In August, there were 125 residential sales which is the 2nd lowest number of August sales in the last 10 years, and just 76% of the 10 year August average (165 sales). However, thanks to the strong start to the year, we are not too far off YTD averages. If you remove the 2 COVID year outliers (January – August 2020 and 2021 were both over 1,120 closed transactions) we are at 96% of the “non covid year” average. The 801 closed transactions YTD is the 3rd lowest number of YTD transactions in the 10 year period.
Homes that sold continued to sell quickly through August. The median days on market for closed sales was 18, which is up from 12 in July, but still well below historical averages. That said, the number will continue to increase and we expect it to approach 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 August the average residential sales price was $1.342 million and the median was at $955k (both numbers have been bouncing around month to month this year). For the first 8 months of the year, the average sales price was $1.681 million and the median was $1.15 million.
For single family homes the YTD average is at $1.918 million (up from $1.768 in the first half of 2021) with a median of $1.257 million (up from $1.2 million in the first half of 2021). The month of August came in at an average of $1.473 million and a median of $1.0 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 winding down on the summer season when we typically see the highest level of inventory on the market. Since the 4th of July weekend, the inventory of residences for sale had been buoying between 345 and 360, but has dipped down to 326 in mid September. Last year, at this time, there were about 180 residences actively for sale. However, in September 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 163 new listings in August is just 76% of the 5 year average and 83% of the 10 year average for number of new listings. For 16 consecutive months the number of new listings for that month has been below the 5 and 10 year averages. In each of those 16 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 132 (down from 140 last month). About 120 residences went into contract in August (down from 125 in July).
Current inventory represents a little over 2.7 months of supply relative to August activity. Historically any number below 5 months of supply is 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: Through august, there were 50 residential sales under $500k, representing 6% of total sales. In the same period in 2021, 9% of sales were in this range.
Mid-Range Market Sales $500,000 to $999,999: Year to date, 284 residences sold between $500,000 and $999,999, representing 35% 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, 301 residences have sold between $1m – $2m, representing 38% of total sales. For the same period in 2021, homes sold in this price range represented 33% of total sales.
Luxury Home Sales Over $2 Million: 166 residences have sold over $2 million, representing 21% of sales. This includes 36 sales over $5 million, of which 11 are over $10 million, and 1 over $20 million. For the same period in 2021, 183 homes sold over $2 million, representing 16% of sales.
What’s Going On Looking Forward?
The real estate market is definitely evolving rapidly. The extremely strong “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 as we head toward Q4.
What lies ahead the rest of the year?
Low inventory is still a big force on the supply side of the market. There are also significant questions about how strong demand will be through the end of the year. There are major variables like inflation, the stock market, recession, interest rates, the Russia-Ukraine War, short term rental regulations (call if you have questions!), and mother nature (fires, smoke, snow, etc), that are adversely impacting demand. We are very interested to see just how big an impact it is. We expect below “normal” (by pre COVID standards) activity, measured by number of transactions, through the end of the year. 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 (about 10% of listings have reduced their price each week for the last 3 weeks), 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