2022 Real Estate Market Report
North Lake Tahoe -Truckee
Residential Properties – Single Family Homes and Condominiums
Activity January through September 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 September, there were 126 residential sales which is the 2nd lowest number of September sales in the last 10 years (125 in 2014), and just 76% of the 10 year September average (165 sales). Even if you remove the outlier COVID boom years, it’s still just 83% of the 10 year average for September transactions. Q3 also saw the 2nd lowest number of sales in the last 10 years, coming in at 75% of the 10 year average (and 84% of the non COVID 10 year avg). 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 97% of the “non covid year” average. Still, the 929 closed transactions YTD is the 3rd lowest number of YTD transactions in the 10 year period.
Homes that sold continued to sell quickly through September. The median days on market for closed sales was 24, 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 September the average residential sales price was $1.336 million and the median was at $1.1m (both numbers have been bouncing around month to month this year). For the first 9 months of the year, the average sales price was $1.682 million and the median was $1.15 million.
For single family homes the YTD average is at $1.898 million (up from $1.768 in the first half of 2021) with a median of $1.250 million (up from $1.2 million in the first half of 2021). The month of September came in at an average of $1.373 million and a median of $1.155 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:
Summer is in the rear view mirror and inventory is coming down as it typically does in the fall. From 4th of July weekend through Labor Day, the inventory of residences for sale had been buoying between 345 and 360, but has dipped down to 295 in mid October. Last year, at this time, there were about 200 residences actively for sale. However, in September 2019, the inventory was closer to 600. 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 112 new listings in September is the lowest September total in 10 years and just 67% of the 5 year average and 74% of the 10 year average for number of new listings. For 17 consecutive months the number of new listings for that month has been below the 5 and 10 year averages. In each of those 17 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 90 (down from 132 last month). About 95 residences went into contract in September (down from 120 in August).
Current inventory represents a little over 3.1 months of supply relative to September 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 3 quarters, there were 54 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, 333 residences sold between $500,000 and $999,999, representing 36% 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, 355 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: 187 residences have sold over $2 million, representing 20% of sales. This includes 39 sales over $5 million, of which 12 are over $10 million, and 2 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 extremely strong “covid boom” real estate market is in the rearview mirror and, like a light switch, we have turned to below average activity in Q3. While YTD numbers are hanging in there with pre-covid activity levels, Q3 numbers fell well behind.
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!) 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 and into Q1 2023. Beyond that is more uncertain.
For the last month multiple offers on properties has become uncommon and bidding wars (5+ offers) have almost gone away. Price reductions are commonplace (about 10% of listings seem to reduce their price each week), and many seller’s are 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.
This is, by far, the most balanced market we have seen in the last 2.5 years. Buyer’s, you now have the following things working in your favor:
- The ability to negotiate price is back!
- The ability to inspect a property and have normal contingencies is back!
- The ability to negotiate repairs is 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