2022 Real Estate Market Report
North Lake Tahoe -Truckee
Residential Properties – Single Family Homes and Condominiums
Activity January through October 2022
Residential Sales Summary 2022
Total Residential Sales:
As you have likely heard, the real estate market has slowed significantly the last few months. Monthly sales numbers, measured in number of transactions, have fallen well behind historical averages. In October, there were 82 residential sales which is the lowest number of October sales in the last 10 years and just 56% of the 10 year average for the month (156 sales). Even if you remove the outlier COVID boom years, it’s still just 69% of the 10 year average for October transactions.
Despite the strong start to the year, year to date numbers are also starting to lag behind. 1,011 residences have sold from January through October which is the 2nd lowest for that period in the last 10 years (just beating the 1,008 sales in 2014). That is 78% of the 5 year average for the period and 83% of the 10 year average.
Despite the low number of transactions, homes that do sell are selling in a reasonable amount of time. The median number of days on market for homes sold in October was 34 (in line with pre-pandemic benchmarks).
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, 10-15% from the peak pricing (in Q1 2022) is a reasonable estimate. That said, rest assured that prices are still at a very healthy premium from where they stood in 2019. For the month of October the average residential sales price was $1.708 million and the median was at $1.067m (both numbers have been bouncing around month to month this year). For the first 10 months of the year, the average sales price was $1.684 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 October came in at an average of $1.898 million and a median of $1.25 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 moving into winter and inventory is coming down as it typically does at this time of year. For most of summer, the inventory of residences for sale had been buoying between 345 and 360. It has dipped down to 250 in mid November. Last year, at this time, there were about 150 residences actively for sale. However, in November 2019, the inventory was closer to 500. 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 94 new listings in October is the lowest October total in 10 years and just 69% of the 5 year average and 76% of the 10 year average for number for the month. For 18 consecutive months the number of new listings for that month has been below the 5 and 10 year averages. In each of those 18 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 73 (down from 90 last month). About 75 residences went into contract in October (down from 95 in September).
Current inventory represents a little over 3.3 months of supply relative to October 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 October, there were 60 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, 365 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, 382 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: 204 residences have sold over $2 million, representing 20% of sales. This includes 44 sales over $5 million, of which 13 are over $10 million, and 2 over $20 million. For the same period in 2021, 221 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 well below average activity in the second half of the year.
What lies ahead the rest of the year?
Low inventory will continue to be a big force on the supply side of the market. While inventory is nearly double what it was last year at this time, it is still only half of what we typically saw at this time of year in the pre-COVID benchmark years.
There are also significant questions about how strong demand will be through the end of the year. There are major variables like inflation, interest rates, stock market volatility, recession, the Russia-Ukraine War, short term rental regulations (call if you have questions!) that are adversely impacting demand.
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 winter.
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.
Sellers, keep in mind, this is still a much better time to be a seller than it was in 2019 (which seemed like a very healthy market at the time!). You can expect a similar amount of time on market, but much higher sales prices!
Buyers, keep in mind, this is the most balanced market we have seen in the last 2.5 years. 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