2022 Real Estate Market Report
North Lake Tahoe -Truckee
Residential Properties – Single Family Homes and Condominiums
Activity January through December 2022
Residential Sales Summary 2022
Total Residential Sales:
They say the only constant in life is change, and the real estate market has embodied that over the last couple years. After a 2 year COVID Boom, 2022 was a year for the market to correct. While the year started off with one last surge, it slowed in Q2 and and drifted into 10 year lows for the number of closed transactions in Q3 and Q4. The headwinds were numerous, but included inflation, interest rates, stock market volatility, recession, the Russia-Ukraine War, and short term rental regulations (call if you have questions!).
For the year, the total number of residential transactions decreased by 30% YOY and ended up 25% below the 5 year average and 21% below the 10 year average. It was the lowest number of transactions in the last 10 years, coming in 7% lower than the next lowest year (1,238 sales in 2014).
Median and Average Sales Prices: The median and average price for the year actually went up compared to 2021, but that doesn’t tell the whole story. Sales prices have fallen off from Q1 highs. The Q1 median sales price for single family homes was $1.38m, but the Q4 number came in just above $1.1m representing a 20% drop. For condos, the Q1 median was at $770k, with Q4 coming in at $600k representing a 22% drop.
That said, prices are still at a very healthy premium from where they stood in 2019 (before COVID). For Q4 2022 the average single family sales price was $1.66 million and the median was at $1.1m. For Q4 2019 the average sales price was $1.03 and the median was $739k. That’s a 61% increase on the average and 49% on the median.
For condos Q4 2022 showed an average of $707k and a median of $600k. in Q4 2019 the average was $543k and the media $418k. That’s a 30% increase on the average and 44% on the median.
Active Residential Inventory:
We are in the heart of winter, when inventory hits annual lows. There are 180 residences currently on the market. Last year, at this time, there were about 80 residences actively for sale, but in 2019 the number was closer to 450. 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.
For 20 consecutive months the number of new listings for that month has been below the 5 and 10 year averages. In each of those 20 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 62 (down from 67 last month). About 50 residences went into contract in December (down from 60 in November).
Current inventory represents a little over 3.6 months of supply relative to December 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: In 2022, there were 70 residential sales under $500k, representing 6% of total sales. In 2021, 8% of sales were in this range.
Mid-Range Market Sales $500,000 to $999,999: For the year, 429 residences sold between $500,000 and $999,999, representing 37% of total sales. In 2021, 42% of sales were in this price range.
High End Home Sales $1,000,000 to $1,999,999: 430 residences have sold between $1m – $2m, representing 37% of total sales. In 2021, 558 homes sold in this price range representing 34% of total sales.
Luxury Home Sales Over $2 Million: 226 residences sold over $2 million, representing 20% of sales. This includes 46 sales over $5 million, of which 15 are over $10 million, and 2 over $20 million, and 1 over $40 million. In 2021, 265 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 turned to well below average activity in the second half of the year.
What lies ahead as we move into 2023?
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 below half of what we typically saw at this time of year in the pre-COVID benchmark years.
There are significant questions about how strong demand will be. Major variables like inflation, interest rates, stock market volatility, recession, the Russia-Ukraine War, short term rental regulations (call if you have questions!) continue to adversely impact demand.
Multiple offers on properties has become uncommon and bidding wars (5+ offers) have almost gone away. Price reductions are commonplace (about 5-10% of listings seem to reduce their price each week), and many seller’s are withdrawing or cancelling their listings as we have experienced a very wet start to winter.
We expect below “normal” (by pre COVID standards) activity, measured by number of transactions, to continue in Q1 2023. Beyond that is more uncertain, but a strong winter can spur stronger activity (especially once the snow melts).
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 3 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 Realty 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