Coldwell Banker
2022 Real Estate Market Report
North Lake Tahoe -Truckee
Residential Properties – Single Family Homes and Condominiums
Activity January through November 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 November, there were 91 residential sales (up from 82 in October) which is the lowest number of November sales in the last 10 years and just 65% of the 5 year average (141 sales) and 68% of the 10 year average for the month (133 sales). In fact, 91 sales is just 85% of the next lowest month (107 sales in Nov of both 2013 and 2015).
Despite the strong start to the year, year to date numbers are also lagging behind. 1,102 residences have sold from January through November which is the lowest for that period in the last 10 years. That is 77% of the 5 year average for the period and 82% 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 November was 50 and 25 homes went into contract in 3 weeks or less.
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 November the average residential sales price was $1.427 million and the median was at $920k (both numbers have been bouncing around month to month this year). For the first 11 months of the year, the average sales price was $1.663 million and the median was $1.11 million.
For single family homes the YTD average is at $1.873 million (up from $1.771 in the 2nd half of 2021) with a median of $1.235 million (up from $1.171 million in the 2nd half of 2021). The month of November came in at an average of $1.611 million and a median of $1.015 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:
Active Listings:
We are into the winter season and inventory is dropping 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 220 in mid December. Last year, at this time, there were about 120 residences actively for sale. However, in December 2019, the inventory was closer to 430. 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 71 new listings in November is the lowest November total in 10 years and just 78% of the 5 year average and 75% of the 10 year average for number of new listings for the month. For 19 consecutive months the number of new listings for that month has been below the 5 and 10 year averages. In each of those 19 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 67 (down from 73 last month). About 60 residences went into contract in November (down from 75 in October).
Current inventory represents a little over 3.7 months of supply relative to November 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 November, there were 67 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, 411 residences sold between $500,000 and $999,999, representing 37% 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, 406 residences have sold between $1m – $2m, representing 37% of total sales. For the same period in 2021, homes sold in this price range represented 34% of total sales.
Luxury Home Sales Over $2 Million: 218 residences have 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. 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 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 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 5-10% 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, to continue 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 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 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