June - 2019 Tahoe-Truckee Market Update

On its surface, the Tahoe-Truckee region has lagged behind the performance of 2018 by meaningful amounts. When heavy snowfall caused road closures throughout much of February, many would-be real estate consumers were forced to delay purchasing decisions creating a fairly sizeable Q1 lull for real estate transactions. Inevitably, some of these visits were perishable, lost until next winter while others were simply deferred into Q2. In May, total residential transactions trailed the previous year by 10% while average price fell by a more meaningful 15%. Conversely, median price rose 3% giving a clue to some statistical aberration that has skewed the overall market data.

A side-by-side comparison of May, 2018 vs May, 2019 shows the variance to be entirely within the community of Martis Camp. Martis Camp has been the goliath of Tahoe-Truckee real estate accounting for up to 25% of the region’s total sales volume in recent years. In fact, Martis Camp had eclipsed Tahoe lakefront property as the bell weather for luxury in the region measured in both the total number of premium transactions and the average sales price over much of the last decade.

In May, 2018, Martis Camp saw 8 total transactions accounting for $37,618,000. Zero transactions closed in that community in May of this year. When adjusted to omit Martis Camp transactions, an identical number of transactions closed year over year. The total dollar volume from these sales is 33% higher in 2019 compared the previous year while average price has risen by 25%.

This begs the question as to whether this 30-day period represents a shifting trend or is simply an anomaly in the otherwise storied performance of Martis Camp. Historically, May is a meager period for closings given the lack of buyer activity in late spring. As with the rest of the Tahoe-Truckee market, activity in Martis Camp will pick up in summer and reach its peak in early fall before tapering into winter. Current inventory is modest with 19 available properties; approximately equal to the average time on market over the last 12 months indicating a supply constrained micro-market.

Filling the void, shoppers found greater value in Tahoe Donner which produce 24 sales to just 19 in May 2018 as well as Lahontan and Gray’s Crossing which each saw 2 transactions against zero during the same period in 2018. In each of these communities, new homes were available for $500 and $800 per square foot respectively offering fresh product in thriving communities.

In a typical year, late May often produces the vast majority of new inventory in anticipation of the summer selling season. Having emerged from a winter that was anything but typical, the rush of new listings may be deferred until the weather inevitably turns more cooperative. This may result in a less bulky start to the summer and fewer days on market as inventory is introduced closer to the period in which homes typically sell.

Katie Tyler

ktlaketahoe.com

CA BRE 01442453
NV 0186747

c 530 277 1012 

May 2019- Tahoe-Truckee Market Update

Q2 is typically the period during which Tahoe real estate begins to gather momentum. While the early months of 2019 were productive for the region, overwhelming snowfall and limited access deferred numerable purchases into later months.

April saw the first 30-day period this year wherein residential transactions topped three digits. 109 home sales bested the same period in 2018 by 10% though median priced dropped from $749,000 to $650,000. The latter statistic is more reflective of an exceptional number of high end transactions both at Lake Tahoe and within Martis Camp last year than a major regression of value regionally.

As has been the case throughout much of 2019, the distribution of real estate sales has been over a wider spectrum of communities. In April alone, communities with sales over $1,000,000 included Alpine Meadows, Kings Beach, Gray’s Crossing, Glenshire, Northstar, Tahoe City and Tahoe Donner. Martis Camp saw but one closed transaction versus four in April, 2018.

In many ways, 2018 was an exceptional year for Tahoe real estate defined by an extraordinary number of mega-transactions. 7 transactions exceeded $10,000,000 including a number of extraordinary lakefront sales of $10,000,000, $22,000,000, $24,000,000 and $40,000,000 in addition to 47 home sales in Martis Camp between $3,000,000 - $12,000,000.

After a brief lull to begin the year, 2019 appears to have equally strong demand for luxury real estate with 82 total sales greater than $1,000,000 compared to 87 over the same period a year ago.

Similar to last year, the Tahoe market has been starved of quality supply. Spring typically delivers much of the year’s inventory during May and June, once snow has abated and in anticipation of the busy summer shopping season. Recent weeks have proved this will once again be the case as 187 new properties have come to market in the last 30 days. While this inflates the number of available listings by more than 25%, the market remains titled in the favor of sellers at 4.5 months’ supply. While more product will inevitably come to market through Memorial Day, the listing season may be elongated as higher elevation properties continue to melt out through spring.

As inventory comes to market, another trend appears to be gaining speed. Vacant land offerings are increasing while absorption slows reflecting the increasing disparity between construction costs and property values. Because most consumers are unable to build a home for equal or lesser cost than the value of the home, demand (and thus value) for underlying land falls. Year to date, 46 residential homesites have traded hands. This compares to 104 during the same period a year ago (in fairness, a low snow year making shopping more viable for half the year), and 69 in 2017 (an equally robust year for snowfall). 363 homesites are available for sale while just 260 transacted in the previous 12 months; nearly 17 months’ supply.

Correspondingly, the new homes with modern aesthetic and quality finish that are in such high demand will become increasingly difficult to find and more competitive to acquire. Homes built in 2018 or 2019 sold in an average of 49 days at 99% of their asking price. Older property saw nearly double the time on market and double the discount from asking price over the last 12 months.

In summary, we appear ready to launch into another spring and summer of promising real estate activity throughout the Tahoe Truckee region. We look forward to keeping you updated on real estate activity and the incredible lifestyle that accompanies.

Katie Tyler

ktlaketahoe.com

CA BRE 01442453
NV 0186747

c 530 277 1012 

March 2019 - Tahoe-Truckee Market Update

Abundant snowfall has impaired the ability of many would-be consumers to visit the region deferring purchasing decisions to spring. This may cause a slower than usual March; a time when winter sales often find their greatest stride before a shoulder season lull.

Regardless, large snowfall typically casts a prominent light on slopeside real estate. Northstar currently shows 6 properties pending sale including 3 in the Mountainside neighborhood. Squaw Valley and Alpine Meadows add 5 and 2 pending sales respectively.  With a long spring assured, ample time will exist for spring skiing and real estate tours alike. 

Year-to-date, the 2019 market correction has been a gentle one for the Tahoe-Truckee region. The total number of transactions has been almost identical to the same period in 2018 despite enduring polar opposite winter conditions. Similarly, median price is within .6% of the same period last year while inventory remains modest at 3.5 months’ supply.

Notable among transactions recorded in February 2019 is the geographic distribution, or lack thereof, when compared to last February.

2019 premium transactions include homes in Martis Camp (4; $3,999,535 - $6,700,000), Lahontan (4; $2,250,000 - $4,750,000), Northstar (2; $1,870,000 - $2,935,000) plus Squaw Valley, Tahoe Donner and other residential areas of Truckee. Lakeside homes are not represented above $1 million but for a single transaction, the 15^th largest in the region for the month. While it is not uncommon for lakeside interest to peak in summer months, the extremity of this data set is remarkable.

In contract, last February saw 9 transactions greater than $1 million in lakeside communities contrasted by 3 in Northstar, and one in each of Lahontan, Martis Camp, Tahoe Donner and Alpine Meadows.

The chart below shows the ratio of sales in Truckee based communities versus those in the Tahoe Basin (California; North and West Shores).

While more product exists in Truckee, the chart shows a strong progression toward premium purchases in newer communities.  

This phenomenon is the continuation of a gradual evolution whereby newer, highly amenitized communities are valued at a significant premium over dated, though classically designed, Tahoe product. In addition to contemporary homes, the explosion in popularity of jet travel to and from the Truckee airport has been a boon for those communities most proximate including Martis Camp, Lahontan, Schaffers Mill, Northstar, Old Greenwood and Gray’s Crossing.

Katie Tyler

ktlaketahoe.com

CA BRE 01442453
NV 0186747

c 530 277 1012 

Year End Market Update - 2018

In 2018, real estate in the Tahoe Truckee region capped a bull market streak dating back to Spring, 2011 with highest ever annual figures for total dollar volume, average price and quantity of transaction above $1 million and $10 million.

Inspired by a record number of premium transactions, the region totaled just under $1,700,000,000 in real estate sales, a number greater than any single year in history. 386 transactions exceeded $1 million a record for both the total quantity and, at 23%, the share of all sales in the region. At the market’s highest reaches, 7 properties generated eight-digit sums including 4 different properties on Tahoe’s West Shore that traded above $20,000,000.

These exceptional properties delivered the first ever annualized average price of over $1,000,000. This 22% increase is moderated by a 7.5% gain in median price, more reflective of the performance of real estate across all classes.

While reaching new heights, the market clearly hit a saturation point showing an 8% regression in the total number of units sold.  While this slowing was undoubtedly attributable to a shortage of inventory; particularly in entry-level price points; early in the year, inventory has stabilized slightly to 4 months’ supply. While this figure is higher than at the start of 2018, it is the second lowest supply available to start a year on record.

Attempting to normalize 2018 results absent lakefront and other premium property sales reveals a more sustainable environment with certain communities showing gains: Martis Camp, Lahontan, Old Greenwood, and Northstar. While other communities including, Gray’s Crossing and Tahoe Donner, maintained gains realized in previous years.

To expect such results to continue would be disingenuous. As stated above, the total number of transactions have moderated while available supply has crept upward. Some measure of cooling would ultimately be healthy for a market wherein appreciation has outpaced inflation and other core metrics for a prolonged period. Unlike a decade ago, there is neither the rampant speculation nor egregious debt that had a spiraling effect. In fact, certain conditions now exist that may safeguard against a meaningful backslide including tremendous demand for nightly rentals that offer a meaningful offset to carry costs. Even the Great Recession did not dim the desire for Northern Californians to spend time in the mountains keeping transient demand healthy.

Even the slightest deceleration in the market could cool runaway construction costs; a condition that has dampened land values and restrained creation of new product below the market’s premium reaches. In a market starved for new, highly-amenitized sub-premium homes, this could have a stimulating effect that benefits consumers in all price points.

As innovation fuels wealth creation in Silicon Valley and throughout Northern California, easily accessible second homes will always have value. As has always been the case, Tahoe will continue to be the Sierra playground for generations to come.

Katie Tyler

ktlaketahoe.com

BRE 01442453

c 530 277 1012 

PJ's Summer Concert Series

PJ’s summer concert series kicked off this week and will continue every Tuesday evening through September 4^th from 5:30PM-7:30PM.  Located on the lawn outside of PJ’s restaurant at Gray’s Crossing, the setting is unreal with open grass seating and huge mountain views as a backdrop. It is easy to see why these concerts have become a summer tradition in Truckee.

Seating options include first-come-first-serve space for blankets and chairs on the lawn, or reservations are welcome for those who would like a table dining experience while enjoying the music. For those on the lawn, there are walk up food options available for purchase including burgers, hot dogs and sandwiches along with a full bar. Table reservations will enjoy a specialty BBQ menu and buffet that includes PJ’s signature ribs, chicken, salads, desserts and more. Reservation dining can be booked in advance and usually fills up fast.

Next Tuesday, look for Peter Joseph Burtt and The Kingtide on the stage at PJ’s. Burtt’s music draws on influences from time he spent studying and playing with musicians in Africa, and much of his music is played on traditional instruments like the 26 stringed kora. Look for well-known local acts on the calendar as well such as the Dead Winter Carpenters, The Serina Dawn Band, and everyone’s favorite: Ike and Martin.

Sitting on the grass, enjoying breathtaking views and music on a summer evening is pretty perfect. PJ’s is the place to be this summer to celebrate long, gorgeous Tahoe summer days.

Photo courtesy of Tahoe Mountain Club. 

Katie Tyler

BRE 01442453

c 530 277 1012

May 2018 - Truckee-Tahoe Market Update

The first tangible proof of an apparent trend for the Tahoe Truckee real estate market became apparent in April, 2018. Due to an exceptional shortage of inventory, the volume of transactions dropped significantly when compared to the same month in previous years. Conversely, what property did transact showed an extreme bias toward the premium end of the market driving average price up substantially.

While the inventory shortage has been apparent going back to the 4^th quarter of 2017, momentum in the market drove the total number of transactions to numbers slightly ahead through Q1, 2018. As inventory tightened, it became evident that 2018 would focus on quality over quantity as the market delivered fewer transactions but at larger prices. 

Driving figures through the roof in April 2018 was a lone $40 million transaction of a rare and compelling $40 million estate on Tahoe’s West Shore. Including this transaction, the number of sales dropped by 17% year over year while transaction volume leapt by 77% and average price by 212%. Adjusting for this market anomaly, volume was up 22% and average price 48%. Even the steadier median price metric grew by 36% indicative of a higher class of purchases as well as some market appreciation.

Beyond this remarkable lakefront transaction, other premium sales were distributed across multiple communities.  Martis Camp continues on the forefront of marquee acquisitions with three transactions between $4.5 - $5.5 million. Four other lakeside properties got a jump on the summer waterfront season with sales greater than $2 million. Winter closed with strong activity in Northstar’s Mountainside community with a $3 million transaction.  Gray’s Crossing, Schaffer’s Mill and Lahontan all saw strong demand for luxury property as well.

Ideally, supply will begin to catch up to demand as spring yields the largest crop of new listings.  While 181 properties have been newly listed in the past 30 days, total inventory stands at just over 3 month’s supply, a further reduction from recent months. A typically quiet month for tourist activity combined with the common Memorial Day listing surge, should provide greater balance to the market heading into summer.

Including the aforementioned transaction for $40 million, momentum is clearly building for Tahoe’s most iconic properties. The California side has already matched the number of sales above $8,000,000 for all of 2017 while Incline Village recently transacted a home at $36 million. With but a handful of truly epic lakefront estates available, the coming summer promises to be active.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012 

March, 2018 Tahoe-Truckee Market Update

A short month, during which a week is allocated to ski-related travel, often turns February into a hectic period for real estate sales. While the total volume of sales often drops, the premium segment of the Tahoe-Truckee market continues to thrive. This year the top end transactions in Northstar, Martis Camp, Old Greenwood and waterfront property on Lake Tahoe all transacted at extremely healthy numbers.

The winners of the season are, without question, savvy sellers taking advantage of laughably low inventory by coming to market now with extremely limited competition. Current sellers face less than 3 months’ supply across all market sectors; and just 3 weeks’ supply in prices below $1,000,000. 

Even premium price points, those above $1 million, are feeling the effects of limited inventory. Where balance typically exists at 1 year’s supply, current inventory offers just under 7 months.

A few specifics:

Gray’s Crossing   10 active listings           26 sales (past 12 months)  4.6 months’ supply

Old Greenwood      5 active listings          15 sales                              3.9 months’ supply

Lahontan               10 active listings          20 sales                              6 months’ supply

Martis Camp         20 active listings          44 sales                              5.5 months’ supply

Northstar               52 active listings          110 sales                             5.6 months’ supply

Two communities offer interesting case studies on the current phenomenon.

Lahontan, the trailblazing resort community, transacted a single home in the first half of 2017. At the time, Lahontan was shaking out a value differentiation for older properties versus updated homes. Year to date 2018, every home listed below $2,000,000 has been absorbed subsequently pushing momentum into higher price points that now show homes pending sale at $2,495,000 and $3,150,000. The 10 remaining homes range in price from $2,490,000 to $4,889,000.

In Tahoe Donner, the bell weather community for the Tahoe-Truckee region, more homes are currently pending than available listings; a previously unseen phenomenon that rewards those willing to shortcut the typical spring listing period. In fact, with conditions so heavily weighted against buyers, a seller wishing to leaseback or seek some other concession to extend time in their mountain home may be accommodated.

With new snow on the ground and market momentum building, the balance of ski season promises to be a busy period for real estate activity.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012 

Tahoe-Truckee Market Update: November, 2017

Tahoe-Truckee Market Update

November 2017

Supporting the theory that market conditions will override seasonal trends, the Tahoe-Truckee real estate market has continued to surge at a time when activity often tapers down into an early winter hibernation.

October 2017 saw over 200 residential transactions for the third consecutive month; the first time on record for such a streak. The 90-day period from August through October has produced over $500,000,000 in total sales volume; number nearly equal to the volume of entire years during the recession.

  

In a typical year, September and October offer a similar number of closed transactions yet September typically offers the years’ peak average price while October shows its’ trough.  This is indicative of the end of the retail buying season followed by value based purchases resulting from price reductions.  September followed suit offering an average price just below $1 million. Transactions in October, however, matched the annual average of $840,000 showing strong momentum continuing into the 4^th quarter.

In addition to another five Martis Camp home sales, notable in October were four Tahoe lakefront home sales.  This class, long the epitome of luxury in the region, has seen an interesting revival in 2017. As redevelopment has been stymied in the Tahoe Basin over the last decade, resort property in Truckee’s various resort communities have offered newer, highly amenitized offerings tantalizing a younger generation of consumers. 2017 has already surpassed previous years with 28 lakefront sales at an average price near $4.5 million; nearly identical to the average sale price in Martis Camp.

  
  

While Truckee resort properties offer greater overall quantity, the ratio of purchases $1 million and above has balanced dramatically from a high of 2.75 Truckee sales for every lakeside transaction to a more balance 1.85 in 2017.

With 260 properties currently pending sale, strong market performance appears likely to continue outperforming the season. Gray’s Crossing, Lahontan and Martis Camp each have five residential sales pending scheduled to close by year end. With snow in the forecast and resorts scheduled to open for skiing within 3 weeks, attention will inevitably shift to mountainside properties were a number of premiere properties will likely trade ahead of the holiday rush.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012