2016 Tahoe-Truckee Market Update: October

2016 Tahoe-Truckee Market Update

October

The third quarter of 2016 was statistically the strongest 90-day period ever for real estate in the Tahoe Truckee area. 522 residential properties traded hands over this span representing just under $500 million in total volume at an average price of $893,000.

Similarly, year-to-date figures for the region through 3 quarters already exceed many 12-month periods in the recent past. Total sales volume has exceeded $1 billion for the fourth consecutive year exceeding annual totals from 2006-2013. The number of transactions exceeding $1,000,000, $2,000,000 and $5,000,000 already exceed 2015 totals.

Much of the region’s high dollar activity has been concentrated in certain resort communities, namely including Martis Camp which has consolidated an overwhelming 18% share of the local market, however nearly every segment has shown increased velocity.

Despite these exceptional figures, values appear to moving along steadily rather than surging with high volatility that could indicate a corresponding crash. Median price has risen a steady 5% year over year.

Unlike the bubble years of 2004-2006, this run seems to be built on a stronger foundation. Leverage is minimal with tighter lending regulations requiring stronger underwriting standards and generally higher down payments. Low interest rates, while not a primary driver of purchasing decisions for vacation homes, have made carry costs more affordable on a relative basis offsetting increasing purchase prices. 

Most notably, the economic conditions driving Tahoe real estate continue to be robust. Bay Area job growth has fueled the wealth creation integral to seeking and affording discretionary purchases like a home in Tahoe. Despite local prices being on the rise, values in comparison to many Bay Area markets are strong creating move-down opportunities for families looking to relocate and able to telecommute or otherwise generate income away from urban centers.

In addition to consumer driven purchases fueling the market, capital investors have taken notice of the demand for quality housing in the Tahoe-Truckee region. Last week, a $42.5 million deal was announced for developable land near the Heavenly base in South Lake Tahoe. Numerous other projects from Squaw Valley and Northstar to Kings Beach and Tahoe City are in the works hoping to deliver new, modern product to a thirsty population of consumers.

The 4^th quarter is often a quieter time of year with most resort consumers out of the region until ski season. With 262 currently pending with close dates scheduled prior to year’s end, it appears momentum will carry through the end of 2016.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012 

Tahoe-Truckee Market Update: September, 2016

Tahoe-Truckee Market Update

September, 2016 

Through these updates, it is our intent to bring you insights into the market dynamics behind the simple number of sales and average pricing. Occasionally, however, the figures speak for themselves.

August, 2016:

·         178 residential transactions:  The greatest number in any month since 2005 and 30 transactions more than any other month in 2016.

·         $160,154,290 in total sales volume:  Added a full 20% to the previous 8 months. This month alone would have accounted for 25% of total volume in 2009.

·         $899,743 average sale price:  While not the greatest single monthly average this year, when factoring in the volume of sales, many of which are likely to be in the lower price tiers, a remarkable figure and the single highest for the month of August since 2005.

   

Year-to-Date:

·         1001 total transactions through 8 months exceeds the 12-month total of many prior years.

·         $851,163,973 total sales volume:  Already exceeds 12-month totals for each year from 2007-2012

·         $850,314 average sale price:  13% higher than 2015 and the first time this metric exceeds 2006-2007.  Median price has risen 4% over the same period.

·         Sales greater than $1,000,000 and $2,000,000 have already exceeded the total number in 2015.

While nearly all sectors of the market showed gains in August, the most notable driver was Martis Camp with 10 homes sales that accounted for 23% of total volume for the month. At an average price of $3,711,950 and $1,163 per square foot, Martis Camp continues to transcend the luxury space for the region. Additionally, 3 lakefront properties traded between $2,690,000 - $6,500,000. Lahontan closed 4 homes from $1,590,000 - $2,250,000, Gray’s Crossing saw 3 trades from $1,370,000 to $1,735,000; the latter representing the highest pricing in that community this year.

Perhaps most remarkably, this exceptional 30-day period comes just ahead of the typical surge for Tahoe-Truckee homes sale. Under normal market conditions, consumers will shop for real estate through Labor Day before making a purchasing decision in anticipation of the winter season to come. As such, September and October are most often the peak months for real estate closings in our region. With over 200 transactions currently pending, September appears to be on a similar trajectory.

Despite this strong absorption, there remains ample inventory of over 9 months supplying the market. It is not unreasonable to expect some cooling as we move beyond the current landscape. The same normalized market conditions that show surging sales over the next 60 days indicate a steep drop off from November – January. Similarly, election years generally create some level of paralysis for discretionary purchases including resort real estate. Particularly in a year as volatile as this, some level of market uncertainly can be expected. Finally, surging conditions like we are now experiencing are often followed almost immediately by a cooling. Without the major debt overhang of a decade ago, this cooling is likely to be a leveling of prices and slightly extended market time rather than more significant impacts in the not-too-distant past.

Fall is arguably the best time of year in Lake Tahoe as warm weather and crisp night make for ideal recreation. We hope you are able to join us as we squeeze every bit of enjoyment from the season.

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012