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 

April 2019 - Tahoe-Truckee Market Update

After keeping pace with previous years over the first several months of 2019, March saw a precipitous drop in real estate activity throughout the Tahoe Truckee area. Several factors including overwhelming snowfall throughout early winter and limited access to the region combined with an unusual scarcity of available property leading to this statistical drop.

In all, 256 residential properties traded in Q1, 17% fewer than over the same period a year prior. Conversely, average price has risen nearly 10% attributable to a handful of super-premium transactions, while median price has risen nearly 2%.

Some lull after a years long rally is to be expected and is ultimately healthy for the long term prosperity of the region. However, the continued health of the Northern California economy keeps fueling demand for second homes in the mountains. The recent IPO from Lyft and expected success when Uber and AirBNB go public are examples of exceptional wealth creation concentrated in Northern California that ultimately finds its way to Tahoe.   As such, a sluggish month for closings appears to be more related to historic snowfall and highway closures than any macroeconomic trend.

The impact of heavy snow to the demand side is obvious. When highways close consumers cannot visit the region to tour property and make purchasing decisions. Less obvious is the impact to the supply side. Would-be sellers have been generally unable to prepare homes for market including simple tasks including photography when snowbanks exceed ground level. As such, the steady trickle of new listings typical of Q1 have been entirely absent leaving relatively little available inventory.

Within our resort marketplace, balanced inventory is considered around 6 months’ supply while premium resort communities are closer to 1 year. Current inventory sits at just 3.3 months’ supply. 

A look at some individual communities and relative absorption rates:

Northstar:                           56 listings / 98 sales = 6.8 months’ supply

Old Greenwood:               4 listings / 4 sales ( + 6 pre-sale contracts) = 12 months

Gray’s Crossing:                7 listings / 17 sales = 5 months

Lahontan:                            4 listings / 9 sales = 5.3 months

Martis Camp:                     17 listings / 48 sales = 4.2 months

Schaffers Mill:                    6 listings / 11 sales = 6.5 months (MLS only)

Others for reference:

Tahoe Donner                                 36 listings / 326 sales = 1.9 months

Lakeside                                               81 listings / 426 sales = 2.2 months

Squaw Valley                                   82 listings / 71 sales = 13 months

The period between Memorial Day and July 4 is typically the most prolific for new listings as ski leases expire and sellers are able to handle deferred maintenance.  It would not be surprising to see a heavier than usual quantity hit the market once the snowbanks recede and give way to green grass and open trails.

In the meantime, consumers deterred throughout February and early March are taking advantage of what promises to be a long season. Real estate tours and offer activity have shown a meaningful increase now that clear roads and longer days have made for optimal conditions.

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 

February 2019 - Tahoe-Truckee Market Update

2019 is off to singular, and statically misleading, bang for the Tahoe Truckee real estate market. An otherwise very typical January was punctuated by a $37,000,000 lakefront acquisition completing what appears to be a remarkable accumulation of waterfront property.

This acquisition of 5.69 acres is paired with the adjacent 3.5 acres transacted in December to the same entity for $22,000,000 creating a remarkable 9-acre lakefront estate on Tahoe’s West Shore featuring over 600 feet of shoreline. The structures, while classic Tahoe in their appeal, are largely depreciated giving the expectation that most, if not all, of the nearly $60 million value in the land.

The latest transaction put under contract in November 2018, continues the Q4 trend whereby a handful of extraordinary transactions mask an otherwise normalizing real estate market. Including this sale, the region transacted 96 residential sales, identical to the same period in 2018, at an average price of $1,260,000. This data point would represent a 20% increase in average price. Median price, however, shows a modest 3% increase over the same period; much more reflective of the actual trajectory of values in the region.

January is the historical trough for Tahoe real estate closings through conditions weak and strong. Transaction data typically lags market conditions by 30-45 days revealing pre-holiday season activity before snow has fully covered the hills and visitation returns to peak levels.

This past weekend,  a set of epic storms brought over 5+ feet of snow to the region. Tahoe resorts will have ample snow to create the waves of would-be consumers coming in February and beyond.  Once past Ski Week Festivities, real estate shopping begins in earnest resulting in increased transaction volume throughout the spring.

Katie Tyler

BRE 01442453

c 530 277 1012 

October 2018 Q3 Truckee-Tahoe Market Report

The third quarter of 2018 was record setting for real estate in the Tahoe Truckee region by every measure but for one. Total sales volume and average price hit all-time highs while median price equaled the 2006 market peak. Only the total number of sales units fell behind the same period last year due, in part, to a supply constrained market.

Total sales volume from July through September totaled $540,385,789. The second ever period eclipsing a half billion and pushing higher than the same time in 2017 by 7%. With the total number of transactions lagging by 7%, the market is being driven by premium inventory. In fact, average price (a metric more easily manipulated by extraordinarily high prices), surged by 14% from $903,576 in 2017 to $1,037,785.

Median price, more reflective of whole market conditions, bumped up 8% from $595,000 to $645,000 despite lower transaction volume.

In good markets and bad, the third quarter begins a steady climb as the regional market gains momentum when summer visitors combine with anticipation of winter-to-come. This momentum will typically peak with closed transactions in October before tapering to year end.

Driving activity during Q3, were an extraordinary number of premiere transactions of both Tahoe lakefront properties and Martis Camp estate homes. In total, 4 properties crested $10 million including Tahoe Mountain Realty’s $24,000,000 masterpiece sale on Tahoe’s West Shore. Martis Camp, a community that didn’t exist when the market last peaked in 2006, transacted ten homes in the last 90 days from $4,185,000 - $11,750,000 adding $64,000,000 to the region’s transaction volume.

With any market, the wealth is not distributed equally. While most residential structures have appreciated at a healthy clip, raw land has continued to depreciate. In addition to simple supply and demand considerations, land values have even greater variability based upon construction costs.  Building cost has soared at a rate even greater than either inflation or home appreciation due to a complex combination of rising commodity prices, regulatory costs and exceptionally tight (and busy) labor supply.  As a result, residual land value, defined as the value of a finished new home minus the cost to build, is actually inverted in many neighborhoods throughout the region. As a result, land values hover closer to mid-recession lows than peaking home values.

Looking ahead, Q4 appears poised to maintain at the steady pace of recent years. At 5 month’s supply, there is sufficient inventory to the consumers currently engaged though many are accumulating significantly days on market for having been ambitiously priced.

While the current bull market is showing no sign of major correction, a plateauing appears inevitable as the buyer pool becomes saturated. Whether such a slowing comes before the end of 2018 is yet to be seen. Regardless, the beauty and health of the region remain recession-proof commodities.

Katie Tyler

BRE 01442453

c 530 277 1012 

August, 2018- Tahoe-Truckee Market Update

The local real estate market had spent much of 2018 in a latent state with high demand constrained by unusually tight supply. As is often the case, spring brought a wave of new inventory allowing the market to show kinetic energy in the form of increased deal flow.

July, 2018 outpaced the same month a year prior by 1% after comparatively lagging through the entire second quarter. More notably, the market gravitated toward high-end and super-premium offerings exploding average price by 32% year-over-year to $1,058,488.  The bias toward higher-end properties also jumped median price by 15% and total transaction volume by 35%.

The headline transaction for July was undeniably the $24,000,000 sale of a premiere lakefront estate represented by Tahoe Mountain Realty.

This transaction marks the third sale above $20,000,000 in 2018 joining previous lakefront transfers of $22,865,000 and $40,000,000. Prior to 2018, just two published sales have ever eclipsed $20,000,000. Lakefront property on Tahoe has always been the pinnacle of mountain homeownership in California. Recently, strong market forces combined with the availability of rare and unique updated properties have created a groundswell of interest in premium real estate.

This influx of premium sales has created a widening gap between average and median price to the point where year-to-date average price ($1,091,966) is nearly double that of the median price ($642,000). 

This is indicative of rising wealth creation in Tahoe’s Northern California feeder market wherein quality product in a beautiful setting is of increasingly greater intrinsic value. As the San Francisco Bay Area has grown more crowded and commerce more intense, successful consumers are finding the virtue of retreating to the woods to be worth the premium.

Such conditions can’t continue indefinitely but the trend is a strong reflection of the values of our consumers. One need only study the parking lots of the region’s popular trailheads or ski resorts to understand the need for time in nature. 

Katie Tyler

BRE 01442453

c 530 277 1012
ktlaketahoe.com

Year To Date Market Report - Tahoe-Truckee 2018

During the first half of 2018 the Tahoe-Truckee region has seen an explosion at the highest reaches of the market with 66 properties trading at values in excess of $2,000,000; a figure that exceeds the 12-month total of 7 out of the last 10 years. Reduced supply combined with surging demand have resulted in slightly fewer sales at substantially higher prices, and conditions defining the performance of the market are satisfyingly linear.

The motivation of consumers seeking a lifestyle enhancement, whether as a primary or secondary home, in a beautiful mountain environment is easily understandable. With factors economic and cultural in alignment, the quantity of families making this quality of life decision has never been greater. In the simplest terms, there are generally more consumers in the marketplace than quality homes to buy. 

Premium lakefront offerings, those that have been updated or rebuilt and sit on remarkably parcels of land, have led this charge with three sales topping $20,000,000 and another handful in play for the second half of 2018. Not far behind traditional lakefront estates on premium values but at the opposite end of design spectrum, is the continued phenomenon of Martis Camp. With new, modern homes and an unrivaled amenity package, home sales have doubled year over year while values reach to $8 million and above for select offerings.

Such robust activity is somewhat atypical of the season; particularly after a late-arriving winter. The second half of any given year will see nearly double the transaction volume of the first half. The current sense is that the only factor limiting this potential is restrained supply. Inventory levels have been hovering around 3 months’ supply for much of the last 12 months; approximately 50% below a balanced market. As spring typically brings new listings to market, we currently sit at a balanced 6-month supply. With the aforementioned interest piquing, conditions are ripe for a sensational last two quarters of 2018.

I look forward to being your go-to resource for navigating the dynamics of our unique marketplace.

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 

The Lake Club - Tahoe's Finest Lake Experience

Spring is here and warm temperatures are in the forecast. Daydreams about summer at Lake Tahoe are getting closer to reality. Access to Lake Tahoe is very limited, and the newest lakeside amenity is The Lake Club for The Ritz-Carlton, Lake Tahoe. Guests who are staying at the Ritz-Carlton now have another tempting activity to add to their list of mountain adventures while in the Tahoe area.

The Lake Club is located in Tahoe Vista, which is just a short 15-minute drive from Northstar Mountainside where The Ritz-Carlton, Lake Tahoe is located. There are shuttles that can take guests to lake venue, or guests can drive themselves. Once guests arrive, they will be greeted with a contemporary and stylish place to enjoy Tahoe’s legendary clear waters. Design influences are incorporated from local and world renowned artists and designers, meant to complement the natural beauty of the lake as seen from floor to ceiling windows throughout the Club.

Multiple indoor dining and gathering spaces invite guests to enjoy fine food, conversation and cocktails. The upper floor of the Club is a indoor/outdoor dining terrace with fire place and sweeping views of the lake.  

The pier and surrounding buoys are available for guests to use with their own boats or rentals (boats, waverunners, yachts) can be arranged. Other water activities such as paddle boarding, canoeing and kayaking can be launched from the beach and lawn area directly on the lake. For those enjoying lake activities, there is an outdoor whirlpool and shower/changing rooms to rinse off at the end of the day.

With the addition of The Lake Club, The Ritz-Carlton, Lake Tahoe has truly elevated the guest experience beyond all expectations. Come and enjoy all that the Tahoe area has to offer this summer in true five-star style.  

Photos courtesy of The Ritz-Carlton, Lake Tahoe by Don Riddle

Information included from Tahoe Quarterly and The Ritz-Carlton, Lake Tahoe

Katie Tyler

Realtor®

BRE 01442453

c 530 277 1012