2019 Year End and Q4 Real Estate Market Reports for North Lake Tahoe CA and Truckee

2019 started with some of the lowest inventory levels for single family homes Truckee has seen for quite some time. Record amounts of snowfall in February incapacitated the Tahoe Truckee area and highly impacted property owners’ abilities to list their homes. Buyers faced many challenges touring what few homes were available to see. Market fluctuations from Quarter 1 to Quarter 2 were apparent due to this. Q1 continued on the upward trend it had been on; Average Sale Price and Median Sale Price were both up from the previous quarter and also from the same quarter in 2018. Single Family units sold was down though by 27% from Q1 2018. In Q2 we saw the Median Sale price climb and the Average Sale Price drop in the wake of “Februburied”. Inventory did pick up quite a bit in Q2 and continued to outpace 2018 through the end of 2019.

Strong Performance in Q2/Q3 with Slightly Longer Marketing Times on the Lake

After an incredibly strong 2018, sellers came into 2019 with guns blazing. Unexpectedly high buyer apprehension due to economic uncertainty caused some longer marketing times and a lower list price to sale price ratio. Marketing time for homes on the Lake  grew from 72 days to 78 days on average. Under $1M the marketing time grew from 62 to 70 days. In Truckee marketing times stayed consistent at 56 days for all price ranges and at 43 days for homes under $1M.   Many sellers also priced their homes with the thought that the market was appreciating at a faster pace than it did. Those sellers found themselves having to do price drops and having their home on the market for a bit longer than in previous years. There were still many homes being snatched up in days to multiple offers, and those homes generally were listed at more conservative prices. Often times the sellers that were overly optimistic with their pricing still received multiple offers but not until much later in the game and once price reductions had occurred.

Red Hot Demand for New Construction Luxury Homes

Demand for Truckee’s luxury golf communities continued to expand through 2019. Lahonton has had a resurgence of new construction. In the last 4 years new homes have accounted for 20-25% of the market there. Lahonton experienced growth in both the average home price (11%) and the median home price (28%)  in 2019. Gray’s Crossing’s popularity continues to grow along with its home values. One of the quickest growing communities in the area, a majority of sale there are new construction. The average home price grew by 8.4% and the median home price grew by 16.6%. Homes in Gray’s also sold for a whopping 98.9% of the list price. Martis Camp home prices continued to push the envelope with it’s highest home sale there in 2019 of $13.6 mil. Average home prices grew a little slower in Martis Camp than in previous years at 2.8% versus 17.7% in 2018. The median home price grew, however, by 9.9%.

Both Schaffers Mill and Old Greenwood’s average home prices and median homes prices were down, and in Old Greenwood by quite a bit. Units sold in Old Greenwood in 2019 more than doubled due to new construction of homes in the $1.6mil range. This however pulled the average sale price down to $1.68 mil from $2.17 mil in 2018, a decrease of 23.5%. The sales volume was also substantially up due to the new construction which revamped some demand in Old Greenwood which hadn’t seen that much new construction in quite some time. Also homes in Old Greenwood sold for 99.2% of the list price! Wow!

Demand for Lake Tahoe lakefront and split-lakefront homes also continued to grow this year. The average sale price for this sector was up by just a hair (.2%) though the median sale price grew by 6.4%, marketing time drop from 149 days in 2018 to 136 days in 2019, and on average sales were at 97.8% of the list price. This is up from 94.2%  of the list price in 2018, which is where that ratio has been hovering for the last few years.

2019 Year Over Up Despite Sluggish Q4

With plenty of economic uncertainty still lingering at the end of 2019, we saw performance in Q4 down from both Q3 2019 and also Q4 2018. Both the average sale price and median sale price of homes in Q4 dropped though a higher percentage of the list price was captured. Homes sold for 97% of the list price in Q4 2019 versus 94.5% in Q3 2019 and 96.6% in Q4 2018. Multiple offers and low marketing times remained the norm in the low end especially. Marketing time was a few days less on average than in Q4 2018 (62 days in Q4 2019 vs 65 days in 2018) and units sold were a few up (185 in Q4 2019 vs 181 in Q4 2018).

For single family homes in 2019, a majority of neighborhoods and price ranges experienced growth though at a much lower rate than in previous years. Growth was around 2%, depending on which sector of the market you look at. Some of the activity in the luxury market as discussed previously negatively affected the overall averages. As did the hit that the average condo sale prices took in 2019 (-6.7%).

Notable Year-Over Market Stats

2019                                                                                             2018

-1042 Single Family Homes Sold                                         -1083 Single Family Homes Sold

-Total Sales Volume: $1.17B                                                  -Total Sales Volume: $1.34B

-Average Marketing Time: 68 Days                                     -Average Marketing Time: 66 Days                                -Average Sale Price: $1.125M                                                -Average Sale Price: $1.125M

-Median Sale Price: $745K                                                    -Median Sale Price: $720k

-21 Units Sold Under $300K                                                 -17 Units Sold Under $300K

-295 Units Sold Over $1M                                                      -309 Units Sold Over $1M

-58 Units Sold Over $3M                                                       -81 Units Sold Over $3M

-High Sale of $37M                                                                 -High Sale of $40M

-Low Sale of $80K                                                                   -Low Sale of $168K

Slow and Steady Appreciation in 2020

Predictions across the board tend to show continued, albeit slow and steady, growth in 2020. With Trump’s trade deal with China moving forward positively, there is more economic optimism and potential stability.  Projections that a recession may occur in 2020 have been reduced from 33% to 20%, according to Goldman Sachs in their 2020 U.S. Outlook. We are currently in our longest recorded expansion which generally makes one think that a recession must be looming, and it may well be. All signs point to “Ask Me Again Later”. For now those late cycle indicators remain in check, including inflation and financial imbalances, also according to Goldman Sachs. Mortgage rates are expected to stay around where they currently are through 2020. Inventory continues to be a problem  here and across the country. Those two factors will continue to support appreciating home prices.

Local indicators also are not pointing towards a recession. We did experience a slight increase in both days on market and list price discount rate. However, marketing time is lower now than in 2016 or any time prior to that. Homes were selling at a lower percentage of the listing price prior to the peak of the market in 2008 as well. The sale to list price ratio has remained pretty steadily in the 96.5% range since 2013. We did see some average sale prices drop though the median sale price has continued to climb across the board, even portions of the market that did experience a decline in the average sale price.  Though we are appreciating at a more sluggish pace than we have been, it is actually a much more stable environment we are finding ourselves in. Buyer demand continues to outpace inventory in most parts of the market. We should anticipate continued buyer demand in 2020 with sale prices steadily appreciating though not at the neck-bracing pace we’ve experienced in the expansion post the Great Recession.