It isn’t just the real estate market that got beat up a little by the weather, it seems many folks around town struggled with it too. I think the market was very fortunate that we had a strong April. That helped carry over in to May sales which were down a little from the previous year but down 10% from 2017. Some highlights and lowlights are things like Tahoe Donner managed to sell more then twice as many condos this year compared to last with Squaw / Alpine posting almost double as many total sales this year compared to last. The clear low light was our general Truckee market which sales fell by over 30%. It was exclusively in single family homes and largely due to very low inventory once again. To close with a highlight is that there was not a single foreclosure or short sale for the month. So even as affordability challenges continue, people are keeping up on their payments.
On the bright side of the affordability challenge, interest rates continue to be at some of the lowest rates in over two year. Lenders are starting to talk about the ability to get a 30 year fixed rate loan under 4%. Now that is probably with excellent credit, solid debt to income ratios and maybe even a little extra downpayment. Considering it was less then a year ago we were nearing 5%, this is great news. On a $400K loan it is a difference of approx $250 a month. Even at Tahoe Truckee prices, that is a lot of food or gas. I even saw a headline today about the potential the Fed may be considering a drop of the Fed Funds rate. With everything going on economically around the world and with trade wars our economy may be slowing and rest assured the GOP doesn’t want that. So even if the Fed rate change does not directly impact mortgage rates the thought we may continue in this low range is great for real estate.
Inventory continues to struggle or this is the new norm and maybe we never see levels like we did initially after the great recession. When you consider the Tahoe basin essentially from Emerald Bay to the state line at Crystal Bay has a total of 110 homes for sale covering prices from the yes $275,000 for a 1 bedroom, 1 bath to $15,900,000 for a 6 bedroom, 6.5 bath. 30 of those 110 properties are multi million dollar properties by the way. That leaves just 80 to cover from $1,995,000 and below. Suddenly a given price range can get very limited. How about 7 total listings in the range from $900K to $1.1M for example. You could see everything available in a $200K price range in half a day. It might take closer to a full day to see all 10 listings between $600K and $700K. Tahoe Donner is another example where you have over 5,000 homes and just 42 actively for sale covering prices ranging from $435K to $1,849,000. The highest number of listing per $100K range is 8 active listings between $600K and $700K. There are just 3 between $900K and $1M currently. Inventory emergency? I some specific market locations yes.