Very strong compared to a year ago, but not the levels we saw in 2016. Tahoe basin sales increased 22% while Squaw / Alpine sales increased 20%. Greater Truckee had an even larger increase of 30% and Tahoe Donner rounds things out at 25%. Total sales for the area combined increased 25% from 105 last year to 132 this year. Considering the tight inventory, increased prices and climbing interest rates, I find these numbers exciting. Tahoe Truckee Homes is feeling the effects of this market too. Business has been very strong and looks to continue to stay strong as we head towards Fall. How we carry through the next few months and end of the year is going to be very interesting.
Clearly, values are continuing to climb. I believe this to be the simple effect of supply and demand. Basin inventory is down 20% from a year ago, Squaw/Alpine down 12%, greater Truckee down 25% and Tahoe Donner down 13%. All areas are down on inventory, a considerable amount, while demand and sales have increased significantly. What does this all mean? Even as prices continue to climb buyers are seeing the value in the area still and likely will for the foreseeable future. Based on California general real estate, let alone bay area real estate, we still look affordable. We are still closing in on the market highs of 2005/2006. Will we eclipse those highs this year? Time will tell!
The next thing I am on the lookout for is compression in the market. I have not used this term in a while, but I do feel like even though the higher end market is still solid the low-end market is much stronger. The effect of the higher end homes becoming stagnant on appreciation while the low end continues to appreciate creates that compression. From there it becomes even more pronounced that the more you spend, the more you get. You may not see big differences from $500K to $700K but you will see huge differences from $700K-$900K and so on. To put it another way, of the 570 single-family home sales so far this year, 70% have been below a million dollars. Contrast that with the fact that of the 411 active single-family homes, barely 50% are under a million dollars. The higher the price level you shop the more opportunities you have to consider and the better leverage you have to negotiate from.
-Matt Hanson, Broker
2017 Realtor of the Year
Tahoe Sierra Board of Realtors