Coldwell Banker Realty
2023 NORTH LAKE TAHOE-TRUCKEE REAL ESTATE MARKET REPORT
Residential Sales Summary - Single Family Homes and Condominiums
Living in Tahoe and navigating the real estate market always presents surprises and challenges, and 2023 was no exception. The year was marked by numerous headwinds, notably a significant winter that hindered home listings, inflation, rising interest rates, and a cooling national real estate market.
For the year, the total number of residential transactions decreased by 11% compared to 2022, ending up 30% below the 5-year average and 28% below the 10-year average. It marked the lowest number of residential transactions in the last decade.
Median and Average Sales Prices: The smaller number of transactions was accompanied by some softness in pricing. The median price of a residential sale dropped by 3.6% (from $1.1 million in 2022 to $1.06 million in 2023), while the average sales price dropped by 6.2% (from $1.646 million to $1.544 million).
For single-family homes, the Median was down 4% (from $1.23 million to $1.181 million), and the a
average price was down 6% (from $1.849 million to $1.742 million).
For condos, the median price was down 1% (from $735,000 to $726,000), but the average was actually up 12% (from $895,000 to $998,000).
Nevertheless, prices still maintain a healthy premium compared to 2019 (before COVID). For single-family homes, the median sales price is up 59% compared to 2019 (from $745,000 to $1.181 million), and the average sales price is up 53% (from $1.135 million to $1.742 million).
For condos, the median sales price is up 69% compared to 2019 (from $430,000 to $726,000), and the average sales price is up 80% (from $555,000 to $998,000).
Active Inventory:
Active Listings: In the heart of winter, inventory hits annual lows. Currently, there are 230 residences on the market. Last year, at this time, there were about 180 residences actively for sale, whereas in 2019, the number was closer to 400. Looking at long-term numbers, inventory is still at historically low levels compared to pre-COVID times, around 60% of the average for the 5 years prior to COVID and 40% of the 10-year average for this time of year.
Current Pending Sales: The number of pending sales is at 55 (down from 62 last year at this time).
Current inventory represents a little over 4.2 months of supply relative to December activity. Historically, any number below 5 months of supply is considered a seller’s market. However, this is the most balanced market seen in years.
Sales Distribution:
Sales Under $500,000: In 2023, there were 60 residential sales under $500,000, representing 6% of total sales, consistent with 2022.
Mid-Range Market Sales $500,000 to $999,999: For the year, 407 residences sold between $500,000 and $999,999, representing 40% of total sales, up from 37% in 2022.
High-End Home Sales $1,000,000 to $1,999,999: 381 residences sold between $1 million and $2 million, representing 37% of total sales, consistent with 2022.
Luxury Home Sales Over $2 Million: 180 residences sold over $2 million in 2023, representing 18% of total sales. This includes 46 sales over $5 million, of which 7 were over $10 million. In 2022, 226 residences sold over $2 million, representing 20% of sales. This includes 46 sales over $5 million, of which 15 were over $10 million, 2 over $20 million, and 1 over $40 million.
Looking Forward:
The extremely strong "COVID boom" real estate market is in the rearview mirror, and the region has experienced well-below-average activity for the last 18 months. However, the inventory of homes for sale has not significantly increased, and prices have only slightly softened.
Is the market activity going to change dramatically in 2024 compared to 2023? Probably not. If it does, it will likely be due to factors not currently on our radar.
A strong stock market and declining interest rates usually help strengthen demand in our local market, offering hope for increased activity in the coming year. The upcoming election will also be an interesting variable to consider.
Low inventory will continue to be a significant force on the supply side of the market. Inventory is still below half of what was typically seen at this time of year in the pre-COVID benchmark years.
Multiple offers on properties have become uncommon, and bidding wars (5+ offers) have nearly disappeared. However, price reductions seem to occur on only about 5% of listings each week, indicating a relatively stable trend.
We expect below "normal" (by pre-COVID standards) activity, measured by the number of transactions, to continue in Q1 2024 but are hopeful to see transactions climb toward normal averages as we progress through the year.
Sellers, keep in mind, this is still a much better time to be a seller than it was in 2019. You can expect a shorter time on the market but much higher sales prices!
Buyers, keep in mind, this is the most balanced market seen in the last 3 years. You now have the following advantages working in your favor: the ability to negotiate price, inspect properties with normal contingencies, negotiate repairs, and take advantage of current interest rates, which, if they continue to climb, will be advantageous to lock in now and potentially refinance later.
Contact me to find out more about the opportunities available in the North Lake Tahoe-Truckee market.