MARKET UPDATE
JULY 2022 As the market continues to change, we are committed to keeping you, our valued friends and clients, apprised of the new market dynamics as we interpret them. We aim to provide you the clarity you need to make the best decision for your investment in our community. Enclosed we have compiled data from the last four years of single family home inventory and sales in all of Truckee, Donner Summit, Donner Lake, Martis Valley, Northstar, Alpine Meadows, Olympic Valley, North Lake Tahoe to Stateline, and West Lake Tahoe to Rubicon. While all real estate is hyper local, there is a broad enough visible trend that all markets appear to be seeing. We feel it is crucial to share this local market data in order to help our friends and clients make appropriate decisions regarding real estate in Truckee and Lake Tahoe. Source: Tahoe-Sierra MLS; all stats for single-family homes in Truckee-Tahoe as of June 30, 2022.
MARKET UPDATE OVERVIEW ●
We expect the standing inventory to continue to grow through the middle to end of summer 2022. Our expectation is that inventory will peak somewhere around 330 active home listings, which is about 40-50% more than the current inventory.
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We anticipate the number of sales per year to return to pre-pandemic levels. This will leave most areas and price ranges solidly in a seller's market, albeit a less robust one.
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We do not expect significant pricing changes to go either up or down through the end of the year. FOR SELLERS: Pricing a listing appropriately will be critical. In the pandemic market a successful sale was less dependent on the right price, as the demand was so high. Now, properties that are priced too high will likely get punished by the market. The target time in the market will be no more than 4-6 weeks before a home starts looking stale to buyers (ie. why hasn’t this house sold?). FOR BUYERS: There will likely be a natural slowdown in price appreciation as our inventory rises. However, home values are projected to continue to rise year over year. If you are a buyer who has been frustrated with the limited supply of homes, there is some relief in sight with the increase in summer inventory. It is still important to be prepared to act quickly if you find the right property — if you love it, be decisive.
Months of Inventory
Neutral Market
6.00
5.00
Months of Inventory
4.00
3.00
2.00
1.00
0.00 J-18 J-18 A-18 S-18 O-18 N-18 D-18 J-19 F-19 M-19 A-19 M-19 J-19 J-19 A-19 S-19 O-19 N-19 D-19 J-20 F-20 M-20 A-20 M-20 J-20 J-20 A-20 S-20 O-20 N-20 D-20 J-21 F-21 M-21 A-21 M-21 J-21 J-21 A-21 S-21 O-21 N-21 D-21 J-22 F-22 M-22 A-22 M-22
TRUCKEE-TAHOE MARKET STATS
7.00
Date
CHART 1A
MONTHS OF INVENTORY | JUNE 2018 – JUNE 2022
Months of Inventory is interplay between active inventory and the number of sales in the last year. It can also be looked at as the amount of time it will take to sell all of the properties currently on the market if no additional homes were added to the supply. In this chart, the black line represents where a neutral market begins. The lower the blue line the more the market favors sellers. The first half of the last four years saw fairly normal market cycles. In May of 2020, the market began to shift to heavily favor sellers. As of June 2022, there has been another decisive shift in market dynamics moving towards a more neutral market. See chart 1B for further breakdown
June 18-May 19
June 19 - May 20
June 20- May 21
June 21 - May 22
Neutral Market
6.00
5.00
Months of Inventory
TRUCKEE-TAHOE MARKET STATS
7.00
4.00
3.00
2.00
1.00
0.00 J
A
S
O
N
D
J
F
M
A
M
J
Months (Starting in June)
CHART 1B
MONTHS OF INVENTORY | YEAR OVER YEAR
In this chart we are looking at the same four years of data from chart 1A, but layering each year on top of one another. Months of inventory is historically on the rise at the end of May each year. The May-June 2022 inventory was much higher than it had been for most of the previous year, yet still far lower than it was in mid 2018 through mid 2020. We are now seeing a more rapid rise in inventory as summer sets in. We see the slight uptick from May 2022 to June 2022 as the available supply starting to approach the current level of demand.
2000
1600 1400 1200 1000 800 600 400 200 0 J-18 J-18 A-18 S-18 O-18 N-18 D-18 J-19 F-19 M-19 A-19 M-19 J-19 J-19 A-19 S-19 O-19 N-19 D-19 J-20 F-20 M-20 A-20 M-20 J-20 J-20 A-20 S-20 O-20 N-20 D-20 J-21 F-21 M-21 A-21 M-21 J-21 J-21 A-21 S-21 O-21 N-21 D-21 J-22 F-22 M-22 A-22 M-22
TRUCKEE-TAHOE MARKET STATS
1800
CHART 2A
HOMES SOLD | JUNE 2018 – JUNE 2022
This chart represents the number of single family home sales for the 12 months preceding each date. For example, June 2018 respresents the sales from June 2017 through June 2018. The tidal surge of home sales during the height of the pandemic started in mid 2020 and ran until early 2022. However, we are now in the range similar to the pre-pandemic market. The region appears to be easing back into the status quo of 1,000-1,200 sales per year. See chart 2B for further breakdown
2019-2020
2020-2021
2021-2022
2000 1800 1600 1400 1200
Number of Sales
TRUCKEE-TAHOE MARKET STATS
2018-2019
1000 800 600 400 200 0 J
A
S
O
N
D
J
F
M
A
M
J
Month
CHART 2B
HOMES SOLD | YEAR OVER YEAR
In this chart we are looking at the same four years of home sales data from chart 1A, but layering each year on top of one another. Above we can see where the market has been at the same time of year across each of these four years. Currently, the annual number of sales is just over the pre-pandemic level. As expected, the last month has shown a significant increase in standing inventory. As in the years prior to 2020, we expect inventory to peak between mid July and mid August.
500
400
Active Homes
TRUCKEE-TAHOE MARKET STATS
600
300
200
100
0 J-18 A-18 O-18 D-18 F-19 A-19 J-19 A-19 O-19 D-19 F-20 A-20 J-20 A-20 O-20 D-20 F-21 A-21 J-21 A-21 O-21 D-21 F-22 A-22
Months (every other month, starting in June)
CHART 3A
ACTIVE HOMES | JUNE 2018 - JUNE 2022
The active inventory historically drives the seasonal rythym of our market. The first two years of this chart represent our normal local market cycle. Beginning in the middle of May 2020, the buyers of the early pandemic period rushed to purchase much of the available inventory. Despite record numbers of homes coming on the market, inventory was still at less than half of the pre-pandemic levels. Now, by the end of June 2022 we have seen a significant inventory spike. If this is the first indication of returning to a normal market, we are likely to see the month over month standing inventory nearly double by the summer of 2023.
See chart 3B for further breakdown
2018-2019
2019-2020
2020-2021
2021-2022
500
Number of Active Listings
TRUCKEE-TAHOE MARKET STATS
600
400
300
200
100
0 J
A
S
O
N
D
J
F
M
A
M
J
Months (Starting in July)
CHART 3B
ACTIVE HOMES | YEAR OVER YEAR
In this chart, the active listing data from chart 3A is layered year over year and shows the inventory is still below (almost half of) pre-pandemic levels. Sales are being absorbed at a lower rate than the previous two years. We expect to see available inventory continue to grow.
2 years ago
1 year ago
Current
Neutral between buyer/seller market
TRUCKEE-TAHOE MARKET STATS
18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 <$1mm
CHART 4A
$1mm-$1.5mm
$1.5mm-$2mm
$2mm-$2.5mm
$2.5mm-$5mm
$5mm-$10mm
$10mm-$20mm
MONTHS OF INVENTORY BY PRICE OVER 2 YEARS
Months of Inventory is interplay between active inventory and the number of sales in the last year. It can also be looked at as the amount of time it will take to sell all of the properties currently on the market if no additional homes were added to the supply. This chart compares inventory by price range from the year preceding June 2022, along with the year preceding June 2020 and the year preceding June 2021. The blue bar represents the year preceding June 2020 and is relatively normal. Over the next two years the median price for single family homes rose from $890,000 to $1,500,000. See charts 4B & 4C for further breakdown
1 year ago
current
1000 900 800 700
Number of Lsitings
TRUCKEE-TAHOE MARKET STATS
2 years ago
600 500 400 300 200 100 0 <$1mm
CHART 4B
$1mm-$1.5mm
$1.5mm-$2mm
$2mm-$2.5mm
$2.5mm-$5mm
$5mm-$10mm
$10mm-$20mm
$20mm<
SOLD HOMES BY PRICE OVER 2 YEARS
Using the same data from chart 4A, but breaking out the number of listings by various prices ranges, also shows how the market has changed. The previous median sales price was <$1mm ($890,000), and it has now moved into the $1-$1.5mm range ($1,500,000). It has become more difficult to find inventory below $1mm today.
1 year ago
current
90 80 70
Number of Listings
TRUCKEE-TAHOE MARKET STATS
2 years ago
60 50 40 30 20 10 0 <$1mm
CHART 4C
$1mm-$1.5mm
$1.5mm-$2mm
$2mm-$2.5mm
$2.5mm-$5mm
$5mm-$10mm
$10mm-$20mm
$20mm<
ACTIVE HOMES BY PRICE OVER 2 YEARS
Still using the same data from chart 4A, but sorting the active inventory by price range, we can see another way that the market is starting to shift back towards our pre-pandemic market. Inventory is starting to rise in most of the higher price ranges first, and gradually growing through the lower price points.
If you would like a more specific look at what your home or neighborhood looks likes in this changing market, please do not hesitate to reach out. We would be happy to provide you with a comprehensive value analysis of your property.