Lake Tahoe Luxury Market Report
Although many of us have been restricted in our movements because of covid, the Lake Tahoe luxury real estate market continues to show resilience. Just in the last week of April, of the 27 homes that have sold, 8 were over $1 million. While overall sales volume has shown a slight decrease from the first quarter of 2020, sale and list prices remain steady.
The stock market is demonstrating a lot of volatility right now, but people usually see real estate as a safer investment. In fact, many lakefront or luxury buyers and sellers who use cash in their transactions may be re-allocating funds. Just as people are still buying stocks, people will still buy luxury homes as an investment.
In a resort market like Tahoe/Truckee, our feeder market mainly consists of 40 million people who live within a 3 ½ hour drive radius. This includes buyers and sellers from the Silicon Valley, San Francisco, Marin and Sacramento. Other resort markets may require air travel, which has been restricted, but not Lake Tahoe.
Additionally, working in a resort market like Lake Tahoe, we’ve been showing our feeder market clients available properties through virtual technology since 1998. Most people will find their ideal property online, prior to ever contacting an agent. I can then visit and evaluate the property, using virtual tours and live broadcasts to provide client access to see what is not visible online.
The other main factor that drives Lake Tahoe’s resort market stability is the supply vs. demand factor. When you consider the 40 million people that make up our feeder markets, available supply at Lake Tahoe has always been limited. Lake Tahoe is a well established and older resort area, so new developments are rare and there are no additional areas for expansion.
In the first quarter of 2020, 60 homes sold on the North and West shore with an average sale price of $1.1 million. In the first quarter 2019, there were just 41 sales in the same area. In March 2020, 71 single family homes sold in the Tahoe/Truckee market, while in March of 2019, only 57 homes had sold that month. Additionally, 30% of the sales in 2020 showed an average sale price over $2 million. We see median prices and sales volume actually increasing in most markets, although lakefront sales remain flat. Both Lake Tahoe and Truckee reached record highs in median prices in the first quarter of 2020.
The real estate market in general appears to be stable because mortgage rates are also at an all-time low. Many experts see the current downturn trend in the economic climate to be very different from the financial crisis of 2008. This previous downturn was driven by a bubble and a necessary correction, which took many years. They expect more of a ‘U” shape recovery in the economy, once the pandemic restrictions have lifted.
If you are thinking of buying or listing your home at Lake Tahoe, I believe this a great time to do so. Contact me today for a free market evaluation.