Lake Tahoe West Shore Market Report 2022

First Quarter 2022 West Shore Real Estate Market

As a West Shore Real Estate Specialist, I am excited to see the listing inventory begin to grow along the west shore of Lake Tahoe. In May, inventory more than doubled from 13 available listings at the beginning April, to 38 in May.

Sales activity has yet to register the addition of these new listings. In April and May, there were 3 single family homes sold during both months. As inventory rises, we should see more sales as demand for Lake Tahoe real estate remains strong.

For the First Quarter of 2022 on the west shore, we had a total of 24 homes close escrow. Three sales were between $500K to 699K, and six sales were between $700K and 899K. Four properties sold between $900K and 1.2 million, with eight selling between $1.2 million and 2 million. There were three homes sold on the west shore for over $3 million.

Median Price

The Median Price for sales on the west shore was at $1.4 million, with the average days on market at only 11 days. The market was very different January – March, with very little inventory, compared to April and May 2022. We may see days on market increasing as prices continue to climb and listings become more available.

Sales Volume

When we compare May sales volume to April, the total sales volume went from $4.2 million in April to $5.6 million in May. This is a reflection of the increasing inventory and continued demand for available homes.

The sale to list price went from just over 100% in March to a whopping 111% in May! This is a combination of the more entry level homes available on the west shore and the competitiveness of this price point. The limited inventory in March would have registered as a reduction in closings in April and May. The entry level market is now upwards of $600K on the west shore of Lake Tahoe.

North and West Shore Combined

On the north and west shore, the median sales prices rose 16%, while sales volume was down 41%. The lack of inventory during the First Quarter hurt sales, but we are beginning to see more listings hit the market. 29% of the sales were between $750K and 1mil. 12% were between $2 and 5 million.

The 47 sales that occurred during the First Quarter track to the norm for this area over the last 5 years. However, that number doubled to 85 sales in the First Quarter of 2021 when remote work drove many people to relocate to Lake Tahoe from the Bay Area. This is why sales volume appears down year over year, when it is really stabilizing.

Interestingly, no lakefronts sold on the West Shore during the First Quarter of 2022. Two lakefronts sold on the North Shore, with a Carnelian Bay lakefront sale at $23.6 million that pushed the median price for that area to $14 million. This is quite and increase compared to a median price of $4 million during the First Quarter 2021.

Mortgage Rates and the Real Estate Market

Last winter, mortgage rates were at 2.75%. The combination of low rates and huge buyer demand made 2021 an epic year for real estate sales. In May 2022, interest rates had risen to 5.25%, almost double! The home supply is still less than what is needed to meet the growing demand for housing. The Fed hiked interest rates as a way to cool inflation and it does seem to have stalled affordability.

For example, a $400,000 loan at 2.75% would have had a payment of $1,633 per month. At 5.25% the payment for that same loan amount is $2,209, almost $600 more per month. Currently, rates are already at 5.27% and while there was talk of reduced mortgage rates looming, this seems unlikely.

Mike Fratantoni, chief economist at the Mortgage Bankers Association believes that the rates will plateau at their current level. The Fed seems more than likely to increase interest rates to deal with inflation, which doesn’t seem to have been controlled at this point.

The 2022 real estate market in Lake Tahoe will see inventory growing as less buyers are competing for each listing. Affordability will be a factor as home prices have sky rocketed. The thing about Lake Tahoe is that inventory is always limited. There is virtually no new construction, and we have a huge buyer pool from the Bay Area.

This means that it is still a great time to enter the market as a buyer, or to sell for top dollar as a seller.

Contact me today for a free property analysis of your home or for information on listings that are soon to hit the market. I’d love to help you find your perfect retreat at Lake Tahoe.