Hello from Winter Wonderland! The early and heavy snow we received in both December and January has held up really well and the blizzard we saw this week put us over the top. We have an enormous amount of snow, and I expect that we will be skiing through May and maybe into June!
I wanted to write up a quick market update to show what the market did through the end of 2022. Here are the stats and my thoughts:
If you have read my updates in the past, you know that I use Tahoe Donner as the representative sample for the Truckee and North Tahoe market. On December 31st 2022, there were 24 active single family homes listings, compared with 6 active listing on December 31st the previous year. This is still a very tight inventory, considering there are over 5200 homes in TD.
I look at market trends broken down by quarters, and not years. That can help give a more accurate picture of what is happening now, versus what has been happening on average for the past year. So here is my breakdown of Q4 2022 vs Q4 2021:
First, here are sold comps for Q4 2021. There were 52 single family homes sold in Tahoe Donner that quarter, and the average price was $1,354,615.
Next, here is Q4 for 2022
As you can see, the average price fell fairly significantly, from $1,354,615 to $1,162,895, a decrease of over 15% across the different price ranges of homes. In addition, the average days on market jumped from 15 days in Q4 2021 to 53 days in Q4 2022. That's a big change!
Now let's look at how condos did during those same time periods. Here are the comps for condo in TD sold in Q4 of 2021:
And here are the comps for Q4 of 2022:
For condos, the average sale price fell from $568,916 to $472,200 between Q4 2021 and Q4 2022, that is a 17% decrease.
Finally, let's have a look at vacant lots sold in Q4 2021
And then in Q4 2022:
Vacant lots on average are selling for 11% less than they were in Q4 2021.
So what is causing prices to fall, and how far will they fall? Let's have a look at that.
Our market is highly influenced by the economy in the Bay Area. When Bay Area residents feel good about their finances, our market strengthens. And since the Bay Area is so tech centered, one can check the Nasdaq for an easy indication of this economic strength. This chart of the Nasdaq from Jan 1 2022 to Dec 31st, 2022.
As you can see, the Nasdaq was down almost 32% in 2022. That is huge, and that alone would have a big impact on our market. But when you look at interest rates, you can see the profound impact these two influences have.
The 52 week range of interest rates were from just over 3% to over 7%! And even though many buyers are paying cash, MOST buyers are still getting loans, and their buying power has been significantly diminished by interest rates.
Last, I want to mention the trends of working from home. The amount of people working from home peaked in mid 2020, and has been decreasing ever since. And while there are still a lot of people working remotely in our area, that number continues to drop, further decreasing demand for housing in both the rental market and homes for sale.
So the market is down from a year ago, now what? The short answer is that nobody knows for sure. The incredible ski season we are having will be tempered with the beating that some homes are going to take in the massive amount of snow that we have. I would bet that we see a lot of homes for sale this summer that are not designed will for the deep snow. Bad rooflines and driveways will be the primary culprits, and there will be a lot of maintenance needed this summer. But well designed homes and going to be fine, and Truckee and North Tahoe will always be a desirable area to live and visit. My guess is that inventory will remain relatively tight this year. I also would bet that the spring listing season starts late, and becomes the summer listing season. With just the snow we have on the ground now and in the short term forecast, I expect we will still have snow on the ground in many parts of Truckee and North Tahoe into June. So I expect that we will start to see inventory pick up in June in July through September, and that we might get a modest rebound in price trajectory.
If you are looking to buy or sell, feel free to reach out to me any time to discuss how I can help. Thanks, and enjoy the snow!
Allison James Estates and Homes
Check me out on Yelp!
What Clients Are Saying
"Dave is great! When the going gets tough it is nice to have someone in your corner that is experienced, professional, and without question has your best interests as a priority."