Lake Tahoe Real Estate January 2024 Market Report

Lake Tahoe Real Estate Market Shows Momentum in January 2024

The N. Lake Tahoe, CA real estate market is off to a great start in 2024 with total dollar volume up 87% over January 2023. Limited housing inventory and increased buyer demand helped push the average home price up 6% while the median home price jumped 28% year over year. It appears that the soft market conditions of 2023 are in the rearview mirror with the Tahoe housing market now on a more positive trajectory with Q4 momentum carrying into January 2024. We’ll have to wait and see how Q1 finishes up, but with mortgage rates softening, fears of a possible recession easing, and more buyers entering the Lake Tahoe real estate market, it appears that the market is on a positive path.

Lake Tahoe Real Estate Market Report January 2024 Highlights

• Average home price up 6% over January 2023, Median home price up 27%
• Number of sales (unit volume) up 79%
• High Sale: Lahontan new construction at $4,900,000
• 70% of all January home sales were priced over $1M

Buyers Return to Tahoe Market Amidst Limited Inventory

In 2024, we anticipate that listing inventory will be slightly higher than in 2023, which saw the lowest housing inventory levels since the 2008 recession. Sellers in Lake Tahoe are benefiting from substantial equity in their properties, enjoying their mountain homes, and benefiting from historically low mortgage interest rates. Many Tahoe sellers are inclined to wait for better market conditions before letting go of their cherished Lake Tahoe homes, knowing that time is on their side. If the number of listings remains depressed in 2024 and buyer demand rises, we can expect competitive market conditions leading to price increases. As prices rise, more sellers may decide to enter the market, but it may take some time for supply and demand to reach equilibrium.

In a scenario where buyers remain timid due to interest rates and fears of economic uncertainty, we would likely see flat market conditions with pricing stability due to the anticipation of limited inventory.

Year over Year Market Conditions and Value Trends

Tahoe Buyers are Looking for Value

In 2024 we anticipate strong demand for homes in the sub $1M price points and homes priced above $1M will take a bit longer to go into contract, unless these homes pique a buyers interest. In this market, buyers want value, which can mean a lot of things, but if your home is not delivering perceived value, then it will likely be a more challenging sale with longer days on market. Homes with waterfront amenities, views, and modern amenities are currently in high demand. With limited inventory in the Tahoe real estate market, now is a great time to consider selling your property as buyers are looking for good quality homes in desirable neighborhoods.

Effectively Priced Homes Sell 3x Faster

With fewer buyers in the market, the best-priced homes are moving quickly, while other listings tend to linger on the market, often requiring multiple price reductions and deeper negotiations to get a sale done. We have seen over the last 12 months that homes that are priced right sell 3x faster than homes that are not priced correctly. Buyers remain excited about newer homes, updated homes, and properties located within desirable communities. Inversely, older/dated homes with differed maintenance issues are taking longer to sell as the market is timid when purchasing homes that need significant improvements, even if priced well within the market segment.

Lake Tahoe Real Estate Year January 2024 Market Report Sales Chart

Lake Tahoe Real Estate January 2024 Market Report Sales Volume Chart

*North Lake Tahoe, CA and Truckee Single-Family Home sales including lakefronts. Data is taken from the Tahoe-Sierra Board of Realtors, MLS Areas 1-9.

Absorption Rate: 1.55 Months of Inventory = Seller’s Market (*hybrid)

The term absorption rate refers to a metric used in a specific real estate market to evaluate the rate at which available homes are sold during a given period of time. Here are the statistics used to determine the absorption rate for the North Lake Tahoe, CA and Truckee real estate market.

Absorption Rate (single-family homes)

• 559 Sales in the Last 6 Months
• 93 Sales per Month
• 3.1 Sales Per Day
• 144 Current Active Listings
• 144 Listings / 93 Sales Per Month = 1.55 Months of Inventory = Seller’s Market
  • 1 to 3 Month Supply of Inventory = Seller’s Market
  • 4- 6 Months of Inventory = Balanced Market
  • 6+ Months of Inventory = Buyer’s Market

With only 1.55 months of inventory, there are very few active listings in any given neighborhood, creating an advantage for sellers. A number of buyers remain on the sidelines due to higher interest rates and uncertainty of what the future of interest rates and the Tahoe housing market holds. With that said, mortgage interest rates started softening in Q4 2023 and buyer activity has noticeably increased since the Fed started talking more positively about their battle with inflation. Economists believe that the potential for a recession is fairly low, which has provided buyers with a higher level of confidence. 

In a more typical market, 1.55 months of inventory would produce bidding wars and above-average appreciation. The current Tahoe real estate market is different due to the limited number of buyers and perceived high interest rates. Although this is technically a seller’s market, it feels more like a stabilized market (supply and demand in balance).

Pending Home Sales Provide Market Insight 

 Currently, there are 43 pending single-family homes in escrow with an average list price of $2.08M and a median price of $1.75M. Out of the 43 pending sales, 75% are priced over $1M with 7 homes above $3M, and 3 listing above $5M. These pending sales solidify that the market is gaining momentum in a typically quiet time period (winter). The average marketing time for the pending sales in at 87 days and 40% of these pending sales had price reductions, showing that buyers are taking advantage of lingering listings and negotiating discounts.

2024 Lake Tahoe Real Estate Market Predictions 

The Lake Tahoe real estate market is poised to have a good year in 2024 as buyer activity is anticipated to increase as mortgage interest rates fall. Housing inventory (listings) is expected to remain low, so it would seem that if demand rises and the number of listings remains low, we will see price increases throughout the year. If buyer activity remains low and inventory is constrained, the market could be flat in 2024.

• As mortgage interest rates come down, buyer demand will increase
  • rates are expected to come down throughout the year
  • the sweet spot for strong buyer activity is between 5.75% and 6.25%
• If inflation continues to fall the market will have a positive response
  • keep an eye on the Federal Reserve inflation data
• Avoiding a recession will boost buyer confidence
• A higher number of buyers in the market will put upwards pressure on pricing
  • bidding wars might return, especially at lower price points
• Limited housing inventory is expected 
  • Sellers have lots of equity and will only sell when timing is right
• Demand for quality homes in good neighborhoods will likely increase

Lake Tahoe Real Estate Market Report Archive

View All Tahoe Real Estate Market Reports
January 2023 Real Estate Market Report
January 2022 Real Estate Market Report 

Contact Lake Tahoe Realtor, Dave Westall

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