Normalcy Returns to the Tahoe Real Estate Market

The North Lake Tahoe and Truckee real estate market has undoubtedly shifted due to high mortgage interest rates, economic uncertainty, and limited housing inventory. These challenges have drastically reduced the number of active participants in the market, yet we continue to see buyers making moves, resulting in solid sales, and pricing stability.

Unmotivated Sellers Backstop the Market

The Tahoe real estate market has been backstopped by the fact that sellers are sitting on a mountain of equity, they continue to enjoy their homes, and for those that have mortgages, the loans are at very low interest rates. Most Tahoe sellers would prefer to wait for better market conditions to sell their beloved homes as time is on their side. The lack of housing inventory coupled with a reduction in the number of buyers has created a slow market, but one that is not falling apart.

Year over Year Market Conditions and Value Trends

Price Your Home Correctly and it Will Sell

Homes that are priced effectively are selling within 30 days or less, while overpriced homes are sitting on the market for 90 days+, often requiring price adjustments. Housing inventory has been low all year, but we are really starting to see a slowdown in the velocity of new listings, which is typical for this time of the year due to the seasonality of the Lake Tahoe real estate market. 2023 will be defied as a year of limited inventory that was plagued by fear, uncertainty and doubt. With limited inventory, we have seen a decline in the volume of home sales and you would need to go back 13 years to find a November with fewer sales than 2023.

Pricing a Tahoe home correctly is paramount in this challenging market. Additionally, we are seeing homes in the sub $1M price points move quickly, whereas homes in the upper-level price points are taking a bit longer to go into contract. In this market, Buyer’s 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. Homes with waterfront amenities, views, and modern amenities are selling well in this market.

Lake Tahoe Real Estate November 2023 Market Report Sales Chart

Lake Tahoe Real Estate November 2023 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: 2.07 Months of Inventory = Seller’s Market (kind of)

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)

• 582 Sales in the Last 6 Months
• 97 Sales per Month
• 3.23 Sales Per Day
• 201 Current Active Listings
• 201 Listings / 97 Sales Per Month = 2.07 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 2.07 months of inventory (homes for sale), there are very few active listings in any given neighborhood, creating an advantage for sellers. The number of buyers in the market is also down significantly, which takes away some of the seller’s power. When there is only 1 home for sale in a given neighborhood, the seller is in a good position to put a sale together with favorable terms.

In a more typical market, 2.07 months of inventory would produce bidding wars and above-average appreciation. This market is different due to the lack of buyers and high interest rates, so although this is technically a seller’s market, it feels more like a stabilized market.

Pending Home Sales Provide Market Insight 

Pending sale activity shows transaction volume equal to November closings with pricing off a bit. It’s not surprising that pricing is off as we are now into the holiday season, where unit volume tends to taper and pricing is tied to the limited available inventory. Currently, there are 56 pending homes in escrow with an average list price of $1.58M and a median price of $1.09M. Out of the 47 pending sales, 6 homes were priced above $3M, with 3 listings priced above $5M. These pending sales should help round out the 2023 selling season and it appears that we will finish the year with stable average pricing and some gains when looking at the median home price.

The Current Market Provides Opportunity for Buyers and Sellers Alike

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. 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 Market Report Archive

View All Tahoe Real Estate Market Reports
November 2022 Real Estate Market Report
November 2021 Real Estate Market Report 

Contact Dave Westall – Lake Tahoe Real Estate Agent

As the premier Tahoe Realtor, I’m here to provide insight, and help you achieve your real estate goals. Let’s schedule a Zoom meeting to chat and discuss how I can be of assistance.

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