The much needed rain came and went but as we move into the heart of Tahoe’s peak summer season the dynamics of the real estate market have begun to shift. The remarkable momentum experienced region-wide over the first half of 2014 has begun to segment with divergent trends becoming apparent.
The luxury segment continues to show the same robust growth that has fueled the overall market for much of 2014 while purchases below $1,000,000 have begun to lag.
Overall, July saw 106 total transactions. This number is exactly the historical average for July but lags the same month in 2013 by 23%. Conversely, total real estate volume has risen 6% from the same period, indicative of fewer homes selling but at much higher prices. Further evidence of divergence can be seen in the change in average price from 12 months prior (+37%) buoyed by 15 sales greater than $1,000,000, and median price (+9%).
A further look at purchases in the luxury segment shows incredible year over year growth:
|$5,000,000 and up||9 sales||+300%|
The composition of the 15 transactions at $1,000,000 above show an interesting mix of lakeside and resort purchases in a time that is often more biased towards summer product. Included are eight lakeside sales (including two on Donner Lake) from $1,100,000 – $9,250,000; two Mountainside properties at Northstar from $1,520,000 – $1,804,000; two Alpine Meadows homes $1,150,000 and $1,800,000; two Schaffer’s Mill Mountain Lodges for $1,000,000 and $1,450,000; and a Martis Camp cabin for $2,900,000.
At the other end of the spectrum, a slight pause to the market’s momentum is apparent for properties below the luxury threshold. Contrasting the velocity of premium sales shown above, year-to-date purchases below $1,000,000 are down 20% from the same period in 2013. A certain amount of this slowing can be attributed to a lack of available homes in this price range early in the year. In recent months a considerable amount of new product has been introduced to the market however many sellers are clearly overreaching with asking prices. While median price for this segment of the market is up a healthy 6%, sellers are seeking a 24% premium over comparable prices creating a wide divide for prospective buyers to bridge. The resulting stalemate has contributed to slower transaction volume and increased inventory levels.
As we look to towards the latter part of summer, historical trends indicate that purchases will increase through the peak months of August, September and October as consumers return from vacation and begin making purchasing decisions. This often coincides with sellers developing a more realistic picture of market value and either adjusting price or departing the sales arena.
Indications of demand across all price points are very strong as measured by the level of inquiries through Tahoe Mountain Resorts’ showrooms. The region is swollen with visitors enjoying all that the region has to offer ask we bask in another perfect summer.
Tahoe Mountain Resorts Real Estate