How’s the Tahoe-Truckee Market?

 

Updated April 4, 2020:

 

Summary since 3/26:

There are more properties exiting the market than there are entering the market; the numbers were equal two weeks prior. The number of cancelled escrows remains about the same with 7-8/week. The dynamic of higher-end listings having more confidence and re-entering the market was different. The two $1m+ listings that fell out of escrow decided to throw in the towel for now. The number of new escrows is similar to the prior 2 weeks with roughly 7 new deals per week.

 

The Details

 

New Listings: I am pretty amazed. There are 20 new listings since my last update on 3/26. Average price $1.2m, high of $8.5m. The $1m+ listings were spread out across our geographic area very evenly. The $8.5m is notable in that it is a non-lakefront home with manicured acreage and multiple pools located across the street from Zuckerberg’s big purchases. I would be very surprised if didn’t buy this as an amenity and for overflow – assuming he has large groups of visitors during non-covid times.

 

Expired Listings: 25 expired listings including two high end West Shore properties. In Tahoe, 100-day listings are very short and rare; 14 of these expireds had under 100 days on market which means they likely cancelled early due to coronavirus.

 

New escrows: There were a total of 7 new escrows since 3/26. Average price $1.1m, high of $2.8m on a beautiful home in Northstar. Interestingly, the Northstar house fell out of escrow on 3/17 due to a spooked buyer. It then re-entered escrow on 4/1. Unlike the new listings, activity was centered in Truckee. The only non-Truckee escrow is an investment property in Kings Beach for $450k.

 

Solds: As we get further from the Shelter In Place order (3/19), the solds are becoming more interesting for two related reasons. These buyers have the financial confidence, cash reserves and very strong desire to aquire that “Tahoe place.” Secondly, since these are typically vacation homes, most of these buyers are ignoring the Shelter In Place order and coming to Tahoe-Truckee to look at homes. For this weekend, CHP has issued a ‘No Travel to Tahoe’ warning: click her to watch video.

 

22 closed escrows since 3/26: Average price $923k, 3 sales over $2m. The escrows were spread out acorss our region but the highest concentration was Tahoe Donner with 4 sales.

 

Are all the escrows falling apart?

Date range 3/26 4/4
Total Failed Escrows 7  
     
Fell out of escrow then back to market as active: Tahoe Basin Truckee
  2 2
  Under $1m Over $1m
  4 0
     
Fell out of escrow then cancelled: Tahoe Basin Truckee
  0 3
  Under $1m Over $1m
  1 2

Dynamics are changing a little. Last update, there were 17 cancellations over the previous 13 days and just 8 cancellations in the last 9 days. Previously the sellers over $1m were showing lots of confidence and re-entering the market after their deals fell apart. This week both escrows over $1m did the opposite and exited the market.

 

Update for March 13-26, 2020

Believe it or not but we are still seeing new listings hit the market, properties entering escrow and also some successful closes of escrow albeit at lower quantities than in pre-coronavirus Springs. While we are seeing a high number of listings exit the market since the Bay Area shelter in place (SIP) started, the number of new listings since then is equal. This means there are an equal number of sellers who are hoping to take advantage of extremely low inventory and there are sellers who are giving things a rest until later – interesting stuff. An important note: sellers over $1,000,000 have more confidence than those at lower levels – more on that below. All ski areas have been closed for weeks and town traffic is way down although there are still people coming up on weekends which is becoming a hot topic. We have seen a lot of second homeowners come to Tahoe for an indeterminate period to weather California’s SIP. 

 

Once things ease up we will have a ton of pent-up demand for Tahoe-Truckee homes. We will likely also have a stock market on the rise and very low interest rates. Of course, none of us know when this will be but there is always a demand for real estate in Tahoe-Truckee. I’ve found that when we have natural disasters, serious buyers focus more attention on Tahoe as a respite from the rigors and realities of sub/urban living. 

 

While showings are somewhat challenging, real estate has been ruled an essential service so showings are permitted – we just need to be smart in how we handle them.

 

Are all the escrows falling apart?

 

I dug deep and have been parsing data to help let you know what’s been happening since the CA-wide school closures on 3/13. I also worked through an extremely challenging escrow for a Dollar Point lakeview home which we closed on 3/24/20 for $4,375,000. At one point a price reduction request was contemplated but alas it didn’t materialize and all parties worked together to get this fantastic sale completed. Note: at $1071/foot, this sale represents the record-high price per foot for a non-lakefront in Dollar Point.

 

As for the data, check this out – I looked at every Active listing as well as all Cancelled/Expired listings since 3/13. It’s easy to find stats on how many homes have left the market/cancelled since then. What is much more difficult to see is this: how many homes had fallen out of escrow. Further, what did those sellers decide to do next – keep trying or throw in the towel?

Date range 3/13 3/26
Total Failed Escrows 18  
     
Fell out of escrow then back to market as active: Tahoe Basin Truckee
  7 7
  Under $1m Over $1m
  9 5
     
Fell out of escrow then cancelled: Tahoe Basin Truckee
  1 3
  Under $1m Over $1m
  4 0

As mentioned above, sellers over $1m are not giving up. Buyers and sellers of high value properties still have levels of confidence.

 

Note: the escrows that fell apart did so quickly, most were under 5 days. This means it was simply weak constitution as opposed to bad inspections aka the cancellations were purely due to coronavirus. One interesting cancellation was a spec home in Old Greenwood for $2.1m which then reentered the market as raw land for $275k. Clearly the seller now prefers to not even attempt to build the home and would rather just shed the land. Interesting stuff.

 

Where are we headed?

 

We are likely headed to the standstill that is being witnessed in The Bay. But our market lags behind SF’s and so too, it seems, do our social practices. Our initial school closures and SIP came a week after SF’s and so maybe our real estate market still has some life in it right now for the same reasons (UPDATE: This trend continues – our schools cancelled the remainder of 2020 exactly a week after the Bay Area did so). Maybe this is wishful thinking but in the near term I see some activity at the higher price bands. High-end buyers have levels of financial sophistication, diversity, reserves – and patience – to endure a drawn out Covid situation and their desire for a “Tahoe place” gets strengthened in these times. However, showings are challenging; we are performing Virtual Showings at this time

 

 

High-end examples: These two properties at $4m and $6m were in escrow before coronovirus hit CA. They removed all contingencies on 3/20 and 3/23 which are two of the worst stock market dates on record: click here. This property in Martis Camp closed on 3/25 for $9,500,000: click here. Another example is my $4,375,000 non-lakefrone sale mentioned above. Note: Buyers are needed to drive markets and so I have info on on high-net worth individuals’ asset allocation further down this page.

 

Where is current market activity?

 

In the Tahoe Basin, 77% of all activity is under $1m. There have been slightly more new listings than there have been Cancelled/Expired listings.

There are 23 single family home escrows averaging $978k with a high of $2.2m. There are a total of 56 active home listings from Rubicon to Kings Beach which is very, very low. Basin Condos are all but dead in the water with 21 actives and just 4 escrows which are all under $478k.

 

Here are all Basin price reductions in the last 13 days which is when CA cancelled all schools: click here; nothing crazy but still interesting to monitor. Usually there are at least a handful of price increases but in the last 2 weeks there have been none.

 

Truckee-Tahoe Donner-Martis Camp have seen similar numbers since 3/13 with the amount of new listings roughly equalling the number which have decided to exit the market for now.

 

In the greater Truckee area, 64% of escrow activity is under $1m. There are a total of 49 escrows; 18 of these started after 3/13. Just 10 of the 158 active listings hit the market since 3/13.

 

 

Here are the 11 Basin homes which went Pending since 3/13 when all schools in CA were closed: click here. The prices range from $295k – $2m. Pending charts for The Basin and Greater Truckee:

Squaw Valley is closed for skiing. Squaw real estate sales were pretty solid pre-March but are now slowing. 20% of listings are in escrow but just 1 entered contract since 3/13. We will see whether or not the escrows hold together.

 

In Northstar, there are 4 home escrows from $1.05m – $2.8m. Click here to see the two which entered escrow since 3/13: click here.  This Northstar escrow for $3.9m fell out of escrow on 3/16: click here. The buyer was spooked by coronovirus’ ramifications. 

 

Where is the fallout?

Stay tuned. It’s too early to say for Tahoe real estate. This article in Curbed (click here) says that things are all but stopping in SF. Since our market follows the City’s, we are likely headed in the same direction. Keep an eye on this page which I will update moving forward.

 

 

Who are the high-end buyers?

 

The average age for a Tahoe lakefront buyer is in the mid-50’s. This is the very beginning of Gen X. Based on a 2018 high-net worth study by U.S. Trust, the private banking arm of BofA, Gen X holds about 54% of their wealth in stocks, 16% in bonds, 16% in cash, the rest in alternatives. My financial advisor estimates that he is seeing a 5-10% reduction in portfolios of his higher-net worth clients due to March ‘20 events. Obviously our market activity is significantly diminished but there will be some high net-worth families who still decide to drop in on a nice Tahoe home if there are listings which they are able see.

 

 


To see my January 2020 aka pre-Corona virus update, click here


Quick Market Data

For more detailed, Tahoe regional breakout stats and charts click here.

 

North + West Shore, single family and condominium sales

Year Total Volume # Units Sold Ave. Days on Market Ave. Price Median Price
2019 $403m 408 76 $990k $601k
2018 $538m 436 71 $1.2m $655k
2017 $431m 475 78 $907k $620k
2016 $351m 408 101 $859k $555k
2015 $371m 434 106 $856k $535k
2014 $396m 346 101 $874k $511k
2013 $420m 307 107 $733k $471k

 

Truckee-Tahoe Donner, single family and condominium sales

 

Year Total Volume # Homes Sold Days on Market Ave. Price Median Price
2019 $445 594 46 $751k $650k
2018 $423 584 41 $725k $638k
2017 $443 656 49 $676k $594k
2016 $372 614 62 $610k $540k
2015 $312m 543 63 $575k $502k
2014 $282m 489 64 $577k $500k
2013 $314m 582 68 $539k $479k

 

Click here for my 2018 Recap

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“We are very happy with the deal, Alex. You made it happen and you are a hero.”

– Neil and Karen B. Sellers of 3266 Edgewater. Closed price $8,199,000. Record breaking lakefront sale in Dollar Point.

 

“We enjoyed working with you and will be in touch when we want to sell more property. Thanks again for getting it sold.”

– Bonnie and Ken. Forty-year Tahoe residents with multiple properties and businesses. Had previously worked with another agent.

I start from the perspective of doing what’s right for you and your property. I shoot straight regarding value and how we can maximize the sales price. I am known for creative, high-quality marketing and effective negotiations. I provide personal attention to both you and your property. I keep a foot on the gas throughout escrow. I attend appraisals for unique and high-end properties to ensure value is attained by the buyer’s bank. I watch the details. I use the best stagers, photographers, web developers and the finest print and online media. The end result is your property standing head and shoulders above competing listings and your sale happening efficiently. This is especially powerful when coupled with Chase International: Reno-Tahoe’s regional leader with over $1.5 billion in annual sales.

3266 Edgewater Drive. Sold by Alex for $8.199m, July 2015.

3266 Edgewater Drive. Sold by Alex for $8.199m

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