First Half 2020 Lake Tahoe Market Report
The Growing Demand for Quality of Life
As we look at the first half of 2020 real estate sales activity at Lake Tahoe, there are several factors that have influenced the growth in sales numbers. First on the list is the demand for the quality of life that owning a home at Lake Tahoe can offer.
During the first quarter of 2020, home sales were stronger this year over last year. At the beginning of the second quarter, California's shelter-in-place order slowed sales activity for April and May. At the same time, many buyers were considering options for a better quality of life, while sheltering.
Many Silicon Valley companies gave workers the option to work remotely on a permanent basis. These factors drove higher than normal demand for Lake Tahoe real estate during the month of June 2020.
Third Quarter Begins with Lower Inventory
As we move into the third quarter of 2020, we are looking at low supply vs. high demand. The average days on market is quickly shrinking, and record-breaking pending sales has also reduced inventory. All of these factors are driving a recovery that we expect to extend into the third quarter.
The shelter-in-place order, remote schooling and the option to work from home has actually given buyers in our feeder markets an opportunity to completely transform their lifestyle. Many are swapping the idea of using their resort home on the weekends to make it a primary residence, commuting to the Bay Area once or twice a week.
We finished June of 2020 with more than 200 closed transactions and the activity over the last two months led to a whopping 400+ properties in pending status. This record-breaking activity has led to the reduction of available inventory.
When we look at the first half of 2020, the overall sales picture is very good and we are seeing multiple offers for the first time in many years.
While the median prices in many areas began dipping in the beginning of the second quarter, this stronger than normal demand against lowering supply will probably lead to rising prices. Builders are also reporting increased activity as the availability of homes are reduced. We will probably see an increase in lot sales too.
This Year vs. Last Year Activity
To see how quickly homes are currently selling, in 2019 on the North Shore, the average days on market was 101 compared to only 45 days in 2020. The days on market for Truckee homes for sale dropped from 86 to 57 in 2020. Last year, there were 262 sales of single family residences during the second quarter. This year, we have 308 sales. It is important to remember that this number would certainly be higher, had we not experienced that dip at the onset of the shelter-in-place order.
Last year, the number of sold properties over $2,000,000 was at 19. This year, we completed the second quarter with 25 properties selling over $2,000,000 in the Tahoe Sierra MLS.
As more people are accepting the drastic lifestyle changes that sheltering has forced on us, that same factor is leading them to choose a resort community over the congestion of city life.
Rental Activity Also Strong
The rental demand for properties at Lake Tahoe has also experienced a similar boom. While normal activities like the fourth of July fireworks and concerts in the park were cancelled, visitors can still enjoy floating down the Truckee River and hiking the back country trails. Since Farmer's Markets are considered an essential service, many have opened this year.
Safety Measures Lake Tahoe
Both tourists and those who live as permanent residents in Lake Tahoe need to be kept safe from virus exposure. The area has implemented many safety measures for the protection of both. However, it is interesting that for real estate market activity in Lake Tahoe, we have seen how a negative event can actually lead people to make better lifestyle choices. The second half of 2020 looks to be a strong growth picture for Lake Tahoe.
Whether you are thinking of buying or selling your home at Lake Tahoe, I would love to help you. Contact me today for a free market analysis or for specific neighborhood market reports. I love introducing people to the outstanding quality of life that comes with home ownership at Lake Tahoe!
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