Tahoe/Truckee Market Report Q2

Summer Real Estate Boom Arrives Early

Strong demand, a limited supply of homes and unseasonably hot weather across the nation boosted the number of homes sold and drove home prices in the greater Lake Tahoe and Truckee region sharply higher in the second quarter, according to a report by the research division of Better Homes and Gardens Mason-McDuffie Real Estate based on an analysis of MLS data.

Record or near-record temperatures in the weeks following Memorial Day attracted additional homebuyers interested in vacation, second home or investment properties in the region’s favorable mountain climate. With distressed properties no longer putting downward pressure on home prices and an extremely limited inventory of homes on the market, many homebuyers experienced multiple offer scenarios. Regionwide, only 134 existing, single-family detached homes were listed for sale in the combined Tahoe/Truckee market as of the final day of the second quarter of 2013, slightly lower than the 145 homes on the market a year ago but down 50 percent from 271 homes available for purchase at the end of the first quarter.

Strong demand, limited inventory and a change in the mix of homes sold sparked a sharp increase in the median price of a home. Across the region, nine of 11 communities reported double-digit increases in the median price of a home compared with the same period a year ago. Home sales, meanwhile, were flat compared with a year ago in the Lake Tahoe area but up 20 percent in the Truckee area.

In the Lake Tahoe area, a significant change in the mix of homes sold compared with the year-ago quarter sparked a 485 percent increase in the median price of a home sold in Tahoe City, which rose from $350,000 in last year’s second quarter to slightly more than $2 million in this year’s second quarter on the strength of a single home sale. Meanwhile, a higher percentage of luxury home sales caused the median price in Squaw Valley to rise from $560,000 a year ago to $848,500 in the most recent quarter, an increase of 52 percent. Along the North Shore, the median home price rose by 20 percent to $399,000, while it was up 13 percent on an annualized basis to $625,000 in Alpine Meadows.

In the Truckee area, the number of homes sold in the Town of Truckee rose 59 percent from 41 homes sold a year ago to 65 in this year’s second quarter, while 71 homes changed hands in Tahoe Donner® in the second quarter, up 22 percent from a year ago, when 58 homes were sold. Home sales elsewhere in the Truckee area were on par with the year-ago quarter. The median price of a Truckee-area home rose on both a quarterly and annualized basis in the Glenshire community, up from $294,500 a year ago to $391,000 in this year’s second quarter, and in the Town of Truckee, up from $325,000 in last year’s second quarter to $425,000 this year. The median sales price was up 20 percent in Northstar, rising from $640,000 last year to $768,600 in the second quarter of this year.

The number of days a home was on the market in the second quarter fell considerably with few exceptions, reflecting the combination of fewer homes on the market, more buyers, and higher home prices and mortgage interest rates potentially on the horizon. As a result, homebuyers were quicker to make a decision to purchase. This was particularly true in the Truckee area, where the average home was on the market only 67 days before attracting a final offer to purchase, down from 114 days in the second quarter of 2012. In both the Town of Truckee and Donner Lake, the number of days on market fell by 66 days compared with a year ago, and by 59 days in the Glenshire area. In the Lake Tahoe area, where the sale of a single home skewed Tahoe City results, the number of days on market before sale fell by 63 days from a year ago in Squaw Valley and by 52 days along the North Shore.

Looking ahead to the late summer and early fall, when most of the region’s home sales traditionally take place, residents waiting for an opportune time to put their home on the market may find that time has arrived. Those who work with an experienced REALTOR®with local market knowledge will find that competitively priced homes will generate a great deal of buyer attention and attract offers within the first few weeks of being listed. Potential homebuyers, meanwhile, will need to be prepared to present a strong offer with considerable down payment or few contingencies.

For more information or questions contact Dirk.

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