Residential Sales Summary 2020
After a very brief period of uncertainty, we are suddenly experiencing a dramatic surge in buyer activity. Before the COVID outbreak, we were already noticing a trend of more people being able to work remotely and making a permanent move to Truckee. As even more people are learning their jobs may be remote indefinitely, we are witnessing an even more considerable increase in this trend. Also, people who were on the fence or had not even been considering a property in the area now suddenly want to buy a vacation home since other travel and entertainment is going to be uncertain for the next 12-18 months. While there will be some cases that a current owner has been put into a financial position that they want/need to sell (i.e., a restaurant/small business owner that is being negatively impacted), this is currently an exception and not the norm. Most 2nd homeowners do not appear in any stress and are seeing greater value in their vacation homes since it gives them a place to escape to for a change of scenery.
Last month we wondered aloud if the virus would have an impact on our typical market cycles, possibly delaying both buyers and sellers from entering the market. There has been a definite statement in the first couple of weeks of May that there will be no delay at all. We seem to be perfectly in tune with our typical seasonal cycles, despite the shelter in place ordinance. Seller’s and their agents are getting their homes into the market place, as we typically expect in spring, and taking advantage of virtual tools to market their homes. On the demand side, we have seen solid buyer activity in the last couple of weeks. Thirty-six residences have gone into contract so far in May (about 3 per day), which is a dramatic uptick from the 1 per day we saw in the second half of March and all of April. We are also approaching the levels we would expect in May in a “normal” year.
Putting all of these factors together, along with attractive interest rates, we could be looking at potentially low inventory and continued high demand as we enter the summer selling season.
Total Residential Sales: As you might expect, April sales activity was slow. The good news, however, is there was activity. Sixty-one residences sold for the month. That mark is just 63% of the number of sales in April 2019 and the lowest number of April sales in the last 10 years. However, it is 70% of the 10-year average for April. When considering the circumstances, the percentage of normal sales is actually a surprise to the positive! Despite the slow April, year to date sales are still at 96% of where they were for the same period in 2019, and 93% of the 10-year average. It’s also worth mentioning, this is the first month, out of the last 7, that the number of sales wasdown relative to the same month theprior year. The market definitely came into this period strongly and is showing signs of remaining strong.
Active Residential Inventory: Active Listings: This is the time of year when we expect the inventory of homes for sale to start building. It is typical to see the number of new listings double, or more, between April 1 and July 1. There are currently 382 residences (266 homes and 116 condos) actively for sale, up from 331 a month ago. Last year at this time there were 401 residences for sale. Current Pending Sales: There are 88 residences currently in-contract. 31 of these went into contract in April. Relative to the activity level in April, there is close to a 12 month supply of inventory. However, activity has picked up significantly in early May (see more details below). Coldwell Banker Ranks #1: Among all brokerages in North Lake Tahoe and Truckee, Coldwell Banker continues to rank #1 in the total number of sales. For the previous 12 months, Coldwell Banker represented 16.29% of sales. This represents 74% more transactions than our next closest competitor (9.36%). We were also the fastest to adjust to the current market environment and closed 19% of the transactions in the market place for April.
Median and Average Sales Prices: For the period January through April, the median sales price was $649,888 (down slightly from $650,000 last year) and the average sales price was $994,736 (down from $1,073,992, but that number was skewed by a $37 million sale at Sunnyside. If you remove that sale, the average for 1st quarter 2019 was $962,073). For the month of April, the median sales price was $653,194, and the average was $928,616.
Sales Under $500,000: For the period January through April, residences priced under $500,000 represented just over 28% of sales or 88 properties sold. Of those sales, 48 were condos. For the same period in 2019 there were 96 properties sold in this price range, 66 of which were condos.
Mid-Range Market Sales $500,000 to $999,999: For the same period, there were 146 sales between $500,000 and $999,999, representing 47% of total sales. Twenty-two of the sales were condos. For the same period in 2019, there were 151 sales, including 21 condos.
Luxury Home Sales Over $1.0 Million: 78 properties have sold over $1 million, representing 25% of total sales. This is up from 75 sales in the same period in 2019.
REO & Short Sales: Distressed sales have been very rare the last few years, but that definitely could change going forward. So far this year, there have been just 2 foreclosure sales.
What’s Going On Looking Forward? Regardless of market trends, we are here. We have the tools and know how to operate in a virtual world. It’s important to mention that the Federal and State governments are including real estate as an “essential service”. That said, we are doing everything we can to reduce person to person contact and to obey social distancing guidelines on the occasion live interaction is necessary. Selling real estate can be done without creating safety issues within our community!!