Total Residential Sales:
What a year!!!
No matter your perspective, 2020 was a year like no other. The first 2 months were normal enough, but then things started happening that we never could have imagined. COVID-19, of course, was at the heart of it all. In mid-March stay at home orders were announced which started a roller coaster in our real estate market. Mid-March through Mid-May was eerily quiet. Many people were visiting our area, choosing to shelter in place in Tahoe, but real estate sales were not a priority and as an industry, we were trying to figure out how do we even sell homes? Canceled transactions were almost as common as new escrows. Layoffs and furloughs were common throughout the industry, as were inquiries about unemployment and small business loans. Then, on Memorial Day Weekend, the flood gates opened. For many who had just worked remotely for 2 months, it meant recognizing that they could work remotely in Tahoe. Our market has taken off since. Prior to 2020, the record for residential sales in a single month, in the Tahoe Sierra MLS, was 182. Every month, from June through December were a minimum of 18% above their record, and 4 months were between 45-60%, above the old record.
More residences sold in the last 7 months (1,716) than in any full year since 2005. The 6 month period from July to December, eclipsed every year since 2005 except for 2017 (when there were 1,567 sales). When the year came to a close, the total volume of residential sales had jumped from $1,377,231,472 in 2019 to $2,405,272,099 in 2020. Yes, that’s a 75% increase representing more than a $1 billion additional dollars! With activity exploding at this level, prices surged. The average sales price for the entire year was up 17% compared to 2019 ($1,149,198 compared to $985,849).
The average sales price for the second half of the year was $1,209,972, which is 23% higher than the average for 2019. The median sales price for the entire year was up 16% compared to 2019 ($780,000 compared to $670,000). The median sales price for the second half of the year was $825,000, which is 23% higher than the median for 2019.
Active Residential Inventory:
Active Listings: There are currently 162 residences actively for sale, down from 200 one month ago and 475 at this time last year.
Contrary to what you might think at first glance, the number of new listings in 2020 was actually 20% higher than the number of new listings in 2019 and particularly surged in fall when was double the number of listings in September and October as there was the year prior. So, despite significantly more homes coming on the market, our active inventory is barely more than 1/3rd of what it was a year ago.
Current Pending Sales: The number of properties going into contract has slowed since summer, but it is still busy for the time of year. 108 residences went into contract in December compared to just 76 in December 2019.
This is the 8th consecutive month that the number of new contracts was at least 30% higher than the same month of the previous year. Current inventory represents about 1.5 months of supply relative to December activity, and about one month of supply relative to 4th quarter activity.
Coldwell Banker Ranks #1: Among all brokerages in North Lake Tahoe and Truckee, Coldwell Banker continues to rank #1 in total number of sales. For the previous 12 months, Coldwell Banker represented 12.5% of sales. This represents 17% more transactions than our next closest competitor (10.7% of sales).
Sales Under $500,000: For the year, residences priced under $500,000 represented just over 18% of sales or 381 properties sold. In 2019, 28% of sales were in this range.
Mid-Range Market Sales $500,000 to $999,999: There were 1030 sales between $500,000 and $999,999, representing 59% of total sales. In 2019, 49% of sales were in this price range.
Luxury Home Sales Over $1 Million: Luxury sales are the big story. 681 properties sold over $1 million, representing 32% of total sales. This is up 105% from the 333 sales in 2019 (which made up 23% of total sales).
What’s Going On Looking Forward? What happens next? That’s really hard to predict. One thing is clear, demand still far outweighs supply meaning the upward pressure on pricing and properties selling in just a few days with multiple offers is sure to continue. What is not clear is how much supply there will be. Right now inventories of properties for sale are at extreme lows. Will enough homes come on the market to continue to see record numbers of transactions? Or, will the number of transactions decrease purely because of a lack of supply? We are already starting to see new listings come on the market and are speaking with current owners that are considering selling to take advantage of the current market conditions. We are optimistic that our inventory will start to catch up with demand and the market will be at least slightly more balanced by the end of the year. Why are we seeing such extraordinary dynamics in our housing market? The residential real estate market is solid around most of the country for one primary reason . . . right now, HOME is more important than ever. People are spending more time in their homes than they have before. In Tahoe, we have a major amplifier to that. The profile of our typical buyer has evolved which has driven demand for homes in Tahoe to all-new levels. While the 2020 trend was that Coronavirus created a demand for instant gratification for buyers who wanted to be here now . . .it has also created a long term shift that we expect to see continue Buyer demand into 2021. Buyers have come to realize that they will continue to have more flexibility with their work schedules and the ability to continue to work remotely, which means the ability to spend more time in Tahoe. This reality, coupled with low-interest rates and soaring wealth will continue to keep the demand high for Tahoe properties throughout 2021.