How did the real estate market in Truckee and north tahoe do in 2018?
Greetings and happy 2019! I'm happy to report that although there seems to be some unease in the minds of some owners, prospective buyers and agents that I speak with, the local market continues to do very well. Driven by an unrelentingly strong Bay Area economy, buyers continue to outnumber sellers. Inventory has remained relatively low for the whole year, while going through its normal seasonal swings. As is normal for winter, our inventory is declining and is very much in line with where we were last year. Let's look at some year over year numbers, courtesy of David Hipkins of Dickson Realty.
As usual, I am using Tahoe Donner sales numbers as a bellwether for the Truckee/North Tahoe Market, and the numbers look pretty close to where we ended up in 2017. First, lets look at some similarities: In 2018 there were 277 single family sales in Tahoe Donner, compared with 278 the year before. How's that for close? One clear difference is that people are buying more expensive homes. To see that, we just need to look at the number of condos sold. Most condos in Tahoe Donner are considered entry level for TD properties. The number of condos sold in 2018 dropped sharply from 81 to 56, while average prices for these stayed very consistent over the course of the year. This is evidence of buyers going after more of the mid level to higher end properties. Further evidence of this is the increase in the average and median prices for single family homes. The average went from $730,000 in 2017 to $771,700 in 2018, an increase of 5.6%. That does not mean, however that all price ranges increased by that amount. It does indicate an increase in higher end homes sold year over year. One very bullish sign here is the number of vacant lot sales. This is evidence of local builders seeing a path to be able to profitably sell their spec homes in 2019. It is also worth noting that the number of vacant lots in Tahoe Donner is down to 607. That is getting pretty low and the idea of total buildout in Tahoe Donner is becoming more real each year.
So what's going to happen with real estate in 2019? That would depend on several factors. Will there be a national recession? How will the tech industry do in the next year or two? Are there enough well paying jobs in Truckee and North Tahoe to support home prices for the locals? Will we have good snowfall this winter? These are all factors that will determine the supply and demand for homes in the coming year. While I don't know how it will go, we have seen that our market has always done well in the long term. We have a very limited amount of land that can be developed. Urban sprawl is not an option here. We are bounded by both geopolitical and and physical boundaries in our ability to build lots of housing here. Truckee/Tahoe is surrounded by Forest Service Land, National Forest and unbuildable mountainous terrain. This inherent supply limitation bodes well for the market long term. Also, the Town of Truckee has been soliciting the advice of locals as to what kind of building should happen in Truckee going forward. I was recently at a town housing meeting attended by around 150 people and by far the locals are asking for more affordable housing to be built in and around the downtown area. Single family homes came in dead last as far as what the attendees wanted to be built. Most wanted medium to high density apartments and condos to help reduce the strain of the local housing crisis. Middle to low wage earners simply can't find places to rent in the area. This has been worsened by the proliferation of short term vacation rentals in the area. If the building focus begins to shift away from single family homes, this will further strengthen the existing market.
Let me know if you have any questions, or if there is anything I can help you with!