Total sales volume from July through September totaled $540,385,789. The second ever period eclipsing a half billion and pushing higher than the same time in 2017 by 7%. With the total number of transactions lagging by 7%, the market is being driven by premium inventory. In fact, average price (a metric more easily manipulated by extraordinarily high prices), surged by 14% from $903,576 in 2017 to $1,037,785.
Driving activity during Q3, were an extraordinary number of premiere transactions of both Tahoe lakefront properties and Martis Camp estate homes. In total, 4 properties crested $10 million including Tahoe Mountain Realty’s $24,000,000 masterpiece sale on Tahoe’s West Shore. Martis Camp, a community that didn’t exist when the market last peaked in 2006, transacted ten homes in the last 90 days from $4,185,000 – $11,750,000 adding $64,000,000 to the region’s transaction volume.
With any market, the wealth is not distributed equally. While most residential structures have appreciated at a healthy clip, raw land has continued to depreciate. In addition to simple supply and demand considerations, land values have even greater variability based upon construction costs. Building cost has soared at a rate even greater than either inflation or home appreciation due to a complex combination of rising commodity prices, regulatory costs and exceptionally tight (and busy) labor supply. As a result, residual land value, defined as the value of a finished new home minus the cost to build, is actually inverted in many neighborhoods throughout the region. As a result, land values hover closer to mid-recession lows than peaking home values.
Looking ahead, Q4 appears poised to maintain at the steady pace of recent years. At 5 month’s supply, there is sufficient inventory to the consumers currently engaged though many are accumulating significantly days on market for having been ambitiously priced.
While the current bull market is showing no sign of major correction, a plateauing appears inevitable as the buyer pool becomes saturated. Whether such a slowing comes before the end of 2018 is yet to be seen. Regardless, the beauty and health of the region remain recession-proof commodities.
Pick of the Week
With two master suites and expansive outdoor living space, families have plenty of room to spread out and relax. You will enjoy the 4 seasons of Tahoe from the covered and heated outdoor lounge overlooking greenbelt in this Mid-century modern style home in the Woods at Gray’s Crossing. High-end appointments create a sense of luxury at this 4 bedroom 3.5 bath home including soaking tubs, white marble kitchen, lower patio with gas fire pit, and a back deck hot tub accessed from the master suite. Amenities at Gray’s and downtown Truckee is just a short drive away.
I hope to see you up this weekend enjoying the crisp fall weather. Don’t hesitate to call if you or any friends would like to view properties. I appreciate your referrals!