Real estate sales in Tahoe/Truckee fell in April to roughly half of what they were this time last year. Some markets, like Incline Village, saw even steeper declines. What’s truly remarkable in the coronavirus-time real estate market, however, is not that sales volume fell, but that there were any home sales at all.
The roller coaster hit the big downhill in mid-March. With 10 feet of fresh powder and thousands of people in town for spring break, all the ski resorts shut down. In a matter of days, Gov. Gavin Newsom shut down the entire state.
Hotels were shuttered, Airbnb rentals were banned from accepting guests, and the local chamber of commerce took the unprecedented step of telling visitors to stay home: Please do not come to Tahoe; the lake will be here for you when this is over.
Nevada said real estate sales were an exception, an “essential business” like banks, grocery stores, and gas stations. Shortly thereafter, California came to the same conclusion.
But that left a lot of realtors scratching our heads. If visitors were supposed to stay home, and there was nowhere for them to legally stay, how could a real estate market that relies almost entirely on vacation home sales be expected to keep pace?
Real estate sales somehow continued, and the Tahoe/Truckee market closed out April with a little over $41 million in sales, 40% of what it had been a year before. The median sales price for a single family home fell to $657,500, a 13% drop from last year.
The luxury market (homes selling for more than $1 million) dropped 40% in sales volume this April (so the luxury market overall is 60% of what it was this time last year), yet within that median sales price of high-end homes rose 3% to almost $1.5 mil- lion. This suggests that while overall sales might be down, luxury homes are holding their value.
A similar trend played out in Tahoe Donner, a resort community of some 6,000 homes in the hills above Truckee. April sales were just a third of what they had been last year, but the median Tahoe Donner sales price rose to $748,000, slightly higher than it had been a year earlier.
Low inventory contributed to the declining late-spring sales. Amid fears of how the virus was spreading, some sellers pulled their homes off the market; others decided to wait to list their homes for sale.
New rules aim to ease seller fears of having a parade of people coming through their homes. And April saw a corresponding uptick in supply, with 59 homes coming on the market in Tahoe/Truckee and 12 in Incline Village. A dozen of these new listings went into contract within two weeks, some selling within just days of being listed, showing that pent-up demand is driving some of the recent activity.
California and Nevada now both require prospective buyers and their agents to sign a declaration affirming that they are healthy and confirming they understand the risks associated with the coronavirus.
Home showings are now equipped with rubber gloves, face masks, and sanitizing wipes or sprays. New “coming soon” categories allow agents to market your home before you’re officially ready to show it. Amid coronavirus concerns over having strangers tour your home, this will also help fuel sales in the months to come.
The future of the Tahoe market might well rest on not just vacation sales, but on the plans and dreams of those who view Lake Tahoe as more of a full-time escape from city life. These are buyers who have realized amid the shutdowns that they can readily work from, well, anywhere, and no longer need to live close to their employment base.
That trend has also raised fears that Tahoe/Truckee is becoming home to vast numbers of second homeowners who have decided to come to their second homes during the stay-at-home order. But data from the Tahoe-Truckee Sanitation Association suggests otherwise. Wastewater and sewage flow is far lower this year than it was in April of 2019.
With pent-up demand, we can expect that when the shutdown orders are lifted this summer, we could see a significant uptick in the Tahoe/ Truckee real estate market.