The Tahoe/Truckee real estate market showed strong gains in the first quarter of this year, leading some to question whether the momentum can continue amid recent stock market volatility.
With the exception of Incline Village, sales volume and prices are up significantly over this time last year. And some markets, like Tahoe Donner, are seeing increased median sales prices. Fueled by a handful of sales in the $2 million-plus range, Tahoe Donner’s median sales price rose 14% in the first quarter to an unprecedented $1.4 million.
At the other end of the market, home prices in Incline Village dropped 26% to a median sales price of $1.8 million. That’s a big number for some communities, but not for Incline, which attracts affluent buyers seeking to take advantage of Nevada’s favorable tax climate (no state income tax or capital gains tax, and no state inheritance tax).
The start of 2025 marks the first time we’ve seen median sales prices in Incline fall below the Covid-era $2 million mark. Despite healthy inventory, with more than 50 homes currently for sale in Incline, sales volume there was down almost 60% from this time last year.
Incline Village is shifting toward more of a buyers’ market, with roughly 4 and half months of inventory, and some attractive properties for sale in the $2 million to $4 million range. (Six months of inventory is considered to be a balanced market, favoring neither buyers nor sellers. Below that tends to favor sellers, and more than 6 months is a buyer’s market.)
Listing activity seems to be picking up this month in Truckee and around Lake Tahoe. On the California side, including Truckee and the ski areas, there are almost 200 homes currently for sale, a third of them having come on the market since the beginning of April.
“With the increase in listings that we feel coming, there could be a dynamic shift in the buyers’ favor from where we have been the past 5 years,” said Kristina Mattson, the broker for Chase International’s Tahoe City, Truckee, and Incline Village offices.
One question people are asking is whether the Trump tariff wars, which sent the financial markets into an early-April nosedive, will influence buyer behavior as we move into the busy spring/summer selling season. In a market like ours, where the majority of homes are a discretionary purchase, it could go either way.
If your portfolio is in the toilet, it might not feel like it’s the best time to buy a vacation property. But when the stock market feels too volatile, investors might also look to real property as a solid place to park their money.
So far, we are not seeing Tahoe/Truckee buyers back out of deals because of the economic uncertainty we saw in early April. By late April, 45 homes with a median asking price of $1.2 million were in escrow on the California side of the lake and Truckee, more than half of them with accepted offers since April 1, along with a dozen more in Incline and on the East Shore.
Are short-term rental restrictions cooling the condo market?
Condo sales in many of our micro-markets have not shown the same gains as single-family homes. Tahoe Donner and several communities around the lake saw just a handful of condo sales with median price declines over last year.
The ski areas were the exception, with the pace of sales at resort destinations like Northstar and Palisades up significantly over this time last year. And in Incline, despite a meager 1% drop in volume, the median condo sales price rose 18% over the first quarter of 2024. The trend might indicate that efforts to restrict short-term rentals (STRs) are beginning to have an impact on the condo market.
In Truckee, where there is a mandatory 1-year wait after a property changes hands before one can even apply for a STR permit, the aim of the new restrictions was to disincentivize buyers who purchased properties to cash-flow them as STRs. The goal was to make more affordable housing available as long-term rentals for local workers. (Exceptions were made for ski area condos with onsite management.)
Incline, which is governed by Washoe County rules on STRs, is one of the more liberal jurisdictions when it comes to cash-flowing your property short-term. It could be just a blip, but if the pace of sales remains strong in those areas that allow STRs — Incline and the ski areas — while continuing to decline elsewhere, it might suggest the restrictions on STRs are influencing buyer behavior.
