A lot of people are watching what appears to be a shifting real estate market right now and asking if this is the right time to buy or sell.

The short answer is: It depends on where you are and what you’re looking to spend or fetch.

The overall Tahoe/Truckee market was balanced as of late August, with about six months worth of inventory, a condition that favors neither buyers nor sellers. But the luxury market (homes over $1 million) is strongly a buyer’s market as we move into fall, with almost 10 months worth of supply.

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In a segmented real estate market like ours (one where it’s almost impossible to find anything under $1 million in some neighborhoods), the overall numbers don’t really tell the full story. Consider Tahoe Donner, for example, a community of some 6,000 homes (mostly vacation properties) in the hills above Truckee. Sales of single-family homes under $1 million were down there in 2018. But at the same time, the luxury market picked up steam, with a 32% spike in sales over $1 million.

If you are in the market for a luxury home in Tahoe Donner, this fall is a great time to buy. With more than 7 months worth of inventory, it’s definitely a buyer’s market. Under $1 million, we are seeing conditions that favor sellers, with just slightly more than three months worth of inventory.

The mid-year market numbers seemed to suggest that the overall Tahoe market was in for a correction. By June 30, sales volume was down in many areas, with median prices sustaining an upward momentum that began in 2013, when overall home values began rebounding from recession-era pricing. But we’ve seen similar numbers at the lake in past years without a drop in value. The mid-year numbers in 2014, for example, looked a lot like today. Sales were down 18% from the year before, but the median price of a home was up 3%.

And what happened? Prices did not level off. On the contrary, the median sales price shot up 13% the following year, and 2016 was a banner year, with home values and the pace of sales up over previous years.

Tahoe is largely a vacation home destination, a place where buyers don’t need to buy and sellers, often, don’t need to sell. At the high end of the luxury market, unique homes continue to change hands here, often for multi-million-dollar price tags. Most newsworthy of which this year was Mark Zuckerberg’s purchase of the Brushwood Estate, a sprawling Westshore lakefront that closed for $37 million in January and came on the heels of the Facebook founder’s purchase of the adjacent lakefront estate the month before for $22 million.

No real estate investment is entirely recession proof. But some can weather market downturns better than others. And that’s been true for some luxury markets across the country, especially in places like Tahoe, where environmental controls constrict supply. Tahoe’s luxury market saw record high median sales prices while the overall housing market was in the trough.

In 2011/12, for example, the median price of a luxury home in Tahoe/Truckee hit a high of $1.8 million. At Lake Tahoe’s North and West shores, the median price of luxury homes similarly climbed to $2.9 million that year.

Call it the scarcity driver. It’s a big lake — 72 miles in circumference. But there are only so many feet of lakefront to go around, and scarcity in any market keeps prices high.

The other driver on the Nevada side of the lake for many buyers is taxes. As a broker in both California and Nevada, I’ve seen this firsthand. When Gov. Gavin Newsom even mentions new taxes, my phone starts ringing. And buyers who have sufficient assets to worry about protecting them, typically can afford luxury homes.

Incline Village, for example, saw the median price of luxury homes increase to over $2 million in 2009, while home prices in the rest of the state were sinking into the mud. The median sales price of a luxury home in Incline over the past 12 months is $1.6 million. With 10 months of supply, this fall favors luxury buyers there.

So where are we headed?

Strategic pricing will become more important in many of our micromarkets. In an appreciating market, sellers can aim high, knowing that the rest of the market will eventually catch up with them. That strategy won’t work in a market that’s flat or headed for a correction. It often leaves a seller chasing the right price at the risk of the home becoming stale on the market and sometimes fetching less than it would have if priced correctly from the start.

Every property is unique, of course, and much depends on your goals as a buyer or seller.

~ Jackie Ginley is a licensed real estate broker with Chase International in California and Nevada, and a Luxury Home Marketing Specialist. Visit tahoeishome.com for current listings or email jackie.ginley775@gmail.com for a personal consultation.