As the end of a record year for real estate transactions in the Tahoe-Truckee region draws near, the market is showing no signs of fatigue. November tallied over 170 residential transactions totaling over $135 million, improvements of nearly 12% and 30% respectively over the same period in 2016.
Year-to-date nearly 1600 residential properties have changed hands totaling just under $1.4 billion. Obvious factors driving this remarkable run include strong economic growth within the Northern California feeder market and perpetual demand for the healthy lifestyle that comes along with a mountain home ownership.
Less obvious is the concept that the market is clearing at or below replacement cost, even in many luxury, resort communities. This is hardly a reflection of a regressing market but rather the circumstance where construction costs that have accelerated at a rate significantly greater than market appreciation. Nevertheless, demand for custom construction at the highest climbs of the market remains significant, particularly in Martis Camp and Gray’s Crossing where several hundred new homes have been added in each of the last few years.
Demand has not been entirely Teflon in these conditions as the performance of vacant land has slipped markedly over the past year.
The current market finds itself with a severe inventory shortage heading into winter. Just 544 active listings equate to just over 3 months’ supply; nearly 50% below equilibrium.
December often provides an easy taper into the quiet first few months of Q1 however current velocity foretells a robust conclusion to the year with a record $1.5 billion in total transactions within sight.
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