Two mountain communities, two different stories.
Both Truckee and Tahoe City offer all the best of mountain living–easy access to skiing, hiking, water sports, dining, and shopping. When you take a look at the history of homes prices and inventory, the trends tell two very different stories.
Let’s take a look at Truckee first. In the past three years, Truckee home prices have dropped from a median price of $750,000 to a median price around $380,000. The biggest reason for this drop is the fallout from the overheated housing market of the mid-2000s. When prices spike to artificial highs, they have a tendency to drop. We never know where “the bottom” of the market WAS until the market starts to climb at a steady pace again. Given the current economic climate and the millions of foreclosures hiding in the shadows, we probably haven’t hit the bottom yet.
The good news is that prices are unlikely to significantly drop from here. Will they continue to decline? Probably. Looking at the price trend for the past three years shows a downward trend, even though there has been a recent uptick in prices across the board. When you combine the recent price uptick with the recent decrease in inventory, those signs point to positive changes in the Truckee housing market.
In contrast to the Truckee market is Tahoe City. The lakefront community has experienced more volatility than the Truckee housing market, which is not a surprise. Over the past three years, the median price in Tahoe City has dropped from about $1,000,000, to today’s median price around $700,000. A 30% decrease over three years is significantly less than the 50% drop Truckee homes experienced.
The home inventory for sale in Tahoe City demonstrates an interesting trend. Not only are prices more volatile in Tahoe City, but the inventory levels fluctuate substantially. Three years ago, there were roughly 100 Tahoe City homes on the market. Today, there are roughly 85 Tahoe City homes for sale. By itself, those numbers aren’t very interesting. The interesting part is the seasonal trend in the inventory. The three peaks in inventory for the past three years were 128 homes for sale (’09), 102 homes for sale (’10) and 127 homes for sale (’11). The low points in inventory were 83 homes, 52 homes, and 54 homes. Those are some wide swings in inventory and it’s easy to see a seasonal pattern when you look at the orange line on the graph.
So what does this mean for you? There are several conclusions you can make from this data. First, prices and inventory levels have an inverse relationship in both Truckee and Tahoe City. This is economics 101 in action. Secondly, there are some great buying opportunities in both Truckee and Tahoe City right now. The numbers speak for themselves. And lastly, assuming the seasonal price and inventory trends repeat themselves this year, you should move quickly if you want to take advantage of the low prices and high inventory. Prices are increasing and inventory is decreasing, which means the best deals of the year are the ones you can find right now.
Filed under: Tahoe Real Estate • Truckee Real Estate
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