As a luxury destination and strong investment market, Lake Tahoe’s appeal remains robust. For 2025, low inventory is expected to drive competition and sustain strong pricing, particularly in high-demand segments like lakefront and luxury properties.
The Lake Tahoe real estate market remains dynamic as we close out the year. Here’s a snapshot of current market conditions across key areas:
These numbers reflect a mix of opportunities and challenges for buyers and sellers. If you’re considering entering the market, now is a great time to discuss your goals with a real estate professional who understands Tahoe’s unique market.
The Lake Tahoe luxury market experienced significant growth in 2024, highlighted by record-breaking sales and strong demand. A landmark transaction set a new benchmark for the Tahoe Basin, reflecting the appeal of the region’s high-end properties. While some areas saw substantial increases in activity, others faced slight declines, all underscored by a persistent inventory shortage driving prices upward. Despite these challenges, property values remain stable, supported by sustained buyer interest.
For more information on Lake Tahoe properties or questions on the real estate market, contact Amie Quirarte with The Q Group.
In the first three quarters of 2024, all micro-regions saw an increase in the number of single-family homes sold year over year. However, while the slight uptick of homes sold is promising, the overall sales volume sits at around half the number of homes sold in the 2020 peak, and well below the average number of homes sold in the past decade. Lower sales volume is partially driven by overall inventory being down from the peak sales volume years.
In the Tahoe Sierra MLS, supply is down 33% from 2019. Median price remains robust, with Truckee reaching an all-time high ($1.3M) and both Incline Village & Crystal Bay, and the Tahoe Sierra MLS matching their 2022 record highs ($2.5M and $1.25M respectively). Lakefront activity has been notable, with sales volume increasing 67% year over year. Median price of lakefront sales stands at $8.2M. The high lakefront sale was 859 Lakeshore in Incline Village, NV for $47.5M.
Now, as we head into the fourth quarter, where the season change typically slows down Lake Tahoe real estate, sellers become more motivated and buyers who have waited may find their opportunity to pounce. As we transition into 2025, the uncertainty surrounding the election will be behind us, and the anticipated decline in interest rates is expected to boost sales activity, driving prices even higher. If you are a buyer and have a property in your sights, make a move now for the best deal.
The Q Take
The year-over-year rise in home sales is positive, but overall volume remains well below peak levels, largely due to reduced inventory. Strong median prices in Truckee, Incline Village, and lakefront areas show market resilience. As we approach the slower fourth quarter, motivated sellers could offer good opportunities. With potential rate cuts and post-election clarity expected in 2025, buyers should act now to secure the best deals before prices rise further.
In the first half of 2024, unit sales volume rebounded from the lows of 2023. All micro-regions saw an uptick in the number of single-family homes sold; however, the growth still leaves sales volume below pre-covid norms.
On the California side of the basin, median price decreased by 7% year-over-year. All other micro-regions saw an increase in median price. Most increases were under 20%, however quite noticeably, the median price of lakefronts jumped 78%. In the month of June, we had 25 single-family lakefront homes actively listed for ale between Incline Village and Rubicon Bay, a 66% inventory increase year-over-year, and the most active lakefronts we have seen in a single month since August 2019.
Market-wide, we see a 27% increase in inventory, offering buyers a greater selection of properties to choose from. After a few years of disruption, we now see the market shift towards an improved equilibrium between supply and demand.
The Q Take
Overall, the data points to a recovering and stabilizing market, with increased inventory offering more opportunities for buyers and a notable demand for premium properties driving significant price increases in specific segments.
Lake Tahoe real estate starts the year off with a bang! Quarter One saw sales volume rebound from Q1 2023 lows. In all micro-regions, the number of single-family homes sold increased year over year, with growth rates ranging from 35% to 131%.
Inventory remains low, while the demand for homeownership in Tahoe remains high, despite high interest rates. Properties that are appropriately and strategically priced are moving quickly, and the buyer pool is anxiously awaiting the influx of listings we typically see each year when the snow begins to melt.
Single-family homes sold increased 42% year over year.
Median price decreased 16% year over year.
Average Days on Market was 100 days, a 43% increase from 2023.
5 of 37 homes (14%) sold for over $2 million. 1 homes (2%) sold above $5 million.
Single-family homes sold increased 131% year over year.
Median price increased 45% year over year, reaching a record high.
Average Days on Market was 140 days, up only one day over 2023.
19 of 30 homes (63%) sold for over $2 million. 4 homes (13%) sold above $5 million.
Single-family homes sold increased 37% year over year.
Median price increased 8% year over year, nearing the 2022 record high.
Average Days on Market was 75 days, a 9% increase from 2023.
32 of 129 homes (25%) sold for over $2 million. 6 homes (5%) sold above $5 million.
For more information on the Lake Tahoe real estate market, contact Amie Quirarte.
In the first three quarters of 2023, all micro-regions with the exception of lakefronts continued to show a deep decline in the number of single-family homes sold. In fact, sales volume this year has hit decade lows. Median price has been far less impacted and, in all micro-regions, sits above pricing in 2021. The supply of available homes for sale remains at about half of pre-covid levels, which at least partially explains the retention of values. With a late start to summer, after our historic winter, lakefront sales began to rebound in Q3 but still hover around the lows we saw in 2009, yet median price reached a record high. In Incline Village & Crystal Bay, 14% of single-family homes sold above $5 million.
The ongoing discrepancy between the dramatic dip in sales volume compared to the minor movement in median price reminds us that post-covid pricing may be the new normal, despite slow sales. A burst in September real estate activity balanced the sluggish start to the season and is signaling a recovery of unit sales. Now, all eyes are on Q4 as we anticipate this fall momentum will bring a strong finish to the season, equalizing Q1.
Single-family homes sold decreased 15% year over year, hitting a 14-year low.
Median price increased 4% year over year.
Average Days on Market was 44 days. In 2021, DOM was 37. In 2019, DOM was 77.
32 of 178 homes (18%) sold for over $2 million. 8 homes (4%) sold above $5 million.
Single-family homes sold decreased 14% year over year, hitting a 12-year low.
Median price decreased 10% year over year.
Average Days on Market was 119 days. In 2021, DOM was 86. In 2019, DOM was 166.
56 of 99 homes (57%) sold for over $2 million. 14 homes (14%) sold above $5 million.
Single-family homes sold decreased 25% year over year, hitting a 14-year low.
Median price decreased 4% year over year.
Average Days on Market was 44 days. In 2021, DOM was 27. In 2019, DOM was 66.
114 of 531 homes (21%) sold for over $2 million. 36 homes (7%) sold above $5 million.
For more information on the Lake Tahoe real estate market, contact Amie Quirarte.
This past week the Federal Reserve raised rates for the 10th time in a little over a year. Let’s discuss what happened as we await yet another Fed rate hike next Wednesday.
As we expected, the Federal Reserve raised the Fed Funds Rate to a range of 5.00% – 5.25%. Remember, this interest rate affects short-term loans like credit cards, autos, and home equity lines of credit.
The big question is whether this will be the last hike. When the Fed statement was released, the markets believed the Fed was signaling a pause by omitting the following line from the previous statement: “The Committee anticipates that some additional policy firming may be appropriate.”
However, shortly after the statement was released, Fed Chair Powell hosted a press conference and right at the top said the Fed Members have not discussed a “pause” in rates. Bottom line? Expect more uncertainty and volatility as it relates to rates.
Sound And Resilient
This is the term Fed Chair Powell used to describe the banking sector. Unfortunately, we are seeing more banks have issues. This week it was First Republic taken over by JP Morgan Chase and as of this writing PacWest was said to be “exploring strategic options.” The fear of banking contagion has elevated uncertainty in the financial markets. It’s not clear if and how many more banks will continue to have issues. Bottom line? The fear of this story has created a “safe haven” to trade into bonds where prices move higher, and rates move lower.
European Central Bank Hikes By Less
The European Central Bank (ECB) hiked their benchmark rate by .25%, the smallest since the start of their hiking cycle. Like our Fed, they too signaled they would be “data-dependent” going forward, leading markets to speculate a pause on future rate hikes.
Bottom line: The Federal Reserve is sending mixed messages on the future direction of rates. Meanwhile, long-term rates, which the Fed doesn’t control, are near their best levels in months and sense all the uncertainty in our economy will prompt the Fed to pause and potentially cut rates later this year. The incoming data and issues in the banking system will determine what happens next.
Looking Ahead
Expect market volatility to continue next week. The Consumer Price Index (inflation) will be reported. If this number comes in higher than expected, rates could rise. The opposite is true. Despite this being a backward-looking number, we will have Fed officials continue to speak and comment on the release and how they feel it impacts future Fed policy and interest rate decisions.
Good morning. The Fed must choose between two unpleasant options today. It’s a reminder of the high cost of weak bank oversight.
The Federal Reserve building. Haiyun Jiang/The New York Times
BY DAVID LEONHARDT
The New York Times
March 22, 2023
Inflation — or turmoil?
The Federal Reserve faces a difficult decision at its meeting that ends this afternoon: Should Fed officials raise interest rates in response to worrisome recent inflation data — and accept the risk of causing further problems for banks? Or should officials pause their rate increases — and accept the risk that inflation will remain high?
This dilemma is another reminder of the broad economic damage that banking crises cause. In today’s newsletter, I’ll first explain the Fed’s tough call and then look at one of the lessons emerging from the current banking turmoil. Above all, that turmoil is a reminder of the high costs of ineffective bank regulation, which has been a recurring problem in the U.S.
The Fed’s dilemma
The trouble for the Fed is that there are excellent reasons for it to continue raising interest rates and excellent reasons for it to take a break. On the one hand, the economic data in recent weeks has suggested that inflation is not falling as rapidly as analysts expected. Average consumer prices are about 6 percent higher than a year ago, and forecasters expect the figure to remain above 3 percent for most of this year. That’s higher than Fed officials and many families find comfortable. For much of the 21st century, inflation has been closer to 2 percent.
An inflation rate that remains near 4 percent for an extended period is problematic for several reasons. It cuts into buying power and gives people reason to expect that inflation may stay high for years. They will then ask their employers for higher wages, potentially causing a spiral in which companies increase their prices to pay for the raises and inflation drifts even higher. Today’s tight job market, with unemployment near its lowest level since the 1960s, adds to these risks. The economy still seems to be running hotter than is sustainable.
This situation explains why Fed officials had originally planned to continue raising their benchmark interest rate at today’s meeting — thereby slowing the economy by increasing the cost of homes, cars and other items that people buy with debt. Some Fed officials favored a quarter-point increase, which would be identical to the increase at the Fed’s meeting last month. Others preferred a half-point increase, in response to the worrisome recent inflation data.
The banking troubles of the past two weeks scrambled these plans. Why? In addition to slowing the economy, higher interest rates depress the value of many financial assets (as these charts explain). Some bank executives did a poor job planning for these asset declines, and their balance sheets suffered. When customers became worried that the banks would no longer have enough money to return their deposits, a classic bank run ensued. It led to the collapse of Silicon Valley Bank and Signature Bank, and others remain in jeopardy.
If Fed officials continue raising their benchmark rate, they risk damaging the balance sheets of more banks and causing new bank runs. That’s why a half-point increase now seems less likely. Some economists (including The Times’s Paul Krugman) have urged the Fed to avoid any additional increases for now. Many analysts expect the Fed will compromise and raise the rate by a quarter point; Jason Furman, a former Obama administration official, leans toward that approach.
The decision is unavoidably fraught. The Fed must choose between potentially exacerbating problems in the financial markets and seeming to go soft on inflation.
Why bailouts happen
All of which underscores the high cost of banking crises. In most industries, a company’s collapse doesn’t cause cascading economic problems. In the financial markets, the collapse of one firm can lead to a panic that feeds on itself. Investors and clients start withdrawing their money. A recession, or even a depression, can follow.
These consequences are the reason that government officials bail out banks more frequently than other businesses. Bailouts, of course, have huge downsides: They typically use taxpayer money (or other banks’ money) to subsidize affluent bank executives who failed at their jobs. “Nobody is as privileged in the entire economy,” Anat Admati, a finance professor at Stanford University’s business school, told me.
During a crisis, bailouts can be unavoidable because of the economic risks from bank collapses. The key question, then, is how to regulate banks rigorously enough to minimize the number of necessary bailouts.
Over the past few decades, the U.S. has failed to do so. After the financial crisis of 2007-9, policymakers tightened the rules through the Dodd-Frank Act. But Congress and the Trump administration loosened oversight for midsize banks in 2018 — and Silicon Valley Bank and Signature Bank were two of the firms that stood to benefit.
As complicated as finance can be, the basic principles behind bank regulation are straightforward. Banks require special scrutiny from the government because they may receive special benefits from taxpayers during a crisis. This scrutiny includes limits on the risks that banks can take and requirements that they keep enough money in reserve to survive most foreseeable crises. “You make sure they have enough to pay,” as Admati put it.
Bank executives and investors often bristle at such rules because they reduce returns. Money held in reserve, after all, cannot be invested elsewhere and earn big profits. It also can’t go poof when hard times arrive.
After last week’s surprisingly strong Jobs Report, Fed Chair Jerome Powell spoke about the economy and direction of rates. Let’s walk through what happened and what to watch in the week ahead.
“The strong Jobs Report shows you why we think this will be a process that takes a significant period of time.” Fed Chair Powell 2/7/23.
BY EPHRAIM SCHWARTZ
Partner, Mortgage Consultant CMPS
O’Dette Mortgage Group
February 14, 2023
The Federal Reserve has a dual mandate, which is to maintain price stability (inflation) and promote maximum employment. On the inflation front, it appears inflation has indeed peaked and is on the decline. The Fed Chair reiterated the “disinflationary process” has begun. This is a positive development for the economy, housing, and long-term rates.
On the labor market front of the Fed’s mandate, the Fed in its desire to slow demand and thus inflation, wants to see some unemployment. The good news/bad news? Last week, the Bureau of Labor Statistics (BLS) reported the unemployment rate at 3.4%, the lowest in 53 years…that is good news. The bad news is it means the Fed will look to raise rates by .25% in March and another .25% in May, thereby lifting the Fed Funds Rate above 5.00%.
This renewed outlook for a higher Fed Funds Rate has elevated uncertainty and volatility in long-term rates, which move up and down based on economic conditions and inflation, both of which are easing and a reason why long-term rates are lower than short-term rates.
“Likely to see some softening in labor market conditions” – Powell
This is a reasonable assumption considering the number of planned layoffs announced this year, while we sit at multi-decade low unemployment, it seems like up is the only direction for unemployment.
Soft Landing Back in Play
Due to the current strength of the labor market, there is a growing chance the Fed can raise rates and lower inflation towards its 2.00% target without triggering a deep recession.
History has shown that recessions do not take place with unemployment at 4% or below without some sort of surprise shock to the economy.
Let’s hope the Fed is not too successful in “creating” unemployment because if it quickly rises, the idea of a soft economic landing could go away quickly too.
3.70%
As we mentioned, long-term rates have responded negatively to last week’s strong jobs report, because good news is bad news for bonds and rates. The 10-yr Note touched 3.33% last Thursday and touched 3.70% just a few days later. However, rates remain beneath where the 10-yr yield opened 2023 at 3.85%.
“We are going to react to the data” – Powell
Here the Fed Chair reminds the markets that last Friday’s Jobs report was strong, but backward looking and lagging while other economic indicators show signs of s slowdown. The Fed does not want to over hike rates into a slowing economy and be the reason for the recession. So, while the market is currently pricing in two more rate hikes and a rate cut in December, this story could quickly change once again.
Bottom line:Rates and inflation have peaked. Housing activity has jumped in the past weeks as a result. The incoming data will determine how much better rates can get in the next few weeks leading to the next Fed Meeting.
Looking Ahead
Next week’s CPI is a very important number. If it meets or comes in lower than expectations, we could see home loan rates revisit the levels seen last week right before the Jobs Report last Friday. We will also see the latest readings on housing and the strength of the consumer, by way of Retail Sales. As fast as the story changed when the strong jobs data hit, things can change quickly upon these reports.
The all important CPI (consumer price index) inflation came out this morning and mixed news; the year over year January CPI report fell to 6.4%, which was a hair lower than last month’s 6.5% – which is good, but higher than market expectations of 6.2% – which could have been better.
Reminder inflation is the arch enemy of bond prices, and therefore mortgage rates, and the reason we’ve seen mortgage rates improve since what appears to have been the peak in November is because inflation has been coming down. CPI peaked last summer at 9.1%, and has since been steadily decreasing. It was the November & December CPI reports coming in lower than market expectations that were the impetus for mortgage rates improving over the past few months, and then last months data at 6.5% came in right at expectations, so today’s report was much anticipated and bucked the prior three month trend and came in higher than expectations.
Looking at the numbers from a month over month perspective, which is arguably the most relevant in measuring present trend, the month over month figure was up 0.5%, which was up from 0.1% last month. Shelter (housing) is the biggest factor here increasing 0.7%, making up the majority of the month over month numbers. National housing costs are not coming down.
This month’s jobs & CPI reports are now behind us, the labor marker remains very strong, and inflation is moving lower, albeit slowly. Inflation creeping lower is good, but as expected we should not expect a straight-line drop in prices, and there will be slower and outright pauses in declines going forward.
As a result of this morning’s CPI report, bond yields/mortgage rates have ticked a hair higher. See chart below of the 10 yr T, which jumbo rates are based on, for a graphical context. As you can see, rates peaked first week in November, have since come down a bit, and now giving up a bit of ground.
Regarding conversations with clients; 30 yr fixes in the 6%’s with option of getting into the 5% with points, is a healthy “normal” place for them to be, and still well below historical long term averages. We’re still seeing jumbo rates notably lower than conforming (approx ~.625% .75%). Lastly, even after rates have improved, considering grossing up a sale price & requesting a seller credit can still be a good strategy to get buyers into not just a more palatable rate, but one that is really quite good and a loan they may hold for as long as they’re in the property.