What makes the Lake Tahoe region unique in the luxury market is its duality: California's laid-back allure on one side and Nevada's tax-friendly, high-stakes ambiance on the other. Whether one desires a rustic retreat in California's Truckee or a grandiose lakefront mansion in Nevada's Incline Village, the region caters to a broad spectrum of luxury tastes and lifestyles.
The Lake Tahoe region embodies life at its most sublime—a captivating blend of natural magnificence and residential luxury. The area stands as one of the few genuine escapes for those seeking calm amid the pinnacle of refined living. For those who demand nothing less than the extraordinary, this alpine paradise offers an enriching and awe-inspiring lifestyle, making it an undeniable jewel for the sophisticated luxury homebuyer.
Current South Lake Tahoe market snapshot
Of course, even as a breathtaking sanctuary of pristine natural beauty, Lake Tahoe is not immune from the outside realities of luxury real estate. For those looking to buy or sell a home or condo in one of the region's opulent enclaves, South Lake Tahoe is a good barometer for gauging the market. If interest rates, supply and demand, and current and future home prices are impacting home transactions on the lake's southern end, there's a good chance it's happening everywhere else, too.
Before jumping into our 2024 forecast, below is a look at South Lake Tahoe's single-family luxury residential market performance for September 2023:
The South Lake Tahoe median home sale price finished the month at $805,000, which is up 2.3% year over year. Although overall home sales in the market were down by 42.2% from 64 home sales in September 2022 to 37 for September of this, Q3 2023 home sales were off by a more reasonable 10.7%
Additional data also points to a more deliberate buyer entering the marketplace, with only 28% of listings selling within 30 days and properties spending an average of 54 days on the market.
The rise in prices reflected a market that continues to attract buyers willing to pay a premium for Tahoe homes, even as overall sales flattened out throughout 2023.
Tahoe market trends in 2024
So, what will market conditions be heading into 2024 and beyond? Buyers and sellers can expect a status quo marketplace as we enter the typically docile winter sales season. It's easy to forget how slow the Tahoe market is at year's end if using the pandemic era years of 2020 and 2021 as a barometer.
Now, two years removed from that point, the Tahoe market appears to be settling into a more predictable seasonal pattern capable of producing outlier months based on shifts in the market.
Three areas where these shifts could originate in 2024 include pricing, mortgage rates, and inventory.
Home prices in 2024
While home sales did slow in the spring and summer months, price gains did not. Now that buyers are over the primary shock of rising mortgage rates, they are returning to the market and looking to deal—with far more patience and purpose.
After all, Lake Tahoe and its many beautiful communities, including South Lake Tahoe, remain a highly valued relocation and recreational destination for those seeking a primary or secondary residence.
Expectations for 2024 are for a seasonal cooling and drop in prices, partially impacted by high interest rates to start the year, before prices again rise, thanks to ongoing demand. However, don't expect to see market-wide double-digit gains. Modest gains of up to 5% year over year should be the norm. Submarkets with an extremely tight inventory will be able to command more.
Mortgage rates in 2024
One of the central reasons is that older, seasoned buyers can recall when an 8% rate was the norm and that a sub-3 % loan is the outlier in the current scenario. Going from an all-time historic low to a 20-year high keeps some buyers on the sideline. Home sales across the country have slowed considerably due to the elevated rates. In Tahoe, the impact of high mortgages isn't going unnoticed either.
A segment of current owners hold on to their sub-3% loans more steadfastly than they otherwise would. That includes those who didn't buy a home during the pandemic-driven market but refinanced a current home instead.
The implications for Lake Tahoe's market include sluggish buying for the remainder of the year and into early 2024. Mortgage rates are not expected to fall by much in 2024, staying above the 7% threshold for much of the year.
Inventory in 2024
South Lake Tahoe and the surrounding communities have sustained a three-month supply of current listings for much of the year. Compare that to the overall California and Nevada marketplace, which have both struggled to rise above the two-month barrier for most of the year.
Ultimately, this puts the South Lake Tahoe marketplace in a considerably more stable position, with buyers and sellers able to find opportunities and deal-worthy transactions. There's no reason to doubt the market is maintaining its competitiveness for much of 2024.
For buyers actively seeking a Lake Tahoe luxury home, preparation is pivotal to a successful purchase. A pre-approval letter from a lender, proof of funding, and a clear idea of the home you want and where in Lake Tahoe you want will simplify your home search. You'll enter the marketplace with the ability to make quick, informed decisions and act immediately on opportunities as they become available.
Buyers who are not in a rush have an even greater luxury to shop the Tahoe housing landscape and make a play for singular properties that fit every one of their needs. In both cases, home seekers should shop just as vigorously for their loan as they would for their home. Just because mortgages are hovering at 8% doesn't mean that's what you should sign up for. Solid financials and a positive home-owning history can help secure a competitive lending package.
For sellers, the current climate is all about timing. Even though prices are stable, there's an ebb and flow to the market that can make selling in certain months far more lucrative than others. Seasonal opportunities exist here, especially if yours is a highly desirable property in a highly desirable neighborhood. That, however, offers no guarantees of a successful sale.
High-end South Lake Tahoe buyers expect move-in ready homes they can easily make their own with very little fuss. Savvy buyers also want their counterparts to understand the current marketplace. Given the market's slow, transitional nature, many homebuyers are already taking a systematic approach to their home purchase. They won't mind moving on to the next property and owner with a more serious inclination for making a deal work.
Ready to learn more about the South Lake Tahoe real estate market?
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