As promised, we are excited to share our Q2 Micro Market Reports with you. As you scroll down, you’ll see links to our Micro Market Reports for the various markets we cover. Although these statistics represent the past, they do provide an important backdrop to understanding our current and future market.
The second quarter of 2022 was very similar to the first quarter. We continued to experience high-velocity sales with overwhelming demand dramatically outweighing historically low inventory. This imbalance fueled the continuation of price increases throughout most of the second quarter. Our inventory for the first two quarters remained steady, around one-to-two months’ supply, which allowed sellers to drive the market and benefit from multiple offers and bidding wars, ultimately driving both the median and average price up by more than 15% year-over-year.
So, the big questions are: Where we are now? and Where is our market headed?
Where are we now? While nobody has a crystal ball, there are signs that the market might be normalizing to a more balanced state. There are even some indications that it might be trending back in the buyers’ favor. This July, we are seeing in inventory of roughly 30% over this same time last year. Demand is matching this inventory in a more traditionally balanced market. Specifically, at most price points, we are not experiencing the same frenzied market with daily multiple offers and bidding wars. The biggest change we are seeing is that buyers are more diligent and thoughtful in their purchasing behavior, taking the time to thoroughly evaluate properties to make sure that value is reasonable. These thoughtful buyers continue to be attracted to homes that are new, remodeled and well-maintained. Of course, newer and remodeled homes are always visually more attractive, but I believe this also reflects buyers’ concerns about the labor shortages and increases in the cost of goods that are internet in a remodel project.
Where are we headed? Our market is showing signs of returning to a seasonal pattern. Historically, the months of June, July and August have been our area's busiest months, not only with the number of transactions but with the number of properties available to consumers. For sellers, it is important to note that we have roughly six weeks left in our peak summer selling season. For buyers, the bulk of what will be for sale this summer is now on the market. As we return to a traditional market we anticipate the demand will wane in the 4th quarter; however, we also believe we will become supply-constrained by the end of summer.
Please call us to discuss how this changing market is affecting different price points and communities in the Truckee Tahoe region and, if interested, check out the reports for the various markets we cover. We hope you find value in all the data provided.
We look forward to hearing from you.