Stable Transaction Volume and Rising Inventory Highlight Q2
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As we move past the midway point for 2025 and into the heart of Summer, the real estate market in Lake Tahoe has shown signs of stability, even if that comes with muted transaction volume. Through the first 6 months of the year, we have seen 111 units transfer on the North and West Shore (condo/townhome and single-family residential only), which represents a small decline YoY from 2024 when we saw 116 units transfer through the first half of the year. While any decrease in transaction volume is met with a cautious eye, the fact that we have seen consecutive years with relatively stable volume leads us to believe the market is finding balance. Dating back to 2005 when MLS statistics became available online, we've seen an average of 139 units transfer during the first 6 months of the calendar year, so while the recent consistency is encouraging we continue to lag our historical averages as buyers grapple with high prices and macroeconomic conditions.
One of the most defining data points of Q2 was the lack of buyer activity above $5,000,000, which was particularly surprising following robust activity to start the year, when both Median and Average Sales Price set records for Q1 historically. Looking specifically at Q2, Average Sales Price came in at $1,284,000 (down significantly from the Q2 record of $2,219,000 in 2022) and Median Sales Price was $1,097,5000 which represented a small increase YoY but still lagged the 2022 record of $1,200,000. We believe the drop in prices is due to the sizable increase in available homes on the market and the increasing cost of ownership. Inventory is quickly returning to pre-pandemic levels, and a large percentage of those homes are priced at or under $1,000,000. Our opinion is that this is due to a combination of factors, including decreased rental income in the Airbnb market for these homes, increased costs for insurance and utilities, mandatory defensible space improvements, and similar regulations that can be perceived as burdensome for owners.
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When looking solely at the lakefront market, Q2 gave us a whiplash following a strong Q1, as there were ZERO Lakefront transactions registered in the Tahoe Sierra MLS for the first time since 2005. To be clear, this is the first 3-month Quarter in the history of our MLS where there was not a single-family lakefront home sold. It should be noted that there was one sale outside of our MLS on the water in Carnelian Bay for $3,950,000 but this home had been taken down the studs and sold as a project, NOT a finished residence with a Certificate of Occupancy. Last year we saw 3 Lakefront properties transfer in Q2 2024, with an average price of $10,466,000, and historically we have seen approximately 4 Lakefront properties transfer on average during Q2. This lack of activity was particularly surprising as we started the year with 3 Lakefront sales in Q1 2025, including the first sale above $20,000,000 on the California side of the Lake in 3+ years. On the Nevada side of the Lake, there was one Lakefront transaction in Crystal Bay, where 410 Gonowabie Rd sold for $11,800,000 on April 22nd.
While Lakefront transaction volume disappointed in Q2, inventory continues to rise rapidly and there are now 29 Lakefront homes actively listed for sale on the North and West Shores, with 23 of those listings in California and 6 in Nevada. Pricing for these properties ranges from $3,995,000 for a small cabin in Carnelian Bay to $49,000,000 for an acreage estate on Lakeshore Blvd in Incline Village. At this time, there are 2 Lakefront properties pending sale in Nevada and 2 in California, one of which is represented exclusively by The Moore Team. Should that property close escrow as scheduled, it will be the 4th Lakefront listing sold by The Moore Team in the past 16 months, and we will have represented the Seller on 20% of the California Lakefront sales since the start of 2024.
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Looking Ahead to Q3 and Summer 2025
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Summer is in full bloom around Lake Tahoe, and much like the wildflowers in the meadows, every sunrise seems to bring a new listing to the real estate market. Inventory continues to rise, and while transaction volume for Q2 trended in line with the previous year, pending sales data at this time points to a slow start to Q3. Over the past 20+ years, we've seen an average of 128 transactions during the July-September period, and we're currently on track to see around 30 through the end of this month. While we at The Moore Team do not have a crystal ball, we believe simple economics will play out with increased supply and reduced demand leading to softening in prices, much like we saw with the drop in Average Sales Price in Q2. It remains possible that buyers en masse will become enthusiastic in the near term, but it is not yet clear what it will take for that to happen. Sellers who have the luxury of delisting their properties if they don't sell may choose to do so and hold off for a more active market, but those who need to sell will be forced to act soon.
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