December 2009 Newsletter
Let the “Swoosh” Begin
Honestly, there is nothing quite as wonderful as a snowy Christmas season. The decorations are popping up all around South Lake Tahoe, windows are being painted and yes, the Christmas channel can be heard on most radios. Our business partner, Michelle, even commented that our office looked like “Christmas on steroids.” This is quite a change from last year at the same time and why – SNOW! It’s here and more to come. This month’s newsletter features articles on the local and national real estate markets, changes in your Tahoe utility bills, and upcoming events. Enjoy and be sure to click on the little video found at the end of the upcoming events.
South Lake Tahoe Market Update
FINALLY! For the first time in 2009, the median home price for homes reported sold within the South Lake Tahoe multiple listing services remained level for two months. For too long now we have watched the median home prices sink lower and lower. MORE GOOD INDICATORS! The current inventory of active listings is considerably lower. For the first time in 2009, we have less than 400 homes on the active market. As of November 30th, there were 390 active listings with 89 of those in escrow. Compare that with the 561 active listings in July. Even then, there were only 88 homes in escrow. We would call that significant improvement!
Furthermore, the number of sales are also on the rise (just as in the reported national levels.) During the month of November, there were 40 closed escrows with an median of 127 days on the market while the same month in 2008 reported 31 homes sold with 129 days on the market. Even when looking at the year to date (Jan. 1 – Nov. 30,) there have been 386 reported sales as compared to 330 during the same period in 2008.
Pass the word – those that have been waiting for the bottom of the market might want to be paying closer attention these days. Check out the comparison graph below.
Local Electric Bills are on the Rise
Yikes – Baby, it’s gonna get cold inside! Sierra Pacific Power customers throughout Northern California, including South Lake Tahoe, will soon see higher bills with new rates starting December 1, 2009. A 7.75% increase was approved by the California Public Utilities Commission which calculates to approximately a $5.5 million growth. A recent press release from the Nevada Energy predicted that “a typical residential customer using 650 kilowatt-hours of electricity could see an increase of about $5.49, a 7.21 percent increase per month, from $76.16 to $81.65. Looks like we will be seeing more of those Christmas sweaters than in years past.
Sluggish Modification Programs Being Threatened
It looks as though steps are being taken to “shame” the mortgage companies “into doing a better job.” According to an article published within the SF Chronicle, the “Treasury will soon be publishing a list of mortgage companies that are dragging their feet when it comes to helping borrowers complete the necessary paperwork required for the current administration’s loan modification program.
The article went on to report that the Treasury Department officials state that they will “step up pressure on the 71 companies participating in the government’s $75 billion effort to stem the foreclosure crisis.” Starting this week, tthe eight largest companies will be visted by three person “SWAT” teams to monitor and request twice-daily reports on their progress thus far.
National Real Estate News & Forecasts
They’re baby steps for now, but slight breezes of change are in the air. The National Association of Realtors is anticipating a 4.8% jump in 2009 sales of previously owned homes which is higher than the 2 % annual rise they had forecast only a month ago. Also, NAR reported that its index gauging pending sales of resale homes gained for the ninth month in a row in October and recorded a 31.8 percent gain compared to the same month last year.
This is the first time such a series was recorded since the 2001 creation of the Pending Home Sales Index. The rise as compared to a year ago, is the biggest annual increase ever recorded for the index, and at the highest level since March 2006. NAR’s chief economist, reported “home sales are experiencing a pendulum swing.” and reminded folks to “keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.
It is also pointed out that it is important for folks to remember that due to the time it takes for buyers to make offers and close escrow and the recent news that the first time home buyer credit had been extended, it is highly likely that we will see a temporary decline in closed existing-home sales between December and early spring. At that point, we should see another surge.
The recovery process will remain slow as long as unemployment continues to run high numbers. Never-the-less, decreasing inventories will eventually bring about a balance between the “Buyer” and “Seller” markets. Again, baby steps – but we’ll take them.
It’s definitely beginning to look a lot like Christmas, BUT – before you take a look ahead at what’s coming our way in December, be sure to click on the link below to have a peek back at November.