1st Time Home Buyers “Coming Home” To Tahoe
Every cloud has a silver lining – we all know that to be true. And one of our favorite current silver linings is the number of local Tahoe first time home buyers finding themselves in a position to finally move back to the lake and purchase a home with the dream of raising their families with the same sense of community they had growing up. There’s nothing quite as satisfying for a REALTOR® as seeing the smiles on these young families. For example, Jaime just closed escrow with a young family able to purchase a home just around the corner from the grandparents to everyone’s joy. We are currently in escrow with a young married couple that put aside a big wedding and honeymoon to instead, save for a down payment on their first home. And, we have been recently contacted by a couple with two small children that had to leave the area 6 years ago due to their feeling that they could never afford a home in the area they love. Being lucky enough to work in technology and live wherever they want, they are “coming home.”
In fact, this seems to be the case throughout the state of California. According to the CALIFORNIA ASSOCIATION OF REALTORS® “Lower home prices and interest rates led to an increase in home affordability in the third quarter of 2011.” The association went on to report that the percentage of California households that could afford to purchase a median-priced home of $292,120 rose to 52 percent in the third quarter, up from 51 percent in the second quarter. The median home price reported by the South Tahoe Association of REALTORS® as of October 11, 2011 was $270,000 (based upon an average of the previous 12 months and below that of the state average.)
Folks fitting into the following criteria may want to look into taking advantage of today’s amazing home values. A minimum annual income of $61,530 generally qualifies one for the purchase of a $292,120 statewide median-priced, existing single-family home. (Less for South Tahoe home buyers.) The monthly payment based upon that estimated $292,120 priced home, including taxes and insurance, would be $1,540, assuming a 20 percent down payment and an effective composite interest rate of 4.63 percent. C.A.R. went on to report that “Regionally, housing affordability rose in most counties in the San Francisco Bay Area but was down in Los Angeles County and Fresno County. At 77 percent, San Bernardino County was the most affordable, while San Mateo County was the least affordable, with only 25 percent of households able to purchase the county’s median-priced home.” Historically, Lake Tahoe’s home values follow the Bay area by about 6 months to a year. Don’t we wish we had a crystal ball about now?
So. Lake Tahoe Median Home Prices Lowest in Over 7 years
image by Theresa Souers
On one hand we would tell you that the South Lake Tahoe real estate market must be improving. After all, Don & I as well as our brokerage, Pinnacle Real Estate Group of Lake Tahoe, just experienced one of the busiest winters we have had in years. According to the South Lake Tahoe Multiple Listing Services, the number of closed transactions for single family residences and condominiums totaled 574 during the past twelve months (April 1 through March 31.) This was a substantial improvement over the 510 reported for the same period in 2010 and crushed the 407 reported in 2009. So yes, we would say that business has definitely seen a welcomed upward trend.
Furthermore, according to the So. Tahoe MLS, as of March 31st, 2011 the number of homes on the ACTIVE list totaled 336 with 72 of those reported in escrow. In our ongoing hope/wish/desire to see a reduced inventory, this is another positive report as compared to the 378 active listings (with 96 in escrow) reported during the same period in 2010 and again, considerably better than the 418 active listings with only 46 in escrow reported in 2009.
On the OTHER hand, the values have been reduced to the lowest median home price level since before January, 2004. As of March 31st, the Median Home Price (which is based on the average of the previous 12 months) was reported at $310,000. During the late summer of 2010, the median home price had worked its way back up to $328,000 representing the first improvement we had seen in years. However, the numbers began to turn back around in October. Historically this is not unusual as home prices in the Lake Tahoe area generally are at their lowest during the later winter months. Nevertheless, the ongoing input of short sales and REO’s within our inventory has continued to have a negative impact (certainly not in the eyes of buyers) on the overall home values. For example, of the 336 ACTIVE listings available this past March 31st, 71 were under $250, 000 while 84 were posted over $500,000. In 2010 there were 29 under $250,000 with 129 over $500,000 and in 2009 there were 18 and 200 respectively.
The most significant decrease is actually seen in the dollar per square foot values. During the time periods we have been discussing above, the average dollar per square foot for this past year was approximately $212 as compared to $225 in 2010 and $268,000 in 2009. In other words, while the buyers are content to spend approximately the same amount of money for a home, they are looking for the biggest bang for the buck. All in all, with today’s record low interest rates, we don’t know what they are waiting for. Wait – they’re not waiting. Business is actually up.
Price Reductions on Some Pretty Great Tahoe Homes – Investment Anyone?
As we enter the mid-summer season (what we in the Tahoe real estate industry call the “shopping phase”) we are noticing that along with Yogi Bear sightings, the number of potential buyers checking out our listings on the internet (and actually making inquiries for further information) are substantially increasing. Over the years, we have noticed a strong trend in buyers using the summer months to explore their options with the thought that “something better might come along.” Eventually, August rolls around and the buyers’ general thought is, “boy, I sure would like to get into a home prior to the snow falling.” Next thing you know, the number of new pending sales go up and everyone is hustling. With just a couple of weeks left in July, some of our sellers have decided to lower their asking prices in order to be at the forefront of the buyers’ top picks in August. These opportunities are so great that we thought we would pass them along to our readers. One never knows where the dominoes might fall so please, feel free to pass the following information along to anyone you feel might be interested. Just in case we lose you, be sure to read this entire piece prior to clicking on any of the links.
Our featured price reduction is 3076 Jacarillo. This home was originally purchased for $687,000. The owners then completed a stunning kitchen remodel, added a workshop out back and fully landscaped the yards. Located in Montgomery Estates and just a few homes down from beautiful forested trails, this beautiful family home is now asking only $519,000 with classy furniture being negotiable. Further information, visual tours, mapping and a photo gallery are all here to be enjoyed. If you are in the neighborhood, stop by our Open House this Saturday, the 24th of July, from 12 – 3.
The next great value to be found is located at 1781 Skyline Drive in Country Club Estates. This property is situated on two combined lots (approximately 30,00 SF of elbow room) with some of the most magnificent views to be found throughout the Tahoe Basin. Street level living features a large living room with vaulted ceilings and skylights, a large dining area and kitchen with hardwood floors and a beautiful stone fireplace. Downstairs are four bedrooms and a bath with a large jetted spa. The owner has decided that now is the time to move on in her life and told us to price it to sell. So we did. All of this now for only $599,900.
Our final pick of the week for great price reductions is 2512 Cattleman’s Trail. Check this out – brand new construction with all the “bells and whistles” is now only $499,000. Where else in Lake Tahoe will you find top of the line construction, three bathrooms all with jetted tubs, hardwood floors, vaulted ceilings, granite counters all in one of the area’s most desirable neighborhoods? Originally built to be the contractor’s own home, no corners were cut when it came to design or quality. Families with small children will especially appreciate the close proximity to the Sierra House School, the fenced yard and steps to the Lake Christopher Meadow with adventures just waiting to be had.
Now, as far as the bear in the above photo – we thought you might get a kick seeing our backyard visitor. Yogi has a preference to wait until Don is done working on the pond prior to jumping in for an afternoon splash. Our biggest chuckle was when he and our cat came face to face the other day. The bear freaked and flew up the closest tree and the cat literally flew across the yard, through the door and up the stairs not to be seen for the next hour. I only wish I had had a video camera handy.
Lenders Could be Held Responsible for Appraisal Selection
Nevada's Oldest Bar
Many of you have been hearing me rant for some time now in regards to the nightmare we are experiencing here in Lake Tahoe in regards to the lending/appraisal dilemma in which we keep finding ourselves in. And, we are not alone. When recently attending the California State Business Meeting in June, I heard the same sad stories across the board. It didn’t matter if it was a metropolitan area or a small country town. The number of folks missing out on the purchase or sale of a home due to a poor appraisal (usually from lack of local knowledge) is running rampant. Hopefully, relief or at least perhaps the pendulum is beginning to swing back from the extreme.
TOn June 30th, Fannie Mae took a step at improving the quality of residential appraisals, by including a requirement that lenders CANNOT use incompetent or inexperienced appraisers. This step was highly applauded by the Appraisal Institute. Fannie also provided further guidance on how comparable sales should be determined and at the same time, are requiring lenders to explain any adjustments made to a property’s appraised value.
Among the guidelines, Fannie will require appraisals to included interior photos. Sadly, a number of borrowers have intentionally vandalized their homes which lowers the value of other homes in foreclosure. They are also letting it be known that lenders are not required to use an AMC and that they are within their rights to speak with an appraiser. Furthermore, the appraiser must respond to a lenders’ request to talk. It should be noted however, that the current HVCC’s rule that loan production staff may not speak with the appraiser still holds true.
These new guidelines with the hope of correcting some of the “unintended consequences” of the Home Valuation Code of Conduct, will begin on all new loans started on or after September 1, 2010. We say hurrah and let’s start to get some of these loans funded and closed. According to Appraisal Institute Government Relations Committee Chair, Richard Maloy, “The buck now stops at the lender.” :Fannie is saying the lender is held responsible for the appraiser’s selection even if they were selected by an AMC.” Personally, I don’t feel that a lender should be held responsible but I will take any steps necessary to clean up this mess. Truly, just as Don and I would never think to represent a client in an area in which we are not fully knowledgeable, I have to believe most ethical and experienced appraisers feel the same way.
South Tahoe Real Estate Market Update, May 13 – 20th, 2010
Yes, it’s May and real estate is supposed to be slow, the weather mild and not much happening. This is certainly no a case of “Ground Hog’s Day.” Although not quite as busy in regards to NEW LISTINGS as last week, never-the-less, it was an active week. According to the South Lake Tahoe Association of Realtors’ MLS, there were 19 NEW (or back on the market) listings this past week which was slightly less than last week’s 21. The lowest priced new listing was $150,000 for 1008 Eagle, a three bedroom home with 1922 square feet. Don’t get fooled by this one. Major work needs to be done. The highest priced new listing was $2,200,000 for 336 Ala Wai #271, a three bedroom, two bath waterfront home with 1558 square feet of living space located in the Tahoe Keys. The overall median new listing price for this week’s newest inventory was $319,900.
The good news was that there were 18 new PENDING sales, up from the previous week’s 14. The lowest asking price among these new pending sales was $129,000 for a small, two bedroom, one bath cabin with 815 square feet of living space. The highest priced new escrow was 2380 Dundee located in the Angora Highlands neighborhood. This home was listed at $790,000. Way to go Pinnacle! The overall median home price among the new pending sales was $314,000 yet with only 17 days on the market.
Now, here’s the really good news!! There were more than double the amount of CLOSED escrows with twelve as compared to five during the previous week. The lowest priced home among the closed sales was $155,000 for a small two bedroom, one bath cabin on Fairway within the Bijou neighborhood. This home was quite the contrast to the $1,060,000 home sold at 1321 Wildwood found within the Heavenly Mountain neighborhood. This home had four bedrooms, three baths and 3, 433 square feet of living space. The overall median home price was $370,000 with approximately 90 days on the market. With the average escrow period being around 45 days, this time on the market is relatively short.
To learn more about the Tahoe real estate market, be sure to visit our website.