I attended the National Association of Realtors annual convention and do so most every year to participate and take note of the trends effecting the economy and the housing market so that we can be on the cutting edge of our industry. I have had the pleasure serving the NAR on its Resort and Second Home Committee for the past several years and will be serving as the Vice Chair and Chair (god willing) during the next two years.

Here's the latest from the economists and prognosticators:

Transition and the Economy-

The news to report is mixed, much was relayed on the transition of government, everyone agreed we needed change and we got change.

There was a great deal of discussion on the economy naturally and on the GSEs (Gov't sponsored enterprises) now transitioning to GOEs (Gov't owned Enterprise) as the Bail out, stimulus bill are being rolled out.

Help is on the way in the credit sector, whether you like it or not (the plan), there will be relief from debt, consolidations, modifications, buy downs and general affordable credit made available to the those who need it the most, our home owners that are under water!

Regulations will be put in place to monitor the bail out process and the financial institutions that will be receiving the funds to distribute to"qualified" home owners.

Defaults, delinquent loans and Foreclosures are still on the increase as a result of the sub prime and variable interest rates loan that have become unaffordable for many, often times equaling more than the homes are worth said Chairman Lockhart of the FHFA Agency.

The interesting dynamic at play however, is that in many areas in the country, the buyers including first home buyers and investors, are coming into the market place in substantial numbers, as a result of the attractive declining prices that foreclosures, short sales and distressed sale have brought to the real estate market.

 

We have a future-Slightly hazy...

Dr Yun, NARs Chief Economist, forecasts that the "recessionary like" economy will see some relief by the 3rd and 4th qtrs of 2009 fueled by the influx of funds from the monetary markets not only to the housing sector but also the manufacturing, energy and green job development.

On the longer term forecast he was optimistic that the housing market would see increased demand based on the growing population and immigrations and the shortage of new development, supply and demand. Other factors he noted included the international and overall demand for our "recent attractively priced" housing and the opportunity for a secure and decent "roi", pressure to diversify ones portfolio (that which left of it) including commercial and industrial property.

 

Opportunity knocks and the Local Market-

70 million baby boomers, first time homebuyers, internationals and investors are still poised to buy an affordable home, lifestyle and investment property but have been cautiously waiting on the opportunity and the market.

Real Estate in comparison to other investment platforms such as the stock market, has fared far better, historically has continued to draw good appreciation and most of all...can be enjoyed!

Our resort realestate market has survived the turbulent ride better than much of California and many other markets that overbuilt propelled by the insatiable demand of the investment market.

The Lake Tahoe basin has some built in supply factors, inherent with the slow growth environmental policies which helped insulate the area to some extent.

That said however the market has seen a decline in median home price of approx 20% over the past 2.5 years driven by the foreclosures, short sales and motivated sellers.

The good news is that inventory is down (as compared to the past year) 10% approx and pending a sales are up by over 20%.

As long as the interest rates and the flow of money holds, I'm forecasting a continued increase in pending sales and closed escrows, even in this beleaguered economy.

Real Estate represents a sound investment at this time.

I'll send you Dr Yun's report as soon as it is out, however I've attached the International home buyer's profile for your review as it is a dynamic at play in our market.

Happy Thanksgiving to you and yours.

Best Wishes,

Deb Howard
Deb Howard & Company
Lake Tahoe's Real Estate Resource
866-542-2912 toll free
530-542-8657 fax
deb@realtordeb.com
www.realtordeb.com
3599 Lake Tahoe Blvd. Ste A
South Lake Tahoe, CA 96150

South Shore Lake Tahoe

The dog days of summer are upon us! We are ramping up for increased real estate activity on Tahoe’s South Shore which almost always grows progressively through the start of summer and until the end of October. The Tahoe Fall season has become a popular time for our tourist guests to visit us and I expect we’ll see this seasonal trend again this year.

Though things are far from typical…it certainly hasn’t been “business as usual” for us in the past few years. With the unprecedented run up of prices from 2001 to early 2006, followed by an unprecedented down turn in the market since, we have been hard at work keeping up with the changing dynamics in the market.

 

But what a difference a year makes (or 2-3)
 
At this time in 2007 we were recovering from a horrific firestorm that destroyed 250 homes and structures in South Tahoe. Much more damaging than the physical destruction, was emotional devastation and toll on the many families affected by the fire. As small communities are known for, we pulled together and rallied around the fire survivors, opened our doors and hearts and started the healing.

Today many of the families are returning to their “new and improved” custom homes or have simply moved on with other housing options. There are still the scars that remain but the “Angora Hills” area, once a lunarscape, is now a bustling sea of construction and positive energy focused on renewal.

Mind you this area’s redevelopment is somewhat of an anomaly given the current state of housing market and the economic downturn and it makes this active construction scene a bit surreal. 

What do the numbers look like since the down turn in the realestate market?

For most of us with our ear to the ground in this industry, we knew that the market couldn’t sustain the continued upwards climb in pricing; there wasn’t an interest rate low enough to offset the high prices and certainly our incomes weren’t growing at the pace of inflation let alone housing prices.

 Although the market came to an abrupt halt in October of 2005 the statistics (see attached) show the median home price of “homes sold” climbing until May of 2006 to an all time high of ~$486,000. Since then home prices have slowly and steadily declined at almost 1% per month to give us an overall decline in price since the peak in May 06 of 21% or $399,000 for the same home sold at the time of this writing.

 

Unintended Consequences and Help is on the way?

No one wants to see their home prices dropping and the terrible consequences it can have on equity (what’s left of it for so many).
However, it is a market place condition that must be observed. We have so little control as consumers and even the lawmakers with the billions of dollars they are pumping into the credit and financial markets seem to have had little immediate impact. But we are hopeful the government assistance with GSEs will shore up the shaky credit markets and provide options to the hundreds of thousands who are facing upside down pricing to mortgage scenarios.

Some Good News with a touch of reality!

The bright news is that due to the new levels of affordability (pricing), buyers are coming back in to the market place, this not just perceived but rather real. Here’s the new trend information that I have observed:

Since January of 2008 we have seen, on an average, the year over year pending sales numbers increasing and have continued to do so for over 7 months.  Certainly in our office we are up over 20% in pending and closed sales from this time last year.

While the number of sales are picking up, comparing it to the early 2000’s, there is nothing to brag about. That said, it is a very good indicator that buyers, who have waited out the market, are returning. What is attracting the buyers back in to the market is the lure of a great bargain; short sales, foreclosures and “killer deals”, and there are plenty to be had, even in our resort market.

Having waited for the right time to buy these investors are interested in value first and foremost…so, pricing is key negotiating point in current transactions. Having a great negotiator on your side is critical. Ultimately, it takes a win – win to put a sale together and a knowledgeable team to close them (even more important these days).

Forecast for the next year-
 
If the economy can remain relatively stable along with interest rates I believe we’ll see the housing market emerge as one of the growing markets again.

Resort real estate is an interesting barometer of the economy. Tahoe real estate is generally viewed as a “luxury lifestyle” purchase but in recent years with an aging baby boomer population (a key target demographic), our market has become a safe “investment” option for those that have money to shelter and invest. The returns are great not only in the financial ROI sense, but in the quality of life department too. With the 1031 tax rules in place and the conversion rules of your investment property into your primary (which have recently undergone some changes, check with your accountant) many are converting heir vacation rentals into their retirement homes and/ or moving to Tahoe and telecommuting.

While I do see prices continuing to settle, certainly until the foreclosures and distressed sellers are out of the inventory, I believe we are near or at the bottom of the market in terms of bargain pricing. No doubt the next few months will tell the story, and we’ll keep you posted of course.

For more information email us at deb@realtordeb.com
Or call us toll free 1-866-542-2912

It is our pleasure to earn and retain your business!
We wish you and yours a fabulous fall season and hope your summer was all you wanted it to be, with plenty of Tahoe time!

Best Wishes

Deb Howard
Broker/Owner
NV/CA
3599 Lake Tahoe Blvd. Ste.A
South Lake Tahoe, CA 96150
deb@realtordeb.com

I saw on the local news last night, that single family home sales in nearby Reno were up some 24% over last Year.  After a 13% price correction, I can understand why.  Home sales are up in many locations across the country after an 18 month decline.  With interest rates still low it just makes sense to buy at these prices.  Experts that I've seen on the financial tv networks say that in past housing price declines the bottom is vee shaped and prices tend to rebound quite dramatically.  Let's hope so. 

Originally Posted by Gigi Haskins
on 3/31/2008 9:33:49 AM

Finally here is some good news on home sales. Wall Street and others cautiously applauded this week's home sales reports as a sign that the real estate and stock markets may be "scraping along the bottom" in preparation for some slight improvement later this year or in early 2009.

MAKING SENSE OF THE STORY FOR CONSUMERS:

    * There is increasing optimism that the Federal Reserve's recent efforts to lower interest rates and shore up Bear Stearns are having a positive effect on the stock market and may start to bolster home sales later in the year. While it is too early to call a "bottom" to the decline, these signs are  positive indicators.

    * A large inventory of homes to choose from, favorable interest rates, and increase in the FHA and conventional mortgage loan limits ( in South Lake Tahoe the limit is $ 580,000. ) mean consumers will continue to experience favorable pricing in many areas of the state including South Lake Tahoe.

So, if I can help you with any of your South Lake Tahoe Real Estate decisions please let me know. I am here to help you and go
with you all the way in consulting and seving you.

Gigi Haskins

Your Realtor with an International touch

Je parle Francais, Ich spreche Deutsch, Hablo Espanol - English and "American"

Gigi Haskins
Buyer Specialist
gigih@realtordeb.com
Deb Howard & Co.
Lake Tahoe's Real Estate Resource
866 542 2912 OFFICE
925-818-1498 CELL

Originally Posted by Deb Howard
on 3/25/2008 7:38:19 AM

Bring it on! Spring that is!

Hope springs eternal and we are very hopeful this year that as the season changes from Winter to Spring that it will bring with it a renewal
of interest to our Lake Tahoe Real Estate market.

We're well prepared for the anticipated turn in the market;

PRICES have not been better in years for the resort and home buyer who find the time to be right to get off the fence and find that Lake Tahoe mountain dream home. Median homes prices for our South Shore residential homes that have recently sold are down about 7% -10% from the height of the market and are currently sitting around the $435K price range. You'll be amazed at the amount and quality of home that you can find and at what amazing values are to be had.

INTEREST RATES are anticipated to drop to the best rates they've been in many months perhaps as low as we have seen in recent years, with fixed 30 years rates
hovering around 6% and anticipated to go lower.

HOME LOANS AVAILABLE- Thankfully the fed has been very aggressive in the financial markets with the infusion of billions of dollars of Fed backed funds for purchase money home loans and even more importantly refi alternatives to the ugly neg am sub prime loans that have been the demise of many home owners sadly. This will certainly be a big help as we hopefully turn the corner of a very shaky economic time in our history.

LIMITED SUPPLY- Unlike many markets, particularly in California and lager urban cities through out the nation, we have very limited supply of new development. While this is troublesome for those who have wished to build over the years it has served to keep our prices relatively stable and will continue to do so as the economics of "supply and demand" will continue to serve our realestate values well. Currently there are a approx 400 residential homes on the market at this time in the California south shore market place. The median home price of our actives residences currently on the market are hovering around $535K. To view them go online to www.realtordeb.com and see what fabulous values are to had right now.

NEGOTIATE- While the supply is stable, there's a great variety of homes, condos and a cabins to buy and call your own and the willingness of our sellers to negotiate has never been better. Today's seller's are serious and have priced their homes for the current "buyer's market" prices and negotiation practices.

If you're in the market for the perfect Lake Tahoe property, our team of buyers' specialists are ready to find if for you. Feel free to start your search right now on our user friendly, easy to navigate web site or here at  www.realtordeb.com. You'll find all the great homes, trends and stats of our current market place and you'll find a full profile our team of local realestate specialists; the most knowledgeable and enthusiastic in providing you the personal touch you deserve. 

Our best to you and yours this Spring with our hopes that it will bring us together as we assist you with your real estate needs.

Best Wishes,

Deb Howard

Tips for purchasing a home

Originally Posted by Shannon Witt
on 3/25/2008 11:33:49 AM

10 Ways to Prepare for Homeownership  

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements. 8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal. 9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process. 
 
    
7 Reasons to Own Your Home  

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.  
 
Tax Benefits of Homeownership  

The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works. Assume: $9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______

$12,577 = Total deduction Then, multiply your total deduction by your tax rate. For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56 $3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
Loan Types to Consider  

Brush up on these mortgage basics to help you determine the loan that will best suit your needs.
Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow for a longer term.
Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow significantly in the coming years.
Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.
Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs and offer special terms, including lower down payments or reduced interest rates to qualified buyers.

Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.
 
 
6 Creative Ways to Afford a Home

 

1. Investigate local, state, and national down payment assistance programs. These programs give qualified applicants loans or grants to cover all or part of your required down payment. National programs include the Nehemiah program, www.getdownpayment.com, and the American Dream Down Payment Fund from the Department of Housing and Urban Development, www.hud.gov.

2. Explore seller financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you would do with a mortgage.

3. Consider a shared-appreciation or shared-equity arrangement. Under this arrangement, your family, friends, or even a third-party may buy a portion of the home and share in any appreciation when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and maintenance costs, but all the investors' names are usually on the mortgage. Companies are available that can help you find such an investor, if your family can’t participate.

4. Ask your family for help. Perhaps a family member will loan you money for the down payment or act as a co-signer for the mortgage. Lenders often like to have a co-signer if you have little credit history.

5. Lease with the option to buy. Renting the home for a year or more will give you the chance to save more toward your down payment. And in many cases, owners will apply some of the rental amount toward the purchase price. You usually have to pay a small, nonrefundable option fee to the owner.

6. Consider a short-term second mortgage. If you can qualify for a short-term second mortgage, this would give you money to make a larger down payment. This may be possible if you’re in good financial standing, with a strong income and little other debt. Lender Checklist: What You Need for a Mortgage  

W-2 forms — or business tax return forms if you're self-employed — for the last two or three years for every person signing the loan.
Copies of at least one pay stub for each person signing the loan.
Account numbers of all your credit cards and the amounts for any outstanding balances.
Copies of two to four months of bank or credit union statements for both checking and savings accounts.
Lender, loan number, and amount owed on other installment loans, such as student loans and car loans.
Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate.
Copies of brokerage account statements for two to four months, as well as a list of any other major assets of value, such as a boat, RV, or stocks or bonds not held in a brokerage account.
Copies of your most recent 401(k) or other retirement account statement.
Documentation to verify additional income, such as child support or a pension.
Copies of personal tax forms for the last two to three years.
   How Big of a Mortgage Can I Afford?  

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.

The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________

Multiplier: x 1.32

Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.

For more help, use Fannie Mae’s online mortgage calculators. 
 
Please call me if you need further assistance choosing the right loan program for you. I look forward to helping you find the perfect home in Lake Tahoe.

Shannon Witt