1) Prices decline!
The Lake Tahoe South Shore California market has experienced a continued decline in prices since May of 2006. The decline from the peak is about 18.5 % per the South Tahoe Assoc of Realtors (STAOR) (end of Feb stats) for sfd homes. This is paltry compared to the statewide average of reported price declines of 50% as per the CA Assoc. of Realtors (C.A.R.) (as of early Mar).

The price declines in the South Shore market place have lessened to a 8.4% decline this past month as compared to the previous month and is verging on a lessening of the decline trend. We look for any bright news.  The decline while not a steep as many other markets, is attributable to the toxic loans that have generated foreclosure san short sales, yes even in our resort market trend.
 
2) Sales Increase!
Finally a ray of bright news in this dismal economy, albeit a small up tick we have experienced an increase in sale year over year of 5.5% increase in homes sold (same geographic range of south shore California, STAR reporting area). Median home price is just under $400,000.00. The market below median drives the sales units, the moderate range market above $500,000.00 is maintaining its unit sold (year over year) but the high end " luxury" market (above $1M) has suffered a 50% decline in units sold , but has experienced only modest declines in price.
 
3) Time to buy? Pending sales are up dramatically
The Impact of low prices and low interest rates is bringing out the buyers. But to move your property today it must be priced at or below the competition in order to get the attention and the offer. Pending sales have been increasing (year over year) for the past 12 month cycle and has finally translated into an increase (modest) in sales.
Interestingly the stats indicate that while distressed sales (foreclosures and short sales) make up a minority of the listing inventory, it dominates the pending and sold units of the past year.
 
4) Supply and Demand-
We have approx. 400 sfd units (inventory) on the market which has been tracking slightly less than previous periods (year over year). This is an indicator that the serious sellers are on the market and that the inventory is starting to move. However the absorption rate, units available "supply"  and units in escrow "demand”, is still high at about 10 months and 15 months for units on the market vs sold units in Feb. per STAR stats. As the distressed inventory decreases the prices will stop dropping.
 
5) When is the market correction going to end and the turn around begin?-
What are the factors that will create a balanced market (something we in the industry look forward to)?  Is it off in the foreseeable future and will it be affected by the number of buyers entering the market?
If the attraction of the low prices (we're back at early 2005 and late 2004 pricing at the time of this writing) continues to drive the market.
Polishing off my crystal ball ... I anticipate a market turn around this fall and here's why.
a) Supply and demand is driving the inventory increase in sales and I anticipate this will continue exponentially though summer, which is typically our peak months.
b) As buyers recognize the investment value as well as the intrinsic benefits of property owners, particularly in the Lake Tahoe area, the sales will increase, fueled by the fact that the,
c) Values are hovering below the cost of construction and,
d) The cost of homeownership rivals rent payments and rental roi, gross multipliers and cap rates make sense.
e) They ain't making any more...Thank you TRPA, buildable land is in scarcity and will continue to be so due to the environmental constraints. A goal everyone has here in Lake Tahoe.
 
6) Stimulus Plan- is it stimulating?
At the time of this writing, the flow of money is just entering the pipeline. Credit available to the banks who in turn will lend to consumers to remedy the sins of the sub-prime through mortgage mods and new purchase money, is critical to stopping the escalation of foreclosures and short sales. Hopefully the impact will be to keep homeowners in their homes and attract new homeowners into the home buying market. The key piece is of course creating homeowners with realistic payments and purchase prices.
The tax credit is also attractive, and many states have their own tax credits too.
For more information on this go to my web site at www.realtordeb.com and see the home page articles and links.
 
Look forward to hearing from you with any questions or comments.
Here's to a healthy economy and real estate market.
 
 
 
Best Wishes,
Deb Howard
NV/CA Broker Owner CRS, RSPS, EPRO
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

Here's the latest stats for the current period as compared with year over year stats.
 
1) We have seen 1 year of "year over year" increases in pending sales and
 
2) we are finally we are seeing the units solds category increase (year over year).
The prices have undeniably declined at approx 20-25% since the peak in May of 2006-
Will they go lower, perhaps some, probable. But we are near or at the bottom of this market cycle as demonstrated by the increases in pending and closed escrows.

3) Inventory has stayed relatively stable, another good sign of recovery as we have no new development to effect the supply and demand ratios. I won't go so far as to thank TRPA for their building restrictions, but at this juncture it is a good dynamic (certainly the environmental consideration is a good thing).
 
I'm hearing from investor/ buyers that they are looking to real estate to diversify their ( diminished albeit) financial portfolio and real estate is becoming once again the preferred vehicle; enjoyment of use, income and deductibility.
 
I would encourage investors and buyers to consider their long term life style investment, family enjoyment and I hope they will consider Lake Tahoe Rea Estate.
 

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

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 Deb Howard
on 6/9/2008 11:16:31 AM

While Tahoe has been a popular destination of International visitors and investors historically, it is becoming ever more so based on a few things that I have observed
in addition to my notes on the NAR DC visits;

1) globalization and immediate access to information expanding the exposure of our resort market to the international market,
2) access to resorts (you can get here from there)
3) Desirability of 4 seasons resort,
4) As said earlier - Values! safe investment, enjoyment, weather and good exchange rates are driving a lot of new interest.

The move up market of existing foreign investors is another market we are experiencing.
Antidotally I have a couple who are from Singapore who are looking to upgrade from a vacation income property they already own here in Tahoe to another larger grander property to retire to 6 month out of the year. (check on guest/foreign homeowner visitor visas, another good topic to investigate). Water, views, floor plan to accommodate entertaining their friends from around the world and located in a safe or gated community are their top criteria. They also bring with them a whole host of friends and family that will join them in investing in Tahoe.
More to follow.

Deb Howard

Originally Posted by Michelle Keck
on 3/25/2008 12:48:39 PM

I received this information from Norm Hansen of AmWest Mortgage on Monday, March 24th, 2008.  It contains valuable information about the local Tahoe market and the lending industry.  I hope you find it useful!

 

Good Morning,

The Federal Reserve has been discussing the possibility of buying mortgage backed securities to add liquidity to the markets.  My sources suggest that this will not happen because it will set a dangerous precedent. Instead, the Feds are going to lend money to banks using these mortgage backed securities as collateral, a much more conservative approach.  This added liquidity will surely improve rates.

 

So far today, Mortgage Bonds are getting battered down lower, as Stocks surge higher.  One reason Stocks are moving higher is the expectation that the buyout price of beleaguered Bear Stearns will likely be raised from $2 per share to $10. This is an overall boost to the financial sector, which has been the hardest hit area in the latest Stock market downturn.

Today brings some encouraging news for the housing market. Existing Home Sales for February came in better than expected. Potential home buyers should take note that this is a strong sign that we may have reached or are very close to the bottom for home prices. This surprisingly decent read on housing is also helping Stocks move higher and pressuring Bonds lower still. 

However, with Mortgage Bonds trading above an important level of support, I recommend cautiously floating.

Please call me with your questions.

Best regards,

Norm

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