The number of available single family homes within the City and County areas of our MLS has been hovering around 150. That number is very low considering we generally run about 350. Today the number of active listings are even lower at 134.The number of closed sales within the past 30 days is 50. Out of that number only 4 (8%) were short sales and 11 (22%) were bank owned(REO), leaving the balance of 35 (70%) as “regular sales”. Last December REO sales made up 31% while short sales comprised 22.9% of the total number of single family homes sold.
Until we see an increase in the number of available properties, or a decrease in the number of buyers, things will stay busy and prices will be pushed in the upward direction. I am currently in a multiple offer situation with a local family attempting to take advantage of the low interest rates on their first home purchase. Unfortunately they will probably not get this one because first time home buyers are routinely getting bested by all cash, investor buyers. I’ll keep fighting for them in this boxing ring called The Tahoe Real Estate Market though.
Well, here we go with NOAA forecasting snow for Lake Tahoe there is a feeling of urgency. What do the abundant number of falling pine cones, huge population of yellow jackets and hyper acvive squirrels and Ste
llar’s Jay indicate? Some say a heavy winter. We would love to see that since we got a marginal amount of snow last year and lake levels are low. We are busy at our house making the swap from summer to winter (the kayaks went to storage yesterday). Whatever happens , I am excited to see the seasons change and welcome cooler days with the possibility of a long wet winter. I’ll tell you in the Spring if all the signs for a wet winter mean anything.
In South Lake Tahoe that means properties which are listed under $300,000 and perceived to be a great value. In low-inventory markets, some buyers are having a hard time finding a home to buy. There are steps you can take to improve your odds of finding a home at a time when interest rates are at record lows and affordability is high.
One approach is to broaden your search. You should be clear about what it is you want to buy. But, home buying involves making compromises. Just make sure you don’t give in on the essentials. You need a home that will last you for the long term. Avoid listings with major defects that will be expensive or impossible to fix.
The sorts of features you should be willing to give up, if necessary, are house style, or a large yard, which can be a maintenance drain. If you’re having no luck buying in your first-choice neighborhood, check out the adjacent areas. These could be the next turn-around neighborhoods when the overall housing market improves.
You could also do an about-face and consider condos rather than single-family homes. This might have the advantage of shortening your commute to work.
Ask your agent to cull the inventory of expired, withdrawn, and canceled listings that didn’t sell in the last year or two. These may not have sold because they were priced too high. If the sellers are still interested in selling, and aren’t locked into a lease, you might be able to work out a mutually acceptable price.
Be open to making improvements rather than holding out for a home that’s in move-in condition. Major fixers will probably be snapped up by investors to rehab and resell at a profit. This is a competitive market and not one for novice homebuyers.
However, if a listing isn’t receiving attention because of its dated décor, this could work if you intend to live in the property and not try to flip it for a profit. Be sure to work with an agent who has experience with cosmetic renovations, or consult with a decorator.
You’d be surprised what updated plumbing and light fixtures, new paint, floor finishes, appliances and improving the outdoor living can do to turn a dowdy listing into a comfortable abode. Just make sure you don’t tackle too much. You don’t want to over-improve for the neighborhood, and structural issues are taboo.
Don’t exhaust yourself by bidding on a house you can’t get. A home was recently listed for $985,000. Seventeen buyers made offers. It sold for $1.2 million. Underpriced listings are often bid up in a low-inventory market. Wait to make an offer until you find a listing that’s priced within your affordability range.
Don’t be afraid of accepting a backup offer if your bid isn’t accepted. The transaction fallout rate is pretty high in this market. Keep looking for another listing while you’re waiting to see if the first deal goes through.
All-cash offers tend to win in multiple-offer competitions. To be competitive, try to put yourself in a position to pay all cash. If you have savings you can tap and you can secure a private temporary loan from parents or borrow from a 401(k), you might be able to make a cash offer.
If your parents are providing some of the financing, ask them to write a letter that you can provide to the sellers that confirms your source of funds. This should be accompanied with documentation of the parents’ funds. You can refinance into a conventional mortgage later.
THE CLOSING: If the market where you’re looking is too hot, you can take the watch-and-wait approach. The market is always changing. When inventories increase, there will be more opportunities for buyers. Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.
The numbers for November continue to amaze me. With closed sales down from the previous month at 46 and a remaining inventory of 255, that makes the absorption rate 5.54 months for single family homes in the City and County areas. The really amazing factor is the continuing decline in prices. Even with low inventory, low interest rates there is still a lack of consumer confidence. I say again, if you are thinking of investing in Tahoe Real Estate, this is the time to buy.