South Lake Tahoe Real Estate Blog (530-318-5665)

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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. 

Image by Getty Images via @daylife

The listing inventory of single family homes is 291 (City and County areas).  That means if escrows keep closing at 60 per month like the last 30 day period, we will be out of listings in less than five months if no new listings come on the market. An absorption rate like that takes me back to the market of 2004.  The difference now is that prices are on the  way down.  If you were ever considering a purchase in Tahoe, it is a great time to buy. 

It has been a couple of months since I ran the numbers for the market activity in South Lake Tahoe, so I included the past three month’s activity in my calculations.  

354 Active Listings, of those listings 66 are either REO or Short Sale listings comprising 19% of the total.   As usual, these calculations are made on sales activity of single family homes in the City – County areas of the South Tahoe Area Realtors MLS data.

186 Sold listings in the past three months with distressed properties making up 37% of those homes closed.      55 – 30% REO Listings         14 – 7% Short Sale Listings

 Pending listings are made up of 75% of either REO or Short Sales.

The trend in which distressed properties are a minority of the inventory and a majority of those homes that are selling seems to have shifted down a bit.  I will venture to say that “real sellers” have realized that their homes will sell if priced competitively and buyers would rather deal with a “real seller” rather than a bank and certainly rather than a short sale, which is anything but “short’.  It is all about the well priced property.  Let’s see what happens in the next month with the pending listings being comprised of 75% distressed properties. We’ll see how many of the short sale buyers get tired of the wait and snatch up a well priced home that not a distress sale. More Later.

Sales in South Lake Tahoe have increased over the past couple of months.  We were consistently closing 30 escrows a month but have recently jumped up to 129 sales (single family homes only) in the past month. 

444 Active Listings  of those listings 65 are either REO or Short Sale listings comprising 14.6% of the total.   As usual, these calculations are made on sales activity of single family homes in the City – County areas of the South Tahoe Area Realtors MLS data.

129 Sold listings in the past month with distressed properties making up 44% of those homes closed.

33 – 25% REO Listings         25 – 19% Short Sale Listings

90 Pending listings at present with over 55% of those properties are either REO or Short Sale.

The trend continues for distressed properties to be a minority of the inventory and a majority of those homes that are selling.   That continues to tell me that well priced properties will sell in this climate of low consumer confidence and low interest rates.

I was invited to go to Nicaragua on a Medical/Dental Mission trip by a longtime Tahoe friend and I said “Yes”. Way back when, I was a dental assistant and they needed one on this trip. We had no dental instruments or supplies built up in reserve as this was a first mission of this type for my friend who generally does construction projects in Central American countries. I made a few phone calls and was amazed at the generosity of all my old dental contacts so we had more than enough to do the job.

We went to a very poor area in the north western part of Nicaragua called San Ramon and Bonete #7 (which is a word similar to borough) to serve the people, some of them had walked 6 hours to get there. I was told it would be hot, but it was HOT. The work was hard in hard in dirty, smelly places. We were able to provide basic medical services and the Tahoe dentist and I helped approximately two hundred people with pain relief (extractions) over four and a half days of clinics. It was a stretch for everyone and nerves were frayed at the end but I just had to think that I would be cool, comfy (with enough food to eat) at home soon but the Nicaraguans would still be right where we left them. I hope I don’t forget them and their conditions as I see how rich we are here. I am glad I had something to give to these people who gave me so much more than they know.

There is a new may of thinking about foreclosure for the American homeowner,  especially the homeowner who is not in financial distress and is able to pay the mortgage payment.  These homeowners are viewing their homes as bad investments and are choosing to walk away rather than pay for years on a property that may never be worth what they owe.  Take a look at this video from the Today Show where homeowners who are doing just that, and notice the shift from the “guilty feelings” that generally go along with such a decision.  http://today.msnbc.msn.com/id/26184891/vp/36661157#36661157

I am not advocating a position either way on a “Strategic Foreclosure”, but rather, just wanted to make note of this amazing paradigm shift and what it may mean in this economic crisis.

                                                                                                                                                                                                                                                                                                                                                                     Sold Stats for March 2010

•  37 Total Sold Listings in March                  
•  14 REO (37.8%% of total March sales)
•   7 Short Sales (18.9% of total March sales
•   Distressed Properties Comprising 37.8% of total homes sold in March

Active Listings Stats

• 306 Single Family Properties Currently Listed (Not in Escrow)
•   19   REO (.063% of total)
•   35  Short Sales (11.44% of total)
•  Distressed Properties Comprising 17.65% of Market Total

Pending Listing Stats (Homes in Escrow)

•  110 Currently in Escrow  
•    20 REO (18%)
•    53 Short Sales (48%)
•   REO & Short Sales Comprising 66.3% of the Total Homes in Escrow

Average Number of Days on Market (DOM) From Listing to Close of Escrow

•  96 DOM for REO Sales
• 204 DOM for Short Sales
• 232 DOM for Non Distressed Properties

These numbers still show that homes that are a better value are selling quickly, as any of you who have attempted to get an offer accepted on any of these well priced homes can attest. 

The Average sales price for March was $407,790 which is up slightly from February, whose average sales price was $401,652.  Does that mean the end is near, I think not with the number of notices of defaults and notices of sales still out there.  What it does means is that there is still plenty of opportunity for people who are in a position to purchase these homes.  With the threat of increasing interest rates, things could heat up in the buying arena.  Stay tuned for more updates.

Hot news for people 55 or over who are selling a house in another county of California and want to keep their low property taxes.  This is  a big deal.   Until recently this strategy was not available to residents outside of El Dorado County.  With this change you can transfer from any county within California to El Dorado County. 

My husband and I just were successful in utilizing Prop 90 within El Dorado County.  We sold a home and were able to keep the old property tax base on our new home.  It was a bit tricky because we sold our house and were in the process of building the replacement home and would not know the value until later.  The new house needed to be valued by the assessor at an equal or lower value in order to qualify.   We just heard from the County that we were successful.  It is generally not that much of a gamble.  If you sell a house and buy a new one, it is much easier to know that you qualify.  I am including the link to the El Dorado  County’s website http://www.co.el-dorado.ca.us/assessor/prop90info.htm.

On December 10th, 2009, the Board of Supervisors approved the introduction and 1st reading of the Proposed Prop 90 ordinance. On December 15th, 2009 the Board adopted the ordinance after its second reading. The proposed ordinance will have an estimated effective date of February 12th 2010, which is 60 days after the adoption.

As the ordinance is currently written and based on Revenue and Taxation Code Section 69.5 (Prop 90), in order to qualify for a base year transfer:

• The replacement residence must be acquired after the effective date of the ordinance allowing base year value transfers from other counties.
• As of the date of transfer of the original property, the claimant or the claimant’s spouse is at least 55 years of age or severely and permanently disabled. There is no age requirement for persons who are severely and permanently disabled.
• The claimant and/or the claimant’s spouse has not previously been granted the property tax relief provided by section 69.5. The sole exception to this requirement is if relief was first granted for age, relief can be granted a second time if the claimant or claimant’s spouse subsequently becomes severely and permanently disabled, and has to move because of the disability.
• The original propertywas eligible for the homeowner’s exemption or the disabled veterans’ exemption either at the time it was sold or within two years of the purchase or new construction of the replacement dwelling.
• As a result of its transfer, the original property must (1) be subject to reappraisal at its current full cash value in accordance with sections 110.1 or 5803; or (2) receive a base year value determined in accordance with section 69 (intracounty disaster relief), section 69.3 (intercounty disaster relief), or section 69.5 because the original property qualified as a replacement property under one of those sections.
• The replacement dwelling is purchased or newly constructed within two years of (before or after) the sale of the original property.
• The replacement dwelling must be eligible for the homeowner’s exemption at the time the claim is filed.
• The replacement dwelling must be of equal or lesser value as compared to the original property. This means that the full cash value of the replacement dwelling on the date of purchase or completion of new construction must not exceed:

1. 100 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property,
2. 105 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or
3. 110 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.The “full cash value of the original property” includes any inflationary factoring that occurs between the sale of the original property and the purchase of the replacement dwelling. The “full cash value of the replacement dwelling” does not include any inflationary factoring.
   

• If the original property was substantially damaged or destroyed by misfortune or calamity and sold in its damaged state, the full cash value is determined immediately prior to the misfortune or calamity.
• The claimant must file a claim for property tax relief under this section within three years of the date the replacement dwelling was purchased or the new construction of the replacement dwelling was completed.

What a great day here in South Lake Tahoe. We were just working away, happy to be inside the warm office when “What to our wondering eyes should appear?” No, not a reindeer, but a a big black bear right across the street from the office on Tahoe Keys Blvd. He (she?) was just lumbering along then decided to dash safely away from the oncoming cars (approaching slowly, as this is a BIG BEAR). After about ten minutes our Bear friend wandered off down Council Rock probably looking a a place to sleep for a few months.

I have had the recent pleasure of helping several families purchase their first homes. There is nothing more rewarding in my job as seeing the excitement that accompanies moving into your first home. This is the silver lining in the real estate market. Market conditions and historically low interest rates have created a high affordability index which is over 55%. That means that over half of the Californian population can qualify to make the payments on a home. Combine that with the recent extension of the first time home-buyer credit from the feds and we have a great time to be a first time home buyer.

I am loving the fact that I can be part of the process that places these first time home buyers into homes where they can put down roots and raise their families. Especially when their children will grow up here in Tahoe with my grandchildren – watch out when they start to ski.