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.
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Ask your agent to cull the inventory of expired, withdrawn, and canceled listings that didn’t sell in the last year or two.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.
When shopping for a home in South Lake Tahoe during the summer months it’s hard to imagine what things are like with blowing and drifting snow. You will do yourself a favor if you can try and picture those wintry conditions. Things to consider are: Sun exposure. Does the driveway face north? If so, then you will have little to no help from the sun to melt snow during winter and if you drive over an unplowed driveway – that compacted snow may be there for a long time. Does the entry walk way have cover, or is there a roof edge that will drip and cause an icing problem? The sun is at its highest this time of year, so what kind of sun does the home get? Is it shaded by trees or canyon walls? There are some locations here in Tahoe that only get three hours of sun in December. These are just a few things that you need to consider. Give me a call when you’re ready to shop and we can go over these topics and more in greater detail, you’ll appreciate the help, I assure you.
Here are the sales stats for December 2011 – March 28, 2012
December 2011 Total Sold 61 Short Sales 14 REOs 19
January 40 8 20
February 33 7 15
March 41 7 10
The current inventory of available single family homes in the City and County areas sits at 219. It has been many years since we’ve seen inventory that low. I mentioned in a previous blog that, as the inventory and interest rates remain low, the prices continue to fall, however slowly, and those facts defy the principal of supply and demand. I have personally been in multiple offer situations over the past weeks while representing sellers and buyers which tells me that the consumer confidence is beginning to rise. The wild card in this mix is the inventory of upcoming bank owned properties and short sale homes. The market is good for sellers who want to sell and buyers who want to buy. We are not at the bottom of this market yet, we are close enough that if you are looking for Tahoe home and plan to keep it over the long haul, get in the mix and buy something.