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Lake Tahoe Real Estate Blog

South Lake Tahoe Foreclosure News

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Foreclosures in South Lake Tahoe still seem to be the target for investors, speculators, and home buyers looking for good deals. There are currently 49 foreclosures listed on the South Lake Tahoe MLS and 26 of them are currently in escrow. Out of the 56 homes sold so far this year on the South Lake Tahoe MLS, 22 were bank owned foreclosures. With the recent steady incoming inventory of foreclosures, buyers have been ignoring most of the non-distress sale listings.

DIstress sales (foreclosures and short sales) currently account for 74 of the 104 single family homes that are currently in escrow. There may be some relief in sight for the non-distress sellers. According to the Mortgage Bankers Association the end of the foreclosure crisis may be near.

 “The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” says Jay Brinkmann, MBA’s chief economist, in a published statement.

Brinkmann said that normally there is a large spike in short-term mortgage delinquencies at the end of the year because of high heating bills and holiday expenditures. This year, there was not only no spike, but the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent.

Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said.

“[This] gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.

The decrease in the delinquency rate is not the only sign that the foreclosure crises in ending. According to an article in The Wall Street Journal by James R. Hagerty (02/23/2010), home buyers that are looking for a steal on a foreclosure is not as easy as it used to be.

 “Home buyers hoping to snag a really good deal on a foreclosed home are finding it increasingly difficult because supply is shrinking.

The number of foreclosures that are available for sale nationwide fell to 617,000 in December, down from 845,000 in November 2008, reports Barclays Capital.

Not only have attractive homes in popular neighborhoods already been snapped up, but also government help for distressed buyers is delaying more foreclosures.

Demand is driving up prices. Investors say typical prices have climbed from 75 percent of appraised value to 85 percent or higher when there are bidding wars.”

Home buyers in South Lake Tahoe are also finding that it is more difficult to find a bargon on an under priced foreclosure. In most cases, the foreclosures that have been listed on the South Lake Tahoe MLS are attracting multiple offers. Many buyers are getting beaten out of deals 3 or more times before they are able to purchase a foreclosure. If the inventory of foreclosure listings follows the decrease in delinquencies, it will only get tougher to find a steal on a foreclosure.

South Lake Tahoe Vacation Rental Tax Deductions

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Many home buyers in South Lake Tahoe are thinking of renting out their home as a vacation rental in order to offset the cost of ownership. This is a great way for buyers to afford a bigger or more expensive property that may have been out of reach with out any rental income. Although the vacation rental activity is down along with housing prices, there is still potential to attract renters during our peak winter and summer seasons, especialy holidays.

If you do rent out your home in South Lake Tahoe, there are some great tax deductions that you do not want to miss. It is important to ask your CPA about the allowed deductions, but here are deductions that owners of rental properties can take as listed on IRS.gov.

  • Mortgage interest
  • Property Taxes
  • Operating expenses
  • Depreciation
  • Repairs

You can deduct the ordinary and necessary expenses for managing, conserving, and maintaining your rental property. Ordinary expenses are those that are common and generally accepted in the business. Necessary expenses are those that are deemed appropriate, such as interest, taxes, advertising, maintenance, utilities, snow removal, and insurance.

You can deduct the cost of repairs that you make to your rental property. A repair keeps your property in good operating condition and does not materially add value to the property. Examples are painting, fixing leaks, replacing broken doors and other parts of the rental property.

You may not deduct the cost of improvements. An improvement adds to the value of the property, prolongs its useful life, or adapts it to new uses. The cost of improvements is recovered through depreciation. Examples are adding a deck, a new fence, or a roof.  Your CPA will be able to calculate the depreciation of the improvements so that the cost of the improvement will be deducted over time.

In my mind, the best deduction for a vacation rental property in South Lake Tahoe is travel expense! Many real estate investors acquire real estate in the places they like to visit. Each time they travel to the property, the travel costs are a deductible expense. That means that if you purchase a rental property in South Lake Tahoe, your next visit to your home will be tax deductible!

This blog post was just a highlight of the available tax deductions for rental properties. I am a real estate agent in South Lake Tahoe, not a tax expert, so make sure to check with your CPA for allowable tax deductions and recent tax changes! For more information regarding properties for sale in South Lake Tahoe, contact Brent Johnson today!

Mortgage Rates and the Real Estate Market in South Lake Tahoe

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There are many South Lake Tahoe home buyers taking advantage of the currently low mortgage interest rates and the homebuyer tax credit that expires on April 30th. According to an article written by Carolyn Said on SFGATE.com, the currently low mortgage rates will soon be on the rise.

After the credit crunch in 2008 when investors stopped buying mortgage-backed securities the Federal Reserve stepped in to ensure that money would keep flowing to home purchasers. The Fed began buying securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae in January 2009 and had planned to conclude the program at the end of the year. The program that has pumped more than $125 trillion into the mortgage market has been extended to March 31.

Experts agree that the expiration of the Fed’s program will cause interest rates to climb, but the amount of the rate increase is still in question.

According to Guy Cecala, publisher of Inside Mortgage Finance said “There is no question that interest rates have been kept artificially low by the Fed’s buying. My opinion is that rates will go up a full percentage initally.” That means that the current 30-year fixed rate mortgages that are around 5% will go up to 6%.

Keith Gumbinger, vice president of HSH Associates, which compiles mortgage data, thinks that rates will slowly rise to 5.75% when the Fed withdraws.

Julian Hebron, branch manager at RPM Mortgage’s San Fransisco office thinks that rates will bump up to about 5.5% with volatility all summer long.

I am optimistic that the Fed’s will see that if they stop buying mortgage backed securities it will decrease the housing affordability index percentage and make it harder for many home buyers to purchase homes. I would be surprised if the program is not extended again.

The low interest rates and the home buyers tax credit has been great for the South Lake Tahoe real estate market. The numer of homes sold in 2009 was up 22% from 2008 showing that home buyers are out there taking advantage of the current market conditions. For those home buyers that are on the fence about purchasing a home in South Lake Tahoe, now may be the best time before interest rates increase and the tax credit expires!

Make sure to see my current list of foreclosures in South Lake Tahoe that are listed on the South Lake Tahoe mls.

South Lake Tahoe Short Sales

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Short sale listings in South Lake Tahoe have become a big part of our real estate market and are not going away any time soon. Close to 20% of the South Tahoe Real Estate listings are currently short sale listings.

What Is A Short Sale?

A Short Sale is the term used to describe a real estate transaction in which the sale proceeds fall short of what the seller owes on the property’s loan. Instead of buying from a seller, you are purchasing the property directly from the lender.  Although you are buying the property from the lender, the seller must first accept a suitable written offer from a buyer.

Once an offer has been accepted by the seller, it is sent to the lender for approval.  Along with the offer, the seller and listing will submit a short sale package which includes information such as the sellers financial statements, listing information, a hardship letter, and many other various forms.

Short sales are often difficult transactions taking considerably longer than a typical transaction to complete. There is also no guarantee that the lender or lenders will agree to the terms of the purchase offer or that they will respond at all. Once the short sale package has been submitted, it may take many weeks or months for the lender to respond,  if they decide to respond. If the lender approves the short sale offer, the home buying process is very similar to buying a property from a regular seller. One main difference is that the property will probably sold in “As Is Condition”. Most sellers and lenders are not willing to make repairs on a short sale property.

Why Make An Offer On A Short Sale If They Are So Difficult?

Although the short sale process can be long and difficult, it can sometimes be worth the trouble. A large percentage of the Real Estate listings in South Lake Tahoe are short sales due to the decline in property values over the last few years. Many of the short sales are priced below the market value, and some lenders are approving the sales of these properties to cut their losses. Lenders know that they could loose a lot more money if the property goes to foreclosure. Many buyers have been able to get great prices on recent Short Sales in Lake Tahoe.

Foreclosures in South Lake Tahoe

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Foreclosures in Lake Tahoe have become a popular target for buyers investing in South Lake Tahoe real Estate. Foreclosure listings have become popular with buyers because they are usually priced below the current market value.

The term “Foreclosure” is actually the legal process by which the bank or lender uses to sell the property in order to satisfy the loan balance in the event of a default. In California, this process is most commonly a non-judicial foreclosure.

When a homeowner stops making mortgage payments, a Notice of Default is recorded with the County Recorder. The homeowner then has 90 days to cure the default. If the homeowner does not cure the default, a Notice of Trustees Sale  is recorded. The Notice of Trustees sale states that the lender or trustee will sell the property at  auction in 21 days.

The Trustee Sale Auction is held as a public auction conducted by the lenders representative. The winning bidder must pay with cash in the full amount of the bid. The lender usually bids in the amount of the balance due plus costs. If no one else bids higher than the lender, the property reverts back to the lender. Once the property reverts back to the lender it becomes an REO.

Why buy an REO?

An REO property is an investment  gone bad to a lender, so REO’s represent a loss to the lender. Real Estate holding costs are expensive and will add to the lenders loss. In order to get money loosing assets off of the books, lenders will price REO’s ( foreclosure listings) to sell quickly. Most of the foreclosure listings in South Lake Tahoe are priced below the current market value. Many times the foreclosures are priced low enough to attract multiple offers.

Purchasing a foreclosure that is listed on the South Lake Tahoe MLS is similar to purchasing a property from an individual seller. Buyers can finance foreclosures just as they can finance re-sale and new homes. Buyers will also have an inspection period that ranges from 10 to 17 days to to any property  inspections that may be  necessary.  Delinquent tax and utility liens will be cleared by the seller, and buyers are issued a clear title and title insurance.

 Most foreclosures are sold in “As Is Condition” which makes a Home Inspection and a Termite Inspection very important.  If problems are found in the inspections that are more costly than anticipated, the buyers can back out and the initial deposit will be refunded, less any inspection expenses. REO property owners are exempt from providing a Transfer Disclosure Statement or a Natural Hazard Disclosure. The seller is exempt from these disclosures because in most cases they have never seen the property and know little about it.

Because Bank Owned Listings in South Lake Tahoe are usually priced below the current market value, they can be a great investment opportunity.  If you are interested in speaking more about foreclosures in South Lake Tahoe, please feel free to call me at (530) 416-2625!

South Lake Tahoe Real Estate Market Update

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Here are the latest statistics for the South Lake Tahoe real estate market as of February 11, 2010.

Currently there are 388 single family house listings on the South Lake Tahoe MLS. 300 of the homes are active and 88 are active pending. With 23% of our housing inventory in escrow, the market is continuing to be very active.

Short sales account for 20% of the single family home inventory in South Lake Tahoe. There are 77 short sales listed on the South Lake Tahoe MLS and 43 of them are currently in escrow. Many of the short sales that are currently in escrow have been in escrow for a long time. The median days on the market for the short sales that are in escrow is 170.

Foreclosures account for 12% of the single family home inventory on the South Lake Tahoe MLS. There are 46 foreclosures listed on the South Lake Tahoe MLS and 22 of them are in escrow.

With 43 short sales and 22 foreclosures in escrow, 65 of the houses in escrow are now distress sales. Having 74% of our current escrows being distress sales is not good news for regular sellers. For more information regarding South Lake Tahoe real estate statistics, please call Brent Johnson today!

Bank Owned Properties in South Lake Tahoe

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In 2009 foreclosures accounted for 137 of the 440 single family homes sold in South Lake Tahoe. Considering that over 31% of the homes sold were foreclosures, there is no doubt that bank owned properties have changed the South Lake Tahoe Real Estate market.

Looking at the South Lake Tahoe Real Estate statistics for 2009, the foreclosures lowered the median sales price, average sales price, average price per square foot, and the days on the market of the homes sold in 2009.

The median sales price was down 22% in 2009 from what it was in 2008. The median sales price of the homes sold in 2009 was $318,000. The median sales price of the foreclosures sold in 2009 was $274,900. If we take the foreclosures out of the statistics, the median sales price goes up to $366,500.

The average sales price was lowered significantly by the foreclosures in South Lake Tahoe. The average sales price for all of the homes sold was $404,364. The average sales price for the foreclosures was $296,076. Taking the foreclosures out of the statistics brings the average sales price up to $453,826.

The average price per square foot for all of the homes sold in South Lake Tahoe in 2009 including the foreclosures was $230. The average price per square foot of the foreclosures that sold was only $190 per square foot. If you take the foreclosures out of the picture, the average sales price per square foot would have been $248.

The median days on the market for all of the homes sold in 2009 was 114 days. The median days on the market for the foreclosures was 70. The median days on the market goes up to 149 if the foreclosures are taken out of the equation.

Just taking the foreclosures out of the statistics changes the prices dramatically, but if you consider that regular sellers also needed to lower their sales prices to compete with the foreclosures, the effect becomes even greater.

Foreclosure sales occured in almost every area in South Lake Tahoe. Here is a list of how many single family home foreclosure sales there were in each area on the South Lake Tahoe MLS in 2009.

  • Al Tahoe had 8 foreclosure sales
  • Bijou 1 had 18 foreclosure sales
  • Bijou 2 had 3 foreclosure sales
  • Black Bart had 3 foreclosure sales
  • Christmas Valley 1 had 2 foreclosure sales
  • Christmas Valley 2 had 3 foreclosure sales
  • Echo View Estates had 1 foreclosure sale
  • Country Club Estates had 5 foreclosure sales
  • Gardner Mountain had 4 foreclosure sales
  • Hevenly Valley had 5 foreclosure sales
  • Highland Woods had 5 foreclosure sales
  • Meyers had 7 foreclosure sales
  • Montgomery Estates had 11 foreclosure sales
  • North Upper Truckee 1 had 5 foreclosure sales
  • North Upper Truckee 2 had 3 foreclosure sales
  • Poineer Trail area had 5 foreclosure sales
  • Sierra Tract had 13 foreclosure sales
  • Sky Meadows had 1 foreclosure sale
  • Stateline had 2 foreclosure sales
  • Tahoe Island Drive had 5 foreclosure sales
  • Tahoe Island Park had 7 foreclosure sales
  • Tahoe Keys had 5 foreclosure sales
  • Tahoe Paradise had 10 foreclosure sales
  • The Y Area had 6 foreclosure sales

Here is what the foreclosures in South Lake Tahoe sold for by price range.

  • Under $100,000= 1 sold foreclosures
  • $100,000 to $139,999= 3 sold foreclosures
  • $140,000 to $159,999= 6 sold foreclosures
  • $160,000 to $179,999= 6 sold foreclosures
  • $180,000 to $199,999= 10 sold foreclosures
  • $200,000 to $249,999= 27 sold foreclosures
  • $250,000 to $299,999= 36 sold foreclosures
  • $300,000 to $349,999= 20 sold foreclosures
  • $350,000 to $399,999= 9 sold foreclosures
  • $400,000 to $449,999= 5 sold foreclosures
  • $450,000 to $499,999= 4 sold foreclosures
  • $500,000 to $549,999= 1 sold foreclosure
  • $550,000 to $599,999= 3 sold foreclosures
  • $600,000 to $649,999= 2 sold foreclosures
  • $700,000 to $749,999= 1 sold foreclosure
  • $750,000 to $799,999= 2 sold foreclosures
  • $800,000 to $849,999= 1 sold foreclosure

With the number of foreclosures for sale in South Lake Tahoe  so far in 2010, the South Lake Tahoe real estate market should supply some great deals for home buyers in 2010. For more information on foreclosures in South Lake Tahoe, call South Lake Tahoe Real Estate Agent Brent Johnson today!

South Lake Tahoe Real Estate Review for January

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Bank owned foreclosures and short sales dominated the South Lake Tahoe Real Estate market in January 2010. Distress sales accounted for 59% of the single family home sales reported on the South Lake Tahoe MLS.  There were 32 homes sold in January, 11 were bank owned foreclosures and 8 were short sales. This is the first time that the sale of foreclosures and short sales have out numbered regular sales since I have been keeping track of real estate statistics in South Lake Tahoe.

Although the number of homes sold was down from 48 in December to 32 in January, this is a big improvement from January 2009 when only 18 homes were sold. The number of short sales in South Lake Tahoe that are closing escrow also continues to improve. There were 8 short sales that closed escrow in January, up from 6 in December, and and 2 in November. That is good news for the 40 other short sales that are currently in escrow on the South Lake Tahoe MLS.

January South Lake Tahoe Real Estate Statistics

  • There were 32 single family homes in South Lake Tahoe sold in January, up from 18 in January 2009, and down from 48 in December 2009.
  • The average sales price for the South Tahoe homes was $348,328, up from $345,350 in January 2009, and down from $472,453 in December 2009.
  • The median sales price for the South Tahoe homes was $317,250, up from $310,000 in January 2009, and down from $346,500 in December 2009.
  • The average price per square foot was $209, down from $261 in January 2009, and down from $220 in December 2009.
  • The average days on the market was 162, up from 123 in January 2009, and up from 155 in December 2009.
  • The median days on the market was 127, up from 94 in January 2009, and up from 110 in December 2009.

The foreclosures in South Lake Tahoe that sold in January sold for an average price per square foot of $195, non-foreclosures had an average price per square foot of $228. The foreclosures that closed escrow also sold quickly, the average days on the market was 65, and the median days on the market was 60. The average sales price for the foreclosures was $269,818 and the median sales price was $215,000.

Short sales in South Lake Tahoe were on a much slower pace than the foreclosures. The average days on the market for the short sales that closed escrow was 239 and the median days on the market was 229. The average sales price for the short sales was $399,438 and the median sales price was $375,750. The average price per square foot for the short sales was $198.

Currently there are 384 active homes on the South Lake Tahoe MLS and 80 of them are in escrow. Short sales account for 40 of the current escrows and foreclosures account for 19. With 59 of 80 of the current escrows being distress sales, February should yield similar statistics to what we saw in January.

Orbitz Ranks Lake Tahoe the #1 Ski Destination in the U.S.

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For the third year in a row, Orbitz Index named Lake Tahoe the top ski destination in the United States. According to Orbitz, Tahoe topped the list by having 18 resorts in the area. The top 10 resorts are as follows:

1.      Lake Tahoe, CA/NV

2.      Breckenridge, CO

3.      Park City, UT

4.      Vail, CO

5.      Winter Park, CO          

6.      Aspen / Snowmass, CO

7.      Jackson Hole, WY

8.      Mammoth, CA

9.      Killington, VT

10.       Durango, CO

 

As you can see, there are some great ski destinations in the U.S. that Lake Tahoe was ranked ahead of.

When you look at home prices, Lake Tahoe also offers value. According to Trulia.com the median sales price for homes in South Lake Tahoe was $287,061 for the quarter ending November 2009. If you compare that with the median sales price of Aspen which was $895,000 or Mammoth which was $452,000, Lake Tahoe becomes even more attractive!

Lake Tahoe is not only a top ski destination, but offers visitors year round activities. Owning real estate in South Lake Tahoe is an opportunity to enjoy one of the most beautiful destinations in the world any time of the year!