South Lake Tahoe Real Estate Blog

South Lake Tahoe Real Estate Blog “House Passes Stimulus Bill”

The $819 Billion dollar stimulus package was passed by the U.S. House of Representatives last week. What will it mean for the South Lake Tahoe real estate maket if the Senate Approves the bill?

The current Fannie Mae, Freddie Mac, and FHA loan limits would be prevented from going down, but would be able to increase. This would only be in effect until the end of 2009.
The current $7500 first time home buyer tax credit that was part of the Housing Recovery Act would no longer need to be repaid. The current first time home buyer credit is more like a no-interest loan that needs to be repaid to the government. To qualify for the credit, singles must make less than $75,000 a year for the full credit, of less than $95,000 for a partial credit. Married couples must make less than $150,000 a year for the full credit, or less than $170,000 for a partial credit.
???

Yep, That’s about it for the real estate market. Most of the bill goes towards rebuilding schools, health care, repairing highways and bridges, student loan programs, clean water programs, unemployment, and alternative energy programs. Not to say that these areas are not important, but The housing market seems a bit left out.

The proposed stimulus package will cost more than the entire Iraq war! I hope it works!

We should see a small increase of activity by first time home buyers if the Bill goes into effect. I think that South Lake Tahoe home buyers are be more concerned with interest rates and home prices than anything. The foreclosures for sale in South Lake Tahoe are already selling like hot cakes. There are currently 37 foreclosures on the South Lake Tahoe MLS, and 20 of them are in escrow! Interest rates are still low, about 5.1% for a 30 year fixed loan.

Blog post by South Lake Tahoe Real Estate agent Brent Johnson. For more information about houses for sale in South Lake Tahoe, South Lake Tahoe real estate, or the South Lake Tahoe MLS, contact Brent and Jill Johnson today!

Tahoe Island Drive

The South Lake Tahoe MLS divides the city of South Lake Tahoe into 16 smaller areas. The Tahoe Island Drive area is located between Tahoe Keys Blvd. and Highway 89, just south of the Tahoe Keys area. Tahoe Island Drive is one of both locals and second homeowners favorite areas due to its location, affordability, and setting.

The Tahoe Island Drive area is minutes away from the South Shores best beaches by either car or bike. There is a bike trail that parallels Highway 89 and leads to Pope beach, Baldwin beach, Kiva beach, Valhalla, Camp Richardson, Fallen Leaf lake, and beyond. Tahoe Valley Elementary School is located right off of Tahoe Island Drive. Homes are also close to shopping, restaurants, and the Tahoe Keys Marina.

The setting in the Tahoe Island Drive area varies depending on the street. Some of the houses back meadows and National Forest Service land, but most homes will back another house or lot. There are towering pine trees throughout the entire area that give the neighborhood that “Tahoe Feel.” Great mountain views are rare here due to the trees and the location, but some of the meadow front homes do have good views.

Houses for sale in the Tahoe Island Drive area average in the upper $300,000 range. There are fixers and foreclosures for sale in the $200,000’s. There are also large new and newer homes for sale over $600,000.

Houses For Sale in South Lake Tahoe May Not Have BMP’s

If you are thinking about purchasing a house for sale in South Lake Tahoe, you need to know about BMP’s. Best Management Practices (BMP’s) are an erosion control measure designed to help prevent storm water runoff from entering Lake Tahoe by capturing and infiltrating it. Storm water runoff carries sediment and nutrients into the lake which reduces the lakes famous clarity.

In 1992 the Tahoe Regional Planning Agency (TRPA) created the TRPA retrofit ordinance. The ordinance requires all developed properties in the Lake Tahoe Basin to have BMP’s installed by October 15th 2006. Although new houses in South lake Tahoe built after 1992 have BMP’s installed due to regulation through local building departments, most other homes still do not. The TRPA has fines set in place for properties that do not have BMP’s installed yet. The fees are as follows:

non-compliance for over 1 year $1,000
non-compliance for over 2 years $2,500
non-compliance for over 3 years $4,000

We are already 3 years past the ordinance deadline of October 15th 2006, so I called the TRPA to find out more about the fines. I was told that no one has been fined, and that they would rather see property owners spend the money on installing BMP’s instead of fines. The TRPA did say that there are 3 different watershed priorities, 1,2, and 3. If your property is in a priority 1 watershed, they will begin enforcing the ordinance. First they will send a letter to you telling you about the requirement. Then they want to see that you are making reasonable progress in installing your BMP’s. If you show reasonable progress, they will not issue a fine.

Each property will have different BMP requirements based on slope, soil, location, and your structure. You can have the Tahoe Resource Conservation District (TRCD) preform a BMP evaluation and design the BMP’s foryour property. The TRCD is a grant funded, non regulatory agency that focuses on assisting single family homeowners with controlling erosion, native and adapted landscaping, and many other conservation initiatives. The TRCD currently has a waiting list for BMP evaluations, and will not evaluate a property until the snow has melted, so you should sign up soon!

BMP requirements are different for each property, but generally BMP’s consist of three basic requirements.

Installing gravel filled infiltration trenches about 6″ deep under all dripping roof lines.
Installing about 3″ of gravel under all elevated decks, overhangs, and cantilevers.
Having a paved driveway for parking, and maintaining all of the runoff from the driveway by either a drywell or gravel filled trench.

BMP’s can be installed by the homeowner, or a licensed contractor. The TRCD has a list of contractors that specialize in BMP installations. Depending on the size of the property, BMP’s can cost anywhere from a few hundred dollars if you choose to do the work your self, to many thousands if you hire a contractor or need to pave a driveway.

If you have a house for sale in South Lake Tahoethat does not have BMP’s, it would be a good idea to have an evaluation done for your property. If you are thinking of purchasing real estate in South Lake Tahoe, make sure that you find out if the property has a BMP certificate or not. If there is no BMP certificate, be prepared to install your BMP’s!

This South Lake Tahoe Real Estate blog was written by South Lake Tahoe Realtor Brent Johnson. Brent Johnson sepcilizes in houses for sale in South Lake Tahoe, South Lake Tahoe Real Estate, and foreclosures for sale in South Lake Tahoe. For more information about any properties on the South Lake Tahoe MLS, contact Brent Johnson today!

Sierra Tract

The Sierra Tract area offers buyers some of the most affordable homes for sale in South Lake Tahoe. Houses in the Sierra Tract are now priced in the upper $100,000’s for a small cabin or a foreclosure, up to the $500,000’s for a new home.

The Sierra Tract is located in the center of South Lake Tahoe between the Truckee River and Trout Creek Meadows. The streets that boarder the meadows have great mountain views,

meadow views, and can back National Forest Land. Most of the houses in the Sierra Tract are situated on 5,000 square foot lots in a “block” style subdivision, and back up to another home.

Weather you are a first time home buyer, or you are looking for an entry level area to invest in South Lake Tahoe Real Estate, the Sierra Tract is the perfect area. The Sierra Tract has easy access from both Highway 50 and Pioneer Trail which means that you will have no trouble getting to Heavenly Valley, the casinos, or the sandy beaches of Lake Tahoe.

The Sierra Tract also has multi-family properties along with single family homes. There are a few apartment style buildings along Sierra Blvd., and there are also some duplexes scattered around the area.

Foreclosures in South Lake Tahoe are Keeping the Real Estate Market Alive

Currently there are 279 single family homes in the city and county areas of the South Lake Tahoe MLS. Out of the 279 houses on the market, 36 of them are in escrow (about 13%). 39 of the houses on the market are foreclosures which accounts for 14% of the market share.

Why do I think that foreclosures are keeping the South Lake Tahoe real estate market alive? Out of the 36 houses that are currently in escrow, 17 of them are foreclosures. That means that 47% of our current escrows are foreclosures, which is a lot considering that only 14% of our total single family inventory is foreclosures! That means that only 8% of the total non-foreclosure inventory is in escrow, and 44% of the total foreclosure inventory is in escrow!

Lets compare the foreclosures and non-foreclosures currently on the market.

The average list price for foreclosures is $325,084, 56% less than the average list price of non-foreclosures which is $751,935.
The median list price for foreclosures is $297,000, 46% less than the median list price of non-foreclosures which is $555,000.
The average square footage for foreclosures is 1560 sf., 23% less than the average square footage of non-foreclosures which is 2,028 sf.
The median square footage for foreclosures is 1464 sf., 23% less than the median square footage of non-foreclosures which is 1902 sf.

Here is a comparison between the foreclosures and non foreclosures that are currently in escrow.

Out of the 36 current escrows, 17 are foreclosures.
The average list price of the foreclosures in escrow is $339,624, 32% less than non-foreclosures which is $492,829.
The median list price of the foreclosures in escrow is $290,000, 25% less than non-foreclosures which is $389,900.
The average square footage of the foreclosures in escrow is 1708 sf., 6% less than non-foreclosures which have an average square footage of 1822 sf.
The median square footage of the foreclosures in escrow is 1536 sf., 5% less than non-foreclosures which have a median square footage of 1616 sf.
The average days on market for the foreclosures in escrow is 72, 46% less than non-foreclosures that have an average days on market of 133.
The median days on market for the foreclosures in escrow is 64, 54% less than non-foreclosures that have a median days on market of 140.

If you take away the foreclosures in South Lake Tahoe, we would have only 19 single family escrows, which is why I think that the foreclosures are keeping the South Lake Tahoe Real Estate market alive!

Click here to view a current list of foreclosures in South Lake Tahoe. For more information about real estate in South Lake Tahoe please contact Brent and Jill Johnson today!

South Lake Tahoe Homes Foreclosure Auctions

If you are thinking about purchasing a property at a lender foreclosure home auction, make sure that you read the fine print!

I recently received a phone call from a gentleman from the Bay Area who was very excited about a foreclosure in South Lake Tahoe that was going to auction on January 31. The bank owned house was located at 1031 Bowers Ave. I knew about this house because it is currently listed on the South Lake Tahoe MLS. He was planning on going to the auction in Sacramento and bidding on the home sight unseen! He had asked me if I knew anything about the house and, If I could go take a look at it for him. I had to explain to this person that he would need to hire a licensed home inspector to give him detailed information about the condition of the home. I don’t think that he was willing to spend the effort or the money to do the proper investigation that a home buyer really should do. He told me that the auction company had printed on the auction booklet that the house on Bowers was worth $507,000 and that the starting bid was going to be $159,000!

After hearing the starting bid price for the foreclosure, I figured that I had better take a closer look at the house. I started with the MLS information. 1031 Bowers is a 5 bedroom, 4 bathroom, 1 car garage home in the Bijou area currently priced at $399,000. The auction company said it was previously valued at $507,000? What they mean by “previously valued to” is HIGHER of one of the following:

a) The appraised value of the property in connection with the most recent mortgage on the property. How far back do they go?

b) The most recent asking price, OR

c) The most recent broker price opinion.

Ok, so you may be thinking that $159,000 is still a steal compared to $399,900. Maby it is? Lets look at some statistics. The average days on market for a foreclosure in South Lake Tahoe is 86 days. Bowers has been on the market already for 130 days! Why? Because of the property condition. To the average person the house may look OK. I am also a general contractor so I look a little deeper. The first thing that I noticed is that the house has an old shake roof that needs replacing. Replacing a roof on a 2416 square foot homecould cost over $20,000. The next problem is that the house does not have a foundation! Adding a foundation under a house that size could cost over $50,000! The other problem with a house without a foundation is financing. The auction company may finance the house, but if you want to sell it in the future, you would probably have to find an all cash buyer that is willing to buy a house with no foundation. Good luck! Maby there is a reason that this house did not sell on the MLS, and now must be sold at auction!

Still thinking it is a great deal? Here are some more disclosures about purchasing a home at a lender foreclosure auction that you need to take into consideration.

“Buyers Premium” -Most lender foreclosure home auctions add on a 5% buyers premium to the winning bid price. If the winning bid is $300,000, you really pay $315,000.
Closing costs- Winning bidders are responsible for paying all closing costs including closing/escrow fees, title fees, loan fees, doc fees, transfer tax, and HOA fees.
Financing- No financing contingencies shall be applicable to any properties in the auction.
“As Is And With All Faults”-All auction properties are sold in “As Is” condition.
Property Inspections- All property inspections are to be preformed prior to the auction. The auction company recommends that you have a licenced home inspector inspect the property. This could get expensive if you are planning to bid on multiple properties.
Contingencies- No sale will be contingent upon inspection of the property after the auction and no properties will be open for inspection or access after the auction until escrow has closed.

What about selection?

In this particular auction there are plenty of houses available in Las Vegas, Henderson, and Reno. but 1081 Bowers is the ONLY available house for sale in South Lake Tahoe!

By the time you add up all of the repair costs, closing costs, and hassles of buying a foreclosure at an auction, it may not be worth it!

For more information about houses for sale in South Lake Tahoe, foreclosures on the South Lake Tahoe MLS, or any Lake Tahoe Real Estate, contact Brent and Jill Johnson today!

South Lake Tahoe Real Estate Blog