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South Lake Tahoe Real Estate for the Month of August

The South Lake Tahoe real estate market has been so busy this last six weeks that have not been able to keep up on my Blog! With the summer winding down, the real estate market just keeps on picking up steam. The attractive prices, low interest rates, and better economic news seem to be fueling the housing market recovery in South Lake Tahoe. There were 44 single family homes that closed escrow in August, up from 37 in July.

The Statistics for the August Sold Houses in South Lake Tahoe are as Follows

There were 44 single family houses in South Lake Tahoe that sold in August
There were 10 foreclosures in South Lake Tahoe that sold in August
There were 4 Short Sales in South Lake Tahoe that closed escrow in August!
The average sales price was $461,951 (up 14% from $395,570 in July)
The median sales price was $325,250 (down 8% from $353,000 in July)
The average price per square foot was $259 (up 8% from $238 in July)
The median days on the market was 80

Going into August there were 33 short sales in South Lake Tahoe that were in escrow, 4 of them ended up closing escrow last month. Four sold short sales out of 33 short sale escrows does not seem like much, but is an improvement over July when only one short sale closed. The average selling price for the short sales in South Lake Tahoe that sold was $298,500. The median sales price was $209,000. The average price per square foot was $243. The median days on the market for the short sales was 292.

The foreclosures in South Lake Tahoe continued to sell quickly with the average days on the market at 49, including the escrow period. Another interesting statistic for the sold foreclosures is the average selling price to list price. The foreclosures that sold in the first 30 days sold for 104.37% of the list price. The foreclosures that sold from 31 to 60 days of being listed sold for 102.10% of the list price. The sales from 61 to 90 days of being listed sold for 96.14% of list price. There was only one foreclosure that was on the market for over 91 days, and it sold for 84.82% of asking price. The reason that the foreclosures in South Lake Tahoe are selling over the list price is that there have been multiple offer situations on most of them. There have been as many as 10+ offers on a single bank owned property. The bank owned listing at 705 Sand Harbor is a great example. 705 Sand Harbor was listed for $243,300, there were multiple offers ( many offers!), and it ended up selling for $305,000!

Statistics for the Sold Bank Owned Properties in South Lake Tahoe for the Month of August

There were 10 single family foreclosures in South Lake Tahoe that sold in August
The median sales price of the bank owned properties was $283,213
The average sales price of the bank owned properties was $323,203
The average days on the market was 49
The average price per square foot for the sold foreclosures was $186

Activity on vacant lots in South Lake Tahoe was very slow. There were only two lots that closed escrow in the month of August. The two lots that sold were 221 Jacarillo which sold for $87,000 and 2124 West Way which sold for $145,000.

Condos in South Lake Tahoe was the slowest sector of all with only one sale in August. The condo that sold was a short sale at 3344 Sandy Way unit #14 that sold for $138,000. Now that detached single family homes are at prices below what condos were selling for, buyers seem to be choosing the homes.

September is shaping up to be another month of strong sales activity for single family homes. With 43 homes already sold this month, it should surpass the 44 homes that sold in August.

South Lake Tahoe Short Sales

Closing escrows on short sales in South Lake Tahoe is still proving to be a difficult task. Out of the 227 single family houses in South Lake Tahoe that have sold so far this year, only 16 were short sales. It has also taken much longer to to get those short sale escrows closed. The median days on the market for the sold short sales was 174 days including the escrow period, and was only 93 days for the non short sales.

The difficulty of closing escrow on the short sales does not seem to be scaring buyers away from the short sale listings. Currently there are 103 single family houses in escrow on the South Lake Tahoe mls, and 34 of those homes are short sales. With 1/3 of our current escrows as short sales, it will be interesting to see how many of those escrows actually close. For buyers looking to purchase a short sale in South Lake Tahoe, there are still 51 active short sales currently available on the mls.

For the short sales that have sold so far this year, the average price per square foot was $225. The average price per square foot for the non-distress sales was $264, and the price per square foot for the sold foreclosures was only $193.

If you are thinking about purchasing a home in South Lake Tahoe, I would definitely not rule out short sale listings, but I would recommend asking your real estate agent about the pros and cons of short sales before writing an offer on one!

Why Selling as a Short Sale is Better Than Foreclosure

There has been a lot of questions about how short sales and foreclosure will affect homeowners in the future. Credit Financial Planning Inc., www.creditfixed.com provided some great information for homeowners that are deciding weather to short sale their homes or let them go to foreclosure.

Here are some of the advantages of selling your home as a short sale instead of letting your home be foreclosed on.

Fannie Mae Guidelines for Primary Residence Loans- If you short sale your home, you will be eligible for a Fannie Mae backed mortgage after 2 years with no restrictions. With a foreclosure eligibility would be after 5 years with restrictions, and after 7 years with no restrictions.
Fannie Mae Guidelines for Non Primary Residence Loans- An investor who has done a short sale is eligible for a Fannie Mae backed mortgage after 2 years. An investor who has had a property foreclosed on cannot get a Fannie Mae backed loan for 7 years
Credit Score- With a short sale, late payments will show up as short as 12 to 18 months after the completion of the short sale. Credit scores can be affected negatively 50 to 100 points depending on how the lender reports it. With a foreclosure, the credit score is typically affected for at least 3 years. Credit scores will be negatively affected between 200 and 300 points.
Credit Application Questions (Form 1003)- There are no questions on the credit application regarding a short sale. If you have had a foreclosure you will need to answer “Yes” to question C, section VIII: Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?
Credit History- Short sales may or may not be reported on a credit history depending on how the lender reports it. A foreclosure will remain as a public record for 10 years or more.
Security Clearance- A short sale does not usually raise red flags regarding security clearance. With a foreclosure, security clearance will usually be revoked.
Deficiency Judgement-On a short sale, this is a negotiable issue between the seller and the lending institution. With a foreclosure there are no negotiations between the homeowner and the lending institution. It is up to the lender whether to file a deficiency judgement.
Deficiency Judgement- If there is a deficiency judgment on a short sale, the amount is usually lower. The foreclosure process usually will cost the lender more, hence resulting in a larger deficiency judgment if the judgment is filed.

Selling your home as a short sale can be a good option for homeowners who have a financial hardship instead of foreclosure. If you are considering selling your home as a short sale, the first step is to contact your CPA and attorney to make sure that it is the best option for you. The next step is to call Brent and Jill Johnson for more information on how to short sale your home!

Please contact us for more information regarding short sales in South Lake Tahoe. You can also view a current list of bank owned foreclosures in South Lake Tahoe for sale.

Bank Owned Property in South Lake Tahoe on a 43,007 Square Foot Lot!

If you are looking for a project, this new foreclosure listing in South Lake Tahoe is a great opportunity. 1607 Miztec is a 2556 square foot home at the end of a very quiet street on almost an acre. This county home has private setting surrounded by open land and tall pines. A remodel has been started on this home that was built in 1974 and all sheet rock has been removed. Here is your chance to purchase a one of a kind setting in South Lake Tahoe. This bank owned property is to be sold in as is condition. There is a ton of possibilities for this bank owned foreclosure listing!

1607 Miztec Offered at $295,000!

2556 square foot “Project” home
43,007 square foot lot
4 bedroom, 3 bath, 2 car garage
Bank Owned Foreclosure Listing in South Lake Tahoe
Endless possibilities!!!

Here is a complete list of all current foreclosures for sale in South Lake Tahoe. For more information regarding foreclosures in South Lake Tahoe or South Lake Tahoe real estate, please call Brent and Jill Johnson at (530) 416-2625 today!

Short Sales Are Here to Stay!

The number of short sale listings on the South Lake Tahoe mls has been on the rise, and many buyers are now giving short sale transactions a chance. Out of the 519 single family homes on the market in South Lake Tahoe, 75 are listed as short sales. Currently 32 of the 75 short sale listings in South Lake Tahoe are in escrow.

With so many homeowners in trouble or upside down on their mortgages, lenders are now realizing that short sales can be a better option than foreclosure. According to Sean O’Toole, founder and CEO of ForeclosureRadar“While many complain that lenders are foreclosing too aggressively, and others claim a wave of foreclosure sales is imminent, the data actually shows that lenders are doing everything possible to delay foreclosure. The reality is that we have very few homeowners being foreclosed on when viewed as a percentage of those scheduled to be foreclosed on, delinquent, or upside down on their mortgage.”

Although lenders are taking short sales seriously, the process is still far from seamless. The time that it takes to get an approval on a short sale is one of the biggest challenges that we are facing. It can take from as few as a couple of weeks to over 6 months to get an approval or to have a negotiator assigned to a short sale file. This time can be cut down by having a real estate agent with experience in short sales. It is extremely important to submit a 100% complete short sale package so that the lender will take your file seriously!

So far this year there have been 158 single family homes in South Lake Tahoe that have been reported as sold on the the mls. WIth only 13 out of the 158 homes (8%) sold as short sales, the number of short sale closings is still relatively low. Now that there are 32 short sales in escrow, it will be interesting to see how many of them close in the next few months.

With so many homeowners upside down in their mortgages, it will be essential for lenders to continue to streamline the short sale process. Now that buyers, sellers, and lenders are realizing the benefits of short sales, short sales are here to stay!

Keeping Interest Rates in Mind

Interest rates are an important factor to take into consideration when deciding when to purchase real estate in South Lake Tahoe. An increase in mortgage interest rates means that your payments will increase, or that you may need to lower your price range. Currently 30 year fixed interest rates are very low, and have dropped to 5.43%, and 15 year fixed rates are now at 4.91%

Lets say that you are considering purchasing a $300,000 home with 20% down ($60,000), lets look at what the payments would be at various 30 year fixed interest rates.

At today’s current interest rate of 5.43 %, a $300,000 home with 20% down would cost $1,352 per month for principle and interest. The total monthly payment for principle, interest, taxes, and insurance would be $1664.

If interest rates increase to 6%, the principle and interest monthly payment would go up to $1439, and P.I.T.I. would now be $1751.

At 6.5%, the principle and interest monthly payment would be $1517, and the P.I.T.I would be $1829.

For buyers looking to purchase a primary residence using an FHA loan, interest rates are currently 5.375% with one point. A $300,000 house with 5% down ($15,000) using an FHA loan would cost $1620 per month for P.I., and $2063 per month for P.I.T.I.

If interest rates were to go up to 6%, the P.I. monthly payment would be $1734, and P.I.T.I. would be $2177.

At 6.5%, the P.I. monthly payment would go up to $1828, and P.I.T.I. would now be $2271.

South Lake Tahoe real estate buyers should keep interest rates in mind when deciding when the right time to buy. With 93 single family houses now in escrow on the South Lake Tahoe mls, many home buyers are thinking that now is the time to buy!