There are 14 foreclosure properties in South Lake Tahoe today. Four homes are new since I last published it two weeks ago. I’m surprised that only two foreclosures went into escrow since the last list. In that same time frame, 32 homes & condos went into escrow. That’s a lot for South Lake Tahoe, so it’s not like buyers have slowed down at all.
A couple properties stand out on this list. 602 Wintoon Dr. was reduced $30,000 a couple days ago and is an incredible buy. 3549 Morton Dr. was listed yesterday. It’s on 3/4 of an acre and backs to the South Upper Truckee River.
As usual, I have more information on properties that will become foreclosures. However, I don’t feel at liberty to publish this information on the internet. If you are interested in those properties or the ones on this list, call me at (530) 545-1831.
This is a video I recently created for my brokerage, Deb Howard & Co. The home is a new listing of ours in South Lake Tahoe. I’d encourage you to watch it in high quality so you can see the property better. If the video stops during playback, just press the pause button and wait a minute for the video to download.
Here is the latest foreclosure list for South Lake Tahoe. There are 11 foreclosures on the market. They are all single-family residences (no condos or multiplexes).
Since the last foreclosure list, there have been a few interesting developments in the foreclosure market. A few properties were just listed. The only one I’m really excited about, though, is 2604 Knox Ave. It is located on a rare 1/4 acre lot in Sierra Tract. I think there could be a ton of value in that purchase. I’ll drive by it tomorrow and post a comment with my thoughts on it.
The only other foreclosure steal that is new to my list is 2508 Cold Creek Trl. It fell out of escrow recently. It’s located in Montgomery Estates, which is one of the most prestigious neighborhoods in town.
There were some significant price reductions on the foreclosure list. In the last two weeks 2587 Kubel Ave. went into escrow, fell out, and then saw a 10% price reduction down to $224,900. Wow! 3705 Montreal Rd. also experienced a huge reduction. It went from $339,900 to $309,000. Both these properties could be sold before my next list comes out in two weeks. (Montreal may remain because it needs a ton of work.) 1612 Choctaw was reduced $24,500 to $474,500.
I have more information on properties that will become foreclosures. However, I don’t feel at liberty to publish this information on the internet. If you are interested in those properties or the ones on this list, call me at (530) 545-1831.
These days many homeowners are defaulting on their loans and risking losing their homes. To save themselves from foreclosure, short sales have become very popular. This evening I found 38 listings in the South Lake Tahoe MLS that are possible short sales. If you are unfamiliar with short sales, here is a great article that was printed in a publication I received from the Nevada Real Estate Division.
Short Sales
By Bruce Alitt, Chief Investigator
A short sale situation occurs when the owner of a property owes more than the market value of the property and has financial hardships that require the owner’s lender or lenders to approve a sale in which the lender(s) will actually receive less than the amount that is owed.
The approval by the lender(s) is required because the loans are liens against the property that must be satisfied in order for clear title to pass from the seller to the buyer. That means that the lender(s) must accept getting less than the amount owed and agreeing that the lien(s) is satisfied and can be cleared.
Even though there must be lender approval in a short sale situation, the owner/seller still must be presented with and accept the offer. That is the critical first step in the short sale process. The owner must accept the offer contingent on approval by the lender. The contingency is critical because the owner cannot perform on the transaction without either the approval of the lender(s) or a cash out of pocket situation, which is usually not feasible. Once the owner has accepted the offer contingent on lender approval, the offer must be submitted to the lender with any other documentation required by the lender. This documentation varies from lender to lender. At this point the transaction is out of the control of the licensees and owner, who must wait on lender approval, counter offer or rejection. Due to the current number of foreclosures and short sales, this can take several months. Both the seller and buyer should be made aware, in advance, of this unknown time factor.
During this “lender approval” time period, the house should stay on the market, however licensees should be made aware of its contingent status.
The seller must be made aware that if the lender does agree to the short sale, there could be a deficiency judgment, credit consequences or the amount forgiven may be considered as income for tax purposes. Every seller should be advised to get professional advice from an attorney, certified public accountant and/or a tax consultant.
Always trying to improve the real estate statistics I present to you, I’ve decided to mine for a new stat – median sale price for the last 90 days. I will present this statistic along with the median sale price for the last month. See the table below for the actual numbers.
What are the benefits of looking at the median sale price for the last 90 days? First, it helps minimize some of the incredible variance that occurs in a small market like South Lake Tahoe. A few high priced sales can throw off the median sale price for a single month here in South Lake. This isn’t so true when looking at sales over a 90-day span. Second, the 90-day statistic centers on a date 45 days in the past. The commonly accepted monthly median sale price centers on a date 15 days in the past. Thus, we get three times more homes, which minimizes variance, and only lose a month when it comes to keeping our stats current. If you are yet to be convinced, look at the table below. For any given month, the median price for the last 90 days, more often than not, produces a better reflection of market conditions than the median price for the month.
For those of you who’ve been following my statistical reports, you’ll notice that I’m no longer calculating median sale price over the last year (a.k.a. 12-month moving median). The statistic just doesn’t make sense to me. It’s good for looking at real estate history; and this is only true if the reader knows the data centers on a date 6 months in the past. Presenting it as current information on a month-to-month basis, however, just doesn’t make any sense.
As for now, we’re still seeing a lot of homes in escrow. We’ve had 60-70 homes in escrow at any given time in the last 2-3 months (the numbers I took from STAoR for the months previous to this one are low somehow.) And we’re finally seeing an increase in homes sold, but it still should be higher. Look at the numbers in 2005 when the market was at its peak. About 65% of escrows closed at that time. Right now we’re seeing about half close. I know a knowledgeable real estate professional who suggested that perhaps we have a bunch of really long escrows sitting out there. This would keep many of our escrows from closing. This isn’t the case, however. When I looked through South Lake Tahoe’s escrows a week ago, only 14 out of the 70 had been in escrow for more than 60 days. I think it’s just that a larger percentage of homes are falling out of escrow than we’ve seen in the past. With a tight lending industry, most buyers probably aren’t qualifying for loans. So if you’re a seller here in South Lake Tahoe, don’t be too upset about your home falling out of escrow. It’s happening to everybody.
I’ll do my best to bring you more statistics in the next week. I was only able to go back to the beginning of 2007 with the 90-day median sale price. I’d also like to give you some foreclosure, condo, and lot numbers. It’s just a very, very busy time for real estate here in South Lake Tahoe.
I know a lot of you searching the internet are curious about South Lake Tahoe foreclosures. I’ve decided to make things easy for you, and I’m just going to publish a foreclosure list every couple weeks. The latest list can be accessed at the foreclosure section of my blog.
Right now there are 8 foreclosures in South Lake Tahoe - 7 homes and one multi-plex. There are no condos in foreclosure.
The two latest foreclosures, 873 Stanford & 1612 Choctaw, are pretty good deals. 873 Stanford is especially well priced. For further information on these properties, call me at (530) 545-1831 or e-mail drew@southtahoehouses.com.
Seventy homes are in escrow here in South Lake Tahoe. It hasn’t been since September 2005 that we’ve seen that many homes pending. Over the last few years, a lot of people have been waiting for the right time to buy. It seems that many think that time is now. I’m really beginning to agree with them. Here are a few good reasons why it may be time to buy:
1. Interest Rates Will Go Up
Interest rates are low these days. They have no where to go but up and with inflation skyrocketing, the Federal Open Market Committee has a lot of incentive to raise rates. When this happens mortgage rates will increase, which means homebuyers’ dollars won’t go as far. Assume you can afford a $400,000 home with today’s rates. If interest rates increase by a single point, you’ll then be able to afford a $368,000 home. That single point will sap you of 8% of your buying power!
2. The Market Can’t Down Cycle Forever, Especially in Tahoe
The South Lake Tahoe housing market has seen a 25% correction since August 2005. Can prices really drop much further? I have no crystal ball, but we will eventually hit the bottom. With a limited supply of homes in the Lake Tahoe basin and an ever-increasing demand, we should hit bottom before many other areas.
3. It Is Better to Buy in a Buyer’s Market!
Those who are waiting for the market to hit rock bottom before buying are doing themselves a disservice. Buying a home isn’t only about getting the best deal possible. It’s about finding a home you can truly enjoy living in. With the number of homes on today’s market, you should be able to find what you want when it comes to location, condition, and quality. Finding that special home on tomorrow’s market could be much more difficult.
4. It’s a Home, Not a Stock
You’re buying something you will live in. Unlike a stock, bond, or commodity, your home will have utility. You’ll grow attached to it. And if you hold onto your home for a while, it’s pretty much guaranteed to increase in value.
I thought some of you might find this information interesting. The Tahoe Daily Tribune released information on South Tahoe area schools. Everything looks good to me except that Zephyr Cove’s middle school, Kingsbury Middle School, closed on June 9, 2008. Sixth graders will now go to Zephyr Cove Elementary. Seventh and eighth graders will go to Whittell High School, which is also in Zephyr Cove.
Parents Have Choice of South Shore Schools
Tahoe Daily Tribune, June 13, 2008
The Lake Tahoe Unified School District consists of four elementary schools, a middle school, a high school and a continuation school.
There are approximately 5,000 students in South Lake Tahoe and 200 teachers making the student to teacher ratio about 16 to 1. There are slightly more male students (53 percent) than female students. Fifty-five percent of students are white, 36 percent are hispanic, 6 percent are asian, 1 percent are black and 1 percent are native american.
District and school registration information can be found at www.ltusd.org or can be obtained by calling (530) 541-2850.
On the Nevada side of South Lake Tahoe, the Douglas County School District has an elementary school, middle school and high school all located near Zephyr Cove. For more information on Nevada schools visit dcsd.k12.nv.us or call (775) 782-5134.
There are also three private schools in South Lake Tahoe: St. Theresa, Tahoe Montessori House and The Walden School.
As predicted, the median sale price for single-family residences in South Lake Tahoe dropped dramatically in June, down to $365,000. The market is certainly suffering. However, I’m becoming skeptical of the statistical barometers we continue to rely upon. Perhaps the steep decline in median sale price doesn’t quite reflect what’s happened to home values here in South Lake Tahoe. Perhaps the decline in median sale price is due in large part to increased activity in the lower price bands. Given how tight the lending market has been with jumbo loans, this is a valid hypothesis. I’ll dig through some data in the next few days to see if I can find numbers to support.
The foreclosure market was active in June with 6 foreclosure escrows of the 37 homes that went into escrow for the month. There were also 3 short sale properties that went into escrow. As of today, there are 9 foreclosure single-family residences on the market.
Lot sales and condo sales were few and far between in June. Five condos sold and 4 went into escrow. Six lots sold and 5 went into escrow in June.
Activity has increased in the 1 to 2 million dollar price band. This price band has averaged 1.75 sales per month over the last year. However, 4 sold in June, and right now there are 5 homes in escrow that were listed between 1 and 2 million dollars.
