The South Tahoe Realty Blog

The following article about South Lake Tahoe weather was published in the Tahoe Daily Tribune earlier this month. It provides valuable information on the kind of weather to expect when visiting South Lake Tahoe. Basically, come expecting anything!

For homeowners starting projects, be aware that it will likely snow sometime in October. Last September, we saw some snow coupled with 19 degree temperatures!

Weathering the Storms on Tahoe’s South Shore
Tahoe Daily Tribune, June 6, 2008

Snow has been recorded during every month of the year in South Lake Tahoe, but cold temperatures and precipitation during the summer are not the norm.

Generally summers on the south shore are mild with temperatures averaging 80 degrees. Due to the city’s elevation, the temperature is lower than the national average throughout the year. Precipitation is usually less than an inch during June, July and August.

The sun shines an average of 274 days a year making conditions perfect for outdoor recreation in both the summer and the winter.

At Lake level an average of 125 inches of snow falls per year. Heavenly Mountain snowfall averages 300 to 500 inches per year at alpine skiing elevations. Despite having to shovel their driveways, South Lake Tahoe residents enjoy the winter just as much as the summer.

With Independence Day one week away, I want to discuss South Lake Tahoe’s 4th of July experience. IT IS INCREDIBLE. Our fireworks display, Lights on the Lake, is rated amongst the top in the nation by many. Seeking tourists, Tahoe casinos invest a ton of money into the pyrotechnics. Here are a few reviews I found on the internet:

MSNBC.com – Top 6 in the U.S.
American Pyrotechnics Association - #4 in the U.S.
FireworksGuide.com - #9 in the U.S.

The fireworks, however, aren’t the only reason why our July 4th is so special. The atmosphere is festive wherever you go, whether it’s Nevada Beach, Regan Beach, Baldwin Beach, the Tahoe Queen, M.S. Dixie, or even your own boat. Firework displays begin on the north side of the lake in Truckee and Incline Village. They can be seen from the south shore and provide a good appetizer for the fireworks to come. After these shows finish, the lights of hundreds (perhaps thousands?) of boats can be seen traversing the lake for the south shore show. Before it begins, lights scatter the south side of Lake Tahoe and its surrounding shore. The fireworks spectacular is outstanding. Tune your radio to KRLT-FM 93.9 or KOWL-AM 1490 to hear a music broadcast synced with the fireworks. After thirty minutes, there will be a grand finale. Stick around afterward to see all the lights on the lake disperse to their various marinas, piers, and launches.

South Lake Tahoe has the best 4th of July I’ve ever experienced. There’s good reason it’s ranked amongst the top in the nation! When you can, I highly recommend you experience it for yourself.

Here’s an article about South Lake Tahoe’s high cost of living from the Tahoe Daily Tribune. As a Tahoe local, I can attest that life ain’t cheap in South Lake Tahoe. However, there are ways to combat the area’s high cost of living. If you’re coming from Sacramento or the Bay Area, stop for gas at the 76 right after Placerville. It’ll be on the left. You’ll pay about fifteen cents less per gallon. I do my best to fill up in Carson City where prices are about fifty cents cheaper per gallon. I also shop in Carson or Reno whenever I can. I’m guessing I save 30%-40% on groceries and household items at places like Winco, Wal-mart, and Costco. A 30%-40% savings means I pay 43%-67% more whenever I shop in South Lake. Aye caramba!

Taking these money saving measures, as well as shopping online, makes Tahoe’s high cost of living easier to bear. The lake, mountains, and fresh air make things a little easier too!

Cost of Living is Still Rising in South Lake
Tahoe Daily Tribune, June 6, 2008

The cost of living is rising around the country and South Lake Tahoe is no exception. Living in the mountains makes many goods and services more expensive. Gasoline is typically 20-30 cents more per gallon than it is in California’s Central Valley.

Rent in South Lake Tahoe can range from $600 per month for a one bedroom, one bath apartment to $3,000 per month for a four bedroom house with views. Energy and propane bills can be expensive in the winter and snow removal costs are the homeowner or renter’s responsibility.

Many people say Lake Tahoe’s natural beauty makes up for the higher cost of living. After all, one look at the sun setting over the lake is priceless.

After some of the statistical revelation I experienced over the last week, it’s become much easier to make conclusions on this market that can be validated with empirical evidence.

The median sale price for single family residences increased 9.5%, from $379,000 in April to $415,000 in May. Unfortunately, this is not evidence of a market turnaround. Most of the buyers who acquired property in May were simply higher priced buyers. Of the homes sold so far in June, nothing has closed above $350,000.

Prices in South Lake Tahoe will continue to drop. Look to see around twenty foreclosures hit the market this summer and even more later this year. The foreclosures are being priced very low, and they continue to force sellers to lower their prices to compete. There were sixty price reductions in the MLS over the last two weeks. We’ll see hundreds more over the summer.

A piece of positive news is that buyer activity is increasing. We saw more homes go into escrow last spring than in the spring of 2007. Right now, there are sixty-four homes in escrow. We haven’t seen that many escrows at one time since October 2005! The bottom of this market may be in sight.

The South Tahoe Association of Realtors (STAoR) staff went to a C.A.R. conference last week. Thus, they didn’t publish May market statistics until today. Honestly, I got impatient a few days ago and started mining our MLS for data. I had no idea what I was in for!

Two days, six phone calls, and five hours of data mining later, I have just a few nuggets for you. I’ll give you the biggest nugget first: The monthly median sold price that STAoR presents to us isn’t actually the median for that specific month. It is the median for the past twelve months. To clarify, STAoR gave us a median sales price of $428,000 for April 2008. I searched our MLS and found the following:

Median sales price for homes sold 4/1/08 to 4/30/08 - $379,000
Median sales price for homes sold 4/30/07 to 4/30/08 - $428,000

In fact, here’s a good bit of the data that I overturned:

Before I continue, I’ll relay a couple things told to me by STAoR staff over the last two days. First, they are not the only ones who present data in this manner. They say that many boards in small markets do the same thing. There is good reason for this. It smoothes data and eliminates variance. With few homes being sold monthly in small markets like South Lake Tahoe, there can be spikes or depressions in the data that don’t accurately reflect the market. For instance, let’s say sixteen homes will be sold in June 2008 (extremely unlikely, but it happened in January and February). If nine of these homes are closed at over one million dollars, the median will be over one million, which is more than double the actual median value of South Lake Tahoe homes. STAoR eliminates variance by incorporating a larger data set.

They aren’t truly presenting a median sales price, however. Their statistic is more like the 50-day moving average that stock market analysts use. In fact, I call their stat a 12-month moving median. There are two problems with it: 1) It does not reflect what actually happened in a month; and 2) its data centers on a date half a year in the past. Check out the table. The 12-month moving median peaks in March and April of 2006. However, the market really peaked seven months earlier in August 2005. If someone was basing a decision to sell a few years ago on this set of data, they would have been seven months late and more than a few dollars short! In the same breath, when the market bottoms out, the 12-month moving median won’t reflect this until half a year later. It is in cases like this that the actual median is much more helpful in decision making.

I’ll be posting more reflections on my data mining in the next few days.

Tahoe Keys Waterfront Home  Sqft: 3012 Beds: 3  Baths: 2.5  Price: $1,295,000 With a boat dock that can accommodate three boats and a 6-person spa on the rooftop deck, this is a luxury deal! >Click for more info	2003 Christmas Valley Deal  Sqft: 2286  Beds: 3 Baths: 2.5 Price: $525,750 This foreclosure has seen seven price reductions in 2 1/2 months. Make an offer and see what sticks. >Click for more info
Foreclosure Steal! Sqft: 1432 Beds: 3 Baths: 2 Price: $254,900 This foreclosure in Sierra Tract has many upgrades. The bank is offering to pay 3% toward owner occupied closing costs. >Click for more info	Tahoe Keys Foreclosure  Sqft: 1712  Beds: 3 Baths: 2 Price: $399,000 A home hasn’t sold in the Keys below $400,000 since September 2003 … and that home had only 1271 square feet of living area! >Click for more info
Motivated Seller  Sqft: 2500 Beds: 4  Baths: 3  Price: $640,000 This is a very unique & exquisite home in prestigious Highland Woods. The seller is very motivated. >Click for more info	Beautiful Knotty-Pine Remodel  Sqft: 1350 Beds: 3 Baths: 1.75 Price: $338,000 This is the perfect vacation cabin or rental. The owner has forty years of woodworking experience and did the remodel himself. >Click for more info

For further information on these and other South Lake Tahoe Best Buys, call Drew Kondo at (530) 545-1831.

Sorry this is coming late folks!  Achilles tendon surgery, amongst other even bigger things, has kept me tied up in the last couple of weeks.

Here are the latest statistics from the South Tahoe Association of Realtors.  This data is from April 30, 2008.  The median home price in South Lake Tahoe rose 0.7% from last month ($425,000 to $428,000).  The market, however, is still in a decline.  Median home price has dropped over the past year by 8% ($465,150 to $428,000).  The best explanation for the increase in median price from last month has been the increase in foreclosure listings in the higher price bands.  I blogged on this very topic on March 31st in the posting Foreclosures in South Lake Tahoe.  I expect a decline in median home price next month due to this foreclosure-driven, downcycling market.

Number of Listings by Price Range

My real estate agency, Chase International, has recently unveiled a new website at ChaseNation.com.  ChaseNation is a social networking site like Facebook or MySpace.  However, ChaseNation is geared toward Reno-Tahoe real estate.  In fact, it is the first ever agency specific social networking site.  I invite you to check it out at:

www.ChaseNation.com

When showing property, I’m often asked the question, “What will my monthly payment be on this house?”

The answer many people give is simply the amount owed on the home each month, which is often called PI – principle and interest. On a $400,000 home, this would be about $1,920 (assuming 20% down and a 6% interest rate).

However, PI does not completely account for the cost of homeownership. There are other reoccurring costs. Those with a little real estate savvy often use the term PITI. It stands for Principle, Interest, Taxes, and Insurance. In addition to PI, it accounts for the cost of property taxes and homeowner’s insurance. This presents a much better picture of what owning a home will cost.

On our $400,000 home in Tahoe (mentioned above), we can expect to pay about $400 a month in property taxes. Insurance will cost around $100. I also like to account for the cost of water, sewer, and trash, which will be about $120. Add this to our $1,920 mortgage, and we’re paying $2,540 per month. Thus, PITI and water/sewer/trash accounted for an additional $620 of expenses above and beyond payments on the house.

Before getting to the nitty-gritty, I want to mention that every homebuyer should account for tax write-offs. The interest you pay on your property can be written off at tax time. This tax break can be VERY significant.

So in answer to the question, “What will my monthly payment be on this house?” I’ve created the following table to provide an answer to almost anyone shopping in Tahoe.

* Interest on 20% down loan = 6%. Interest on 10% down loan is calculated at an additional 0.5% for PMI. Property taxes = 1.2%. Insurance = 0.3%. Water/sewer/trash = $120.

Right Next to Heavenly Sqft: 3200 Beds: 5 Baths: 3 Price: $895,000 >Click for more info	Between Unbuildable Lots! Sqft: 1680 Beds: 3 Baths: 2 Price: $369,000 >Click for more info
Foreclosure Steal! Sqft: 1432 Beds: 3 Baths: 2 Price: $225,000 >Click for more info	Brand New Construction Sqft: 2032 Beds: 3 Baths: 2 Price: $489,000 >Click for more info
Tahoe Keys Waterfront Sqft: 2070 Beds: 3 Baths: 2 Price: $829,000 >Click for more info	Tahoe Island Park w/Upgrades Sqft: 1353 Beds: 3 Baths: 1.75 Price: $388,900 >Click for more info

For further information on these and other South Lake Tahoe Best Buys, call Drew Kondo at (530) 545-1831.