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Tahoe Real Estate: Nowhere to Go But Up

Million-dollar sales, cash buyers drive sales volume
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FHA Loans
3.5% down payment; monthly mortgage insurance premiums; Some lenders charge an extra origination fee.
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USDA
No-money-down mortgage loans for qualified rural areas, including much of eastern Nevada and Placer counties.
These loans are available directly from the USDA with interest rates based on income, or through qualified lenders and mortgage brokers. For guidelines, (530) 272-5395, or go here

Nevada County
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Placer County
Offers down payment assistance loans of up to $100,000. For income limits and qualifications, call (530) 745-3170 or go here

Town Of Truckee
First-time homebuyer loans of up to $90,000 in down payment assistance, depending on income. For qualifications, visit here
 

Real estate experts are saying the Tahoe housing market has hit the bottom of the trough and has nowhere to go but up, as evidenced by unusually strong first quarter results.

“This is the strongest first three months I have seen in six or seven years,” said Sue Lowe, senior vice president for Chase International. “It’s been a weird couple of years, and I didn’t expect it to recover this quickly.”

Around the lake, the total dollar value of homes sold rose 61 percent for the first three months of 2013, primarily due to an increase in demand for homes priced at more than $1 million, Chase reported.

By the end of March, 264 single-family homes had sold in lakeside communities, compared to 252 this time last year. That’s not a huge increase in terms of houses sold, but 49 of those homes were priced over $1 million, more than double the number of million-dollar homes that sold this time last year.

Truckee saw a 32 percent increase in the dollar amount of homes sold, with the median price of a single family home rising by $91,000 over this time last year. The bulk of the sales in Truckee this year so far (115 out of the 137 homes sold), were priced below $1 million.

But the inventory of affordable homes is shrinking throughout the lake, and Lowe predicts that will help drive new construction in the Truckee market because most of the lakeside communities have been built out and remain tightly controlled by the Tahoe Regional Planning Agency, which oversees new development.

That’s a fact that has not escaped the attention of folks at the Contractor’s Association of Tahoe Truckee (CATT), which recently assembled a group of real estate and lending pros to share the good news with movers and shakers at a breakfast sponsored by the Truckee Donner Chamber of Commerce.

One only need look as far as building permits to get a sense of how hard contractors have been hit by the downturn of the past several years. A decade ago, in 2003, Truckee approved 299 permits for new houses, said Pat Davison, CATT’s executive director. This year so far, there have been three.

“I can remember 200 homes being available in Tahoe Donner, and you would find beautiful homes in the $200,000 range,” said Greg Parker, a realtor with Coldwell Banker who was among the presenters at the April 9 meeting. Today, he says, only 46 Tahoe Donner homes are on the market.

In 25 years, Parker says he cannot remember ever seeing such a dramatic loss of equity in Tahoe properties, especially in the higher-priced properties. On average, he said, Tahoe properties have lost 35 to 40 percent of value during the past several years.

That’s not bad when compared to areas like Sacramento, which saw a 60 percent decline in value, but that also makes cities like Sacramento an attractive buy to bargain hunters, and reports suggest that the region’s inventory is at an all-time low.

In Tahoe, the deals are also getting harder to find, he said. Short sales and bank-owned properties represented 46 percent of the local market early last year. Today, there are only 15 listed.

“It’s one of those rare times where you can argue that it’s both a buyer’s market and a seller’s market,” he said. “But it’s hard to keep everybody happy.”

Sensing the market has hit bottom, investors are scooping up houses priced below $500,000, often with cash offers, realtors said. If the price is right, it’s not uncommon to see houses receiving multiple offers.

While there are still some bargains out there that would be affordable to first-time homebuyers, the competition has made it difficult for them to compete. Historically low interest rates are fueling the uptick in sales, and Kim Bennett of O’Dette Mortgage advises first-time homebuyers (or those with low down payments) to pre-qualify before they go shopping.

“The days of stated income are gone,” Bennett said. Thanks to a highly regulated lending market, the process of qualifying for a home mortgage can be terribly “invasive,” she said. But with interest rates as low as 3.75 percent, a $400,000 mortgage costs little more than $2,000 a month, including taxes and insurance.
Rural lending incentives, which apply to most of Truckee and other areas around Tahoe, offer no-money-down loans for qualifying buyers. Various incentive programs also offer down payment help for first-time buyers and other assistance.

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Reader comments so far...

snowowl
So inventory is being kept off the market by the banks, inventory is constrained, prices are up. Sounds like bubble 2.0 in the making. Are salaries rising at the same rate.....? Don't worry though, no cash, no problem...uncle sam can help you buy a house you can't afford and history can repeat itself. If you need to know anything else just ask a realtor. Now is the time to buy for sure, just like last year...oh and the year before that...in fact, just like 2005!

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October 11, 2018