Changes are afoot, and I am not just referring to the several feet of snow that fell before Halloween.

If you look down your street, the odds are you’re seeing fewer “For Sale” signs lately. Inventory is shrinking in the Tahoe/Truckee region, and as a result, prices have been inching up. This is a welcome sign after years of blindly feeling around for the bottom and realizing that we are still in a free fall.

Home prices have increased by 4.6 percent in August 2012 compared to August 2011, representing the biggest increase since July 2006. Sales have been particularly strong in California, which led the nation in flipped homes this year. Flipping, the process of buying, fixing up, and reselling quickly, is a strong indicator of a rebounding market. Some analysts are projecting a 10 percent increase in California home values by year’s end, compared to 2011.

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We are seeing this in our local Tahoe/Truckee market, as well. There are more buyers entering the market, and there are fewer houses to buy. This is helping chew up the distressed inventory. A smaller inventory, combined with an increased interest in the market, is serving to boost our home values.

Some regions of the Bay Area, such as Marin County and the South Bay, have been seeing multiple offers for properties and very short days on the market. Our market tends to follow suit behind the Bay Area, since the region is our biggest demographic of homebuyers. Locally in recent months, when a home comes on the market at a good price, particularly at our “entry-level” price point of up to $350,000, by the time I look at the property, tell a client about it, and write an offer, there are several offers already on the table — as many as eight or nine if it is a smoking new listing, which usually sells over asking price. This is a different market than in the years of the post-bubble burst.

Local distressed properties are also mirroring the national trend of faster sales and fewer days on the market. Banks are finally helping to expedite the short sale process in a more reasonable timeline than in recent years. In our local market this year, sold short sale properties have gone up by 19 percent, as compared to 2011. Conversely, bank-owned properties closed in 2012 have dropped by 4 percent. Overall, distressed property sales (bank-owned and short sales) represent more than 30 percent of the sales in 2012, down 2 percent from 2011.

What does this all mean? More short sales are successfully selling instead of converting to foreclosures and then selling, thus foreclosure rates are dropping. A drop in distressed inventory illustrates a return to a healthier market. While it will not be a skyrocketing recovery, these indicators show that we are finally turning the corner toward a more stable real estate market.
Another sign that the real estate market is rebounding is new home construction, which is on the rise once again across the country. Residential building was up 29 percent in August compared to last year, according to the U.S. Census Bureau. Locally, building is on the rise as well. So far this year, the Town of Truckee issued its highest level of residential building permits since 2008. Areas like Martis Camp are going gangbusters with new construction, supplying many jobs to designers, local builders, and trades people. This is a welcome change for our community, putting many folks back to work. In the past six years, as building took a sharp nose dive, more than a few builders I know were forced into a career change, worked multiple jobs, or moved out of town altogether.

As I embark upon my own building project, I have been talking to local builders and am surprised to hear how many of them are busy through next year. In 2012 thus far, more than 30 percent more lots have been sold locally in our Multiple Listing Service than in the same time last year. More lots sold equates to more future building. This is good for the local economy, but tough for me as I am realizing that not all builders are as available as they once were.

Building a home is an investment in the community, so it is a great sign that many are beginning construction in the area again. And it’s not all in Martis Camp. The seven-lot subdivision above downtown Truckee where I am building has not had any homes built since it was created in 2005. Now, two new homes are going in this spring, and one is in the process of breaking ground.

My own building process is slow going. This is to be expected. It is a process that cannot be rushed if you want to do it correctly. When a building project is hurried, it ends up costing time and money, two common setbacks that we are trying to avoid by doing our homework and proceeding carefully. Sometimes, however, you have to go with your gut. All my research has told me to get at least three bids for designers, but ultimately we chose an architect with whom we connected from the start. And we have a design that is exactly what we were aiming for. The most important thing I have learned thus far is that working with someone with whom you can both communicate and relate can not only make the process seamless, but also save you money in the long run.

Although we are not very far along (we haven’t even hired a builder, let alone broken ground), it has been an enlightening process. There is something very hopeful about starting from scratch, looking at what is now a blank canvas with trees and a big boulder on it, and envisioning a space that we will call home. With the recent trend in the area of more building permits being issued, combined with sales and prices on the rise and another drop in interest rates, it seems that there is no time like the present to buy in the Tahoe/Truckee real estate market.

~ Maura Mack is a Realtor with Coldwell Banker in Truckee. Contact her at maura@mauramack.com or (530) 582-9775. Comment on this column below.

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