Housing Market Update

When considering LakeTahoe and surrounding areas, evidence indicates positive changes and new options for homebuyers. The market has presented a fantastic window of opportunity to make that next home purchase. We can look positively toward the real estate market future, but be cognizant not to repeat crucial mistakes. The following factors and their potential impact should be kept in mind when considering the future of the market:

FORECLOSURES – The national percentage of foreclosures is down 25% (according to CoreLogic) from a year ago. For example, foreclosures went from 65,000 in July 2012 to 49,000 foreclosures in July 2013. However, foreclosures averaged 21,000 per month from 2000-2006. The market has seen a vast improvement, but we can’t forget where it’s been.

INVESTORS – Much of the real estate recovery can be attributed to homes purchased by investors. They purchased millions of short sale and foreclosed homes and provided much needed rentals, but it simultaneously created a difficult market for first-time buyers. Despite improvements in the market, some of those very improvements have created competition, so be prepared.

MORTGAGE FUNDING – The availability of mortgage funding is still highly accessible and the cost is considerably low. Most interest rates are below 6%, but the market wouldn’t have anticipated that a decade ago. The interest rate spread between conforming and jumbo loans has diminished to about 1/8 percent from 0.5 percent – 1.0 percent. Potential homebuyers should keep an eye on interest rate trends and choose financing most suitable for their own unique circumstances.

NEW DEMANDS FOR HOUSING – Homeowners are resurfacing with desires for housing and lifestyle changes due to the renewed market. Homeowners are again able to sell and walk away with equity to invest into their new home purchase. New demographics entering the market include homeowners looking to downsize, seniors seeking alternatives for homes, marriages and co-habitation, expanding families, and new needs and wants. Homebuyers should ensure their next purchase falls in line with their future financial plan as well as their desired lifestyle.

As the housing market improves, it is important that we remember the valuable lessons learned from housing crisis. For more information about Lake Tahoe real estate or to find a local expert, visit www.sierrasothebysrealty.com.

Pictured above: 10375 Northwoods Blvd