Lake Tahoe Real Estate – Market Report Dec 5-11

Olja Mihic, Lake Tahoe Realtor

2011 Weekly Real Estate Market Report – North Lake Tahoe-Truckee Region MLS – Residential Properties – Single Family Homes and Condominiums


Week of:  December 5th to December 11th


Lake Tahoe Real Estate Active Inventory Summary:

Lake Tahoe Real Estate Active Listings: The inventory for residential Lake Tahoe real estate has dropped to its lowest level of the year to 965 active listings in the market; 720 single family homes and 245 Lake Tahoe condominiums for sale.  Coldwell Banker has over 15% of the active listings in the market and continues to be the market leader for listings.


Lake Tahoe Foreclosures (REO)-Lake Tahoe Short Sale Listings: Of the active listings, there are 154 Lake Tahoe real estate listed as Lake Tahoe short sales, (16.0%) and 45 properties listed as Lake Tahoe Foreclosures (REO) sales, (4.7%).


Months of Inventory: Based on the current inventory and sales for the previous 30-day period, the market has roughly 8-months of inventory available.


Sales Summary:  Year-To-Date


Total Sales 2011 Vs 2010:

Total Sales:
For 2011, there have been 1,132 residential Lake Tahoe real estate sold in the market as compared to 1,067 for the same period in 2010 which is a year over year 6.1% increase in sales.  Of the total sales in the market for 2011, 893 have been single family homes, while 239 or 21% of the sales were Lake Tahoe condominiums.  I n 2010, condominiums represented 31% of the sales which is significantly higher than in 2011.


Lake Tahoe Foreclosures (REO) & Lake Tahoe Short Sales: Of the Lake Tahoe real estate sold this year, 198 have been Lake Tahoe foreclosures (REO’s), (17.5%), and 161 have been Lake Tahoe Short Sales, (14.2%) which results in over 31% of the Lake Tahoe real estate sold being distressed properties.  In 2010 for the same period, there were 203 Lake Tahoe foreclosures (REO) sales and 130 Lake Tahoe short sales or just over 31% of the total sales which is identical to this year.


Sales Price Range: For the year, there have been 744 residential Lake Tahoe real estate sold priced below $500,000, 291 Lake Tahoe real estate sold between $500,000 and $1,000,000 and 97 Lake Tahoe real estate sold over $1,000,000.


Median and Average Sales Prices: The median sales price for Lake Tahoe real estate sold year to date is $400,000 while the average sales price is $539,589. For the same period in 2010, the median sales price was $432,000 and the average sales price was $648,439 which is a (7.4%) and (16.8%) decline in price respectively year over year.


Last Week’s Sales: For the week of December 5th, a total of 32 Lake Tahoe real estate sold which was up slightly from the previous week’s sales of 30 Lake Tahoe properties.  Of the Lake Tahoe real estate sold last week, seven (7) of the Lake Tahoe real estate sold were priced over $750,000 and of those, three were sold over $1.0 million.

Pending Sales: Currently there are only 128 pending residential sales in the market which the lowest week for pending sales for the year.  Of the pending sales, 12 are Lake Tahoe short sales and 24 are Lake Tahoe foreclosures (REO) properties which are roughly 28% of the pending sales being distressed properties.

Market Activity Summary:


The first two weeks of December have been excellent in terms of closed sales with an average of 31 sales per week.  These sales volumes resemble the sales volumes in September and October which are typically the busiest sales months of the year.


Last week’s residential sales represented an increase from the week before with 32 total properties closing escrow.  Coldwell Banker continues to be the market leader in terms of units sold and sales volume with roughly 16.5% market share in the north Lake Tahoe and Truckee area.


Median sales prices have decreased from last year by 7.4% to $400,000 while the average Lake Tahoe real estate sales prices have decreased by 16.8% to $539,589.  The percentage drop in Lake Tahoe real estate sales has been rather consistent for the past 2-3 months and continues to be one of the driving factors influencing home sales on a year to date basis for astute investors looking to own a property in this remarkable resort area.


The hottest segment of the market continues to be homes priced under $500,000 as roughly 66% or 744 Lake Tahoe properties have sold in this price range.  In 2010, 59% or 635 properties sold in this price range which was lower than this year.  Certainly the price declines have influenced this trend.


Lake Tahoe Luxury homes sales, homes priced above $1,000,000, are down 24% from 2010 sales as 97 Lake Tahoe properties or 8.6% of sales have sold year to date as compared to 128 Lake Tahoe properties last year in this segment.  The median sales price of the Lake Tahoe luxury homes sold in 2011 is $1,580,000 which is down 2% from last year.  Conversely, the average sales price of the Lake Tahoe luxury homes sales this year is $2,000,844 which is 9% lower than last year.


The mid range market sales, $500,000 to $1,000,000 are down slightly from last year with 291 Lake Tahoe real estate sold or 25.7% of sales as compared to 304 Lake Tahoe real estate sold or 28.5% in this range in 2010.


Distressed properties, Lake Tahoe foreclosures (REO) and Lake Tahoe Short Sales represent just over 31% of the sales in the market which is identical to the quantity of Lake Tahoe foreclosures (REO) and Lake Tahoe Short sales sold in 2010. On a comparative basis, 31% of the sales are distressed properties while 20% of the active listings and 28% of the pending sales are distressed properties.

The active inventory of residential Lake Tahoe real estate is at its lowest point for the entire year to 965 residential properties.  This is not uncommon this time of year as homeowners take their homes off the market for the winter or place them on a ski lease program.


With the inventory of great residential Lake Tahoe real estate on the market, homes priced at 10-year lows and some of the lowest interest rates in history, savvy real estate investors are taking advantage of this market for a home in the Lake Tahoe – Truckee resort communities.


Now may be one of the best times for Buyers considering an investment in a vacation home or investment property in the Lake Tahoe-Truckee market.

Contact Olja Mihic, Lake Tahoe Realtor Today…For a Free Market Valuation

Note: Data on this page is based on information from the Tahoe Sierra Board of Realtors, MLS.  Due to MLS reporting methods and allowable reporting policy, this data is only informational and may not be completely accurate.  Therefore, Coldwell Banker Residential Brokerage does not guarantee the data’s accuracy.  Data maintained by the MLS may not reflect all real estate activity in the market.  DRE License # 00313415

Deed in Lieu of Foreclosure vs. Short Sale

Deed in Lieu of Foreclosure vs. Short Sale

Deed in Lieu (DIL) and short sale are the two alternatives to foreclosure, both of which are said to have a milder impact on credit. In the recent year short sales have become the most popular choice for sellers which are upside down on their mortgage. Recently, though,  the lenders in California have started offering Deed in Lieu of Foreclosure in areas where the real estate market is not as active and it is more challenging to sell a distressed property, or as an alternative to a short sale, so the sellers have started asking: “Deed in Lieu or Short Sale in California?” In most situations it is recommended that sellers explore either of these foreclosure alternatives before settling for a foreclosure. This blog is compiled from experiences of other people, and does not constitute legal advice. You should still always consult an attorney and a CPA to review your options.

What is a Short Sale?

Short sale is a process where a bank or banks agree to forgive part of the loan balance if a legitimate offer is received to sell the distressed property. If you have had a bad short sale experience, give it another go! The process is much more stream-lined now, and a lot of banks are hiring third party vendors to handle the pre-qualification process, as well as utilizing online tool, called Equator, for communication and tracking. In my experience, I was able to always get one of three bank negotiators, that were all familiar with the case, on the phone in less than a minute.

Short sales still do require a vigorous agent, though, willing to call the bank every other day, as persistence is the name of the game! You also need an agent that is good with problem solving, as more often than not, the short sale approval letters come back with unrealistic dates.

The process of short selling is the following:

  1. Find an agent that is good with problem solving, and handles short sales himself/herself (as you don’t want another party in an already complex process)
  2. List the property as you would if you were selling it normally. Commission most approved by the banks is 6%, though it is negotiable, and payable by the bank, so it doesn’t affect the seller much.
  3. Your agent will know how to price your property, but this is the most important part in the process, so make sure you are on target. Never price too high, then “work your way down”! Price below market to attract as many offers as possible, but make sure the buyer you accept is eager, as the bank may counter with a higher price, and always try to have a back up offer.
  4. Once an offer is received, the process begins! Your agent will enter it in online system along with the estimated HUD generated by the escrow company, then a negotiator will be assigned.
  5. The bank will then request a hardship statement and seller financial information, and conduct their own appraisal.
  6. It should take about 1-3 months to get a short sale approval letter, or a counter to the offer.
  7. The letter will specify, commissions, price, names, close of escrow, and any other conditions

In my experience, the average turn around time is around 1 1/2 months. One of the challenges I have seen is that you spend a long time waiting, and then nearly always the short sale approval letter will arrive with only couple of weeks to close. This is most often because the foreclosure date has been set and precedes the short sale date. Most banks are not postponing the foreclosure dates until 5 days prior to the date, which in turn means that you can’t get an extension to the short sale until very close to that date. You may need to accept the short sale with a short close date, then request extension, but be aware that they do not have to approve. Thus far, my experience has been positive with extensions.

Benefits of a Short Sale

In the markets where it is still possible to generate offers relatively quickly, it is a very good option. It is also good for sellers that need more time to move out of their homes. Another benefit is that the seller has more control over the process than in any other option. I believe that this is the cheapest option for the bank, as well, so there is some flexibility with how it is handled. In some cases sellers can get participation credit of up to $3000, so always ask!

Short sale are said to have a negative impact on your credit for only 2 years, though not verified. In California it is not possible for the bank to go after the seller for deficiency judgement on both purchase money, and recourse (i.e. re-fi, or home equities) loans. Banks are however required to file a 1099C, which would render the seller liable for the income taxes on the amount gifted by the bank. However the Mortgage Forgiveness Debt Relief Act provides tax relief for some loans between 2007 and 2012.

Benefits of Deed in Lieu

Deed in Lieu has just gained traction. There are areas where the markets are not as hot as in Lake Tahoe, or there have been several failed attempts at short sales, so the lender will offer Deed in Lieu instead. It is unlikely that DIL will work with multiple liens on the property. If you are offered a Deed in Lieu and have multiple liens on the property, make sure the lender is aware, and still OK to proceed. The benefit is that it is faster than a short sale, so if you are looking to get out fast, this is an option.

The credit impact, per CAR Legal Hotline, is the same on Fannie Mae’s creditworthiness checklist, as it is for short sales. I believe in California the bank still can’t go after the deficiency judgement, though you need to get an attorney to review your docs before you sign. You also have to make sure that the bank absolves you of all debt, and have a promise that they will stop all foreclosure proceedings. Same Mortgage Forgiveness Debt Relief Act applies to Deed in Lieu.

Should I Do a Short Sale or Deed in Lieu?

If you are looking to get out fast and have one lien on the property, DIL may be a very good option. Problem is, it is still fairly new in the new edition, and there are kinks to be ironed out. There are still no reports on the success rate, nor how long it truly takes. You will deal with DIL on your own, including managing the foreclosure dates, and more than likely will need to pay for an attorney and CPA for help. Other than that it has very similar effect as a short sale. You may be missing out on the buyers if it doesn’t work by opting out for DIL, though.

Short sales are handled by real estate professionals, and you will have guidance throughout. You may also get money from the bank for participating. You do not have to pay for anything in short sale, so the end result is very similar to DIL, but you have free guidance, and don’t have to do work yourself. Problem is they take longer, and buyers may walk. If there is a back up offer, you do not need to start the process from scratch, though.