>The last 12 months have been very difficult for the Lake Tahoe/Truckee economy as job losses have been piling up, the dollar has weakened, and there have been a record numbers of distressed home sales. If you have been trying to sell your home you know that buyers rule the marketplace and homes that are not priced well are not selling. Buyers have been taking advantage of these conditions and are quick to snap up well priced real estate even with the threat of home prices continuing to fall. Buyers are taking advantage of the current low interest rates, high levels of inventory, and motivated sellers. The bottom line is that if you home is priced well in the market it’s going to sell, if its priced at or above the market you’re going to have issues just getting people to walk though the door let alone get offers.
Year over Year Analysis of the Truckee Marketplace(Single Family Residential)
Average Price: down 14.9% from $772K to $656.5K
Median Price: down 14.6% from $615K to $525K
Number of Sales: up 10.5% from 418 units to 467 units
Average Days on Market: down 3.25% from 123 days to 119 days
You will notice that even with all the doom in gloom in the news media we have seen a 10.5% jump in SFR home sales in the Truckee marketplace. This shows that Truckee continues to be a very desirable area to own real estate and that there are buyers out there looking for quality properties that are priced at or below the market. The average days on market are down slightly, which shows that demand for Truckee homes remains strong and that buyers are finding homes that meet their needs a little quicker than in the previous 12 months. I would be more nervous about the real estate market given year over year pricing if the days on market were rising and the number of sales were falling. With shorter marketing times and increased sales we are seeing a reduction in inventory helping to strengthen the local real estate markets. As more distressed properties sell we are going to have a better chance of seeing stabilization in the market.
If you were to look at the current market for distressed properties(SFR) you would see that in the last 12 months there have been 104 sales of distressed properties which is 8.7% higher than the current number of distressed listings(includes active, pending, and contingent listings). Currently there are only 36 active listings for short sales and REO properties with an additional 59 short sale/REO listings that are either contingent listings(waiting for bank approval or other contingencies) or pending sales(in contract). This is great news for the Truckee market as fewer distressed properties allow the marketplace to function more regularly.
In 2009 we also were blessed with $8,000 first time buyer Federal tax credit. This initiative allowed first time buyers and those who have not owned real estate in 3 years to receive a $8K tax credit for purchasing a home. This credit was scheduled to end in November 2009 but has been extended and expanded until the end of April 2010. The new program will allow current homeowners that have owned for the last 5 years to upgrade and receive a $6,500 credit. These are great incentives for first time buyers and now current owners, especially going into the slow selling season. The $8K tax credit has helped the real estate industry significantly and has helped many that work in this industry keep their jobs, making the credit a win win situation for buyers, real estate professional, and the towns that these properties are located in as new sales equal increased revenue for the area where the homes are located. I am hopeful that the extension and expansion of the tax credit will help create some stabilization in the market.
In 2010 we will most likely have low interest rates for at least the first half of the year, tax incentives for buyers, fewer distressed properties on the market, and hopefully we will have a stronger market by this time next year. Only time will tell but it appears that the Truckee real estate markets are poised for a better year in 2010.
2010 Wish List
1) Job creation, people with jobs and job security can buy homes or afford to keep their homes
2) Interest rates to remain low, this will help more people afford to buy homes or refi their current homes
3) Reduce Inflation, might be hard to do with low interest rates and high government spending
4) Lots of snow, when there’s snow in the hills people ski/board and spend money in our town
5) Charity, when more people donate/contribute to charity our society becomes stronger, donate in 2010
To search all listings in Truckee and North Lake Tahoe use this link: http://westallrealestate.com/Tahoe-Truckee-MLS-Listings.shtml
Best regards, Dave Westall