Now May Be Best Time To Buy A House In Two Decades
Purchasing a home may be more affordable now than it has been in more than 20 years. Almost 78% of homes sold during the first quarter of 2012 were affordable to people earning the U.S. median income of $65,000, according to a report released Wednesday by the National Association of Home Builders and Wells Fargo. Home prices nationwide have fallen about 36% from their peak, while median income has risen by about 10%. At the same time, mortgage rates are below 4%. There is one catch for home buyers, however: mortgage availability. Lending conditions are still tight. Without this significant issue, the housing and economic recovery could be proceeding at a much stronger pace. Indianapolis was the most reasonably priced housing market in the U.S. In fact, 96% of all homes sold in the metro area could be easily afforded by the typical family, according to the report. Wages in Indianapolis are reasonably high with the median family income at $66,900, about $2,000 above the national median. Meanwhile, the median price for homes sold there during the first three months of 2012 was $102,000. Other major markets that ranked high on the most affordable list included Dayton, Ohio, where 94% of homes sold could be purchased by a typical family; Lakeland, Fla., with a 93% affordability score and Modesto, Calif. at 93%. In contrast, New York City’s housing market was ranked as quite expensive, where only 31% of homes sold were affordable to median income families, who earned $69,200. The median home price in the metro area was a whopping $400,000. Other least affordable large markets included San Francisco (40%), Honolulu (48%), and Los Angeles (50%).
Brian Sly and Company, Inc.
Registered Investment Advisor and Consulting Corporation
Please click on the below link to access the resort sales stats
Homes at Lake Tahoe are becoming more affordable for the first-time home buyer for the first time since 2001, but it’s unlikely to last long.
Homes in the lower-priced segment of the Tahoe market are in demand, a first-quarter existing homes sales report by Chase International shows.
“Lakewide, the units in single-family homes are up by 15 percent from the same time last year,” said Sue Lowe, senior vice president and corporate broker for Chase International. “We are just seeing little to no inventory in homes under $500,000 around most of the lake.”
Click this link to read the full article in the Reno Gazette Journal.
Making Home Affordable Programs – including HAMP, HAFA – Extended and Expanded through December 31, 2013.
The Treasury department recently released Supplemental Directive 12-02 officially extending the term of all Making Home Affordable programs – including Home Affordable Modification Program (HAMP), Home Affordable Foreclosure Alternatives Program (HAFA), the Unemployment Program (UP), and Second Lien Modification Program (2MP) through December 31, 2013. The program extensions come on the heels of the expansion and extension of the Home Affordable Refinance Program or HARP, also through December 31, 2013.
Luxury Housing Markets Heat Up
April 13, 2012
While many markets continue to languish with more price declines and so-so sales, one real estate sector is red hot, and you might be surprised at which one it is.
Even with the economy just starting to pull out of the doldrums, the luxury market has come roaring back in recent months according to experts, and that could signal good things ahead for U.S. real estate.
“There is very little inventory, which is driving a lot of activity,” says Richard Smith, president and CEO of Realogy Corp., a global provider of real estate and relocation services. “You’re getting multiple offers and quick sells. It’s not uncommon in New York City to see a co-op or an apartment go on the market and two days later it’s gotten 10 offers and it’s sold. That’s becoming pretty typical of New York City.”
Other high-end markets in Boston, Greenwich, Conn., the Hamptons, and Miami, Fla., are seeing increased activity as well, Smith says.
Even far from the hustle and bustle of major city centers, real estate watchers have seen luxury markets heat up. In Bozeman, Mont., ERA broker owner Robyn Erlenbush has already seen the same number of closings and pending sales three months into 2012 as she did halfway through 2011.
“There’s great energy in our market,” she says.
Why are buyers suddenly scooping up more high-value properties? Lack of selection does play a role, but sellers have also become savvier when it comes to pricing their properties. On the flip side, would-be buyers have become more realistic about prices as well, sensing that they aren’t likely to drop much farther.
“These are high-end buyers that have been sitting on the sidelines for long enough and pricing is not going to get any better,” Smith says. “These are people who are smart enough to know that you can’t really call the bottom of the market—you can get close, but if you miss it, prices start escalating pretty quickly.”
The uptick in buyers plunking down mega-bucks for mega-mansions could bode well for the broader market, Smith adds. While it’s not likely the average Joe looking to buy a $200,000 home in Columbus, Ohio, will take his cues from multimillionaires purchasing second homes in the Hamptons, it could give more credence to the idea that the housing market could be on the mend.
“If I’m in a market and I see the very high-end buyers grabbing the headlines, it tells me that people who are astute investors—when you’re buying a $30 million property, you’re probably pretty astute—think things are starting to improve,” Smith says. “Is there a bleed-over effect? Probably.”
Foreign buyers have given some luxury housing markets such as Miami a shot in the arm, Smith and other experts say, with healthy interest hailing from locales as diverse as Russia, China, Canada, and Brazil.
“We have an influx of Russians because it’s like their winter Riviera,” says Coldwell Banker Realtor Jill Eber, who specializes in luxury real estate, adding that current “bargain” prices have given foreign buyers incentive to move into the American housing market, especially popular vacation spots such as Miami.
Her colleague, Realtor Jill Hertzberg agrees. “Many of them are buying very big properties. You can’t buy a single-family home in the middle of Moscow on a gorgeous waterway,” she says.
And Hertzberg doesn’t think the resurgence of activity in the luxury market is a flash in the pan. “I think it’s going to sustain,” she says. “It’s definitely continuing.”
Media Contact: Katie Shaffer
Switchback PR + Marketing, Inc. 530-550-2252
For Immediate Release
Chase International Reports
Market Beginning to Rebound
~Significant Improvement seen in lower-segment of Tahoe market~
Zephyr Cove, Nev. (April 9, 2012) – First quarter home sales at Lake Tahoe show an improved market compared to last year’s numbers for the same period, according to a quarterly report released by Lake Tahoe-based real estate firm Chase International. One noticeable and positive statistic was an impressive 15 percent increase in units sold around the lake, with the lower end of the market jumping 18 percent.
“The inventory in the lower segment of the market is disappearing around the lake,” said Susan Lowe, corporate vice president for Chase International. “Even though the average and median price has gone down from the first quarter last year (which saw many lakefront sales during that 2011 period and which we have not seen this year), the market is showing signs of recovery because the supply is vanishing.”
The Chase International 2012 first quarter report also shows dips around the lake overall in regard to sales prices from one year ago, which is reflected by the median price of a home in Lake Tahoe which is now $317,000 and the average home price which is $623,645, down 25 percent and 31 percent respectively.
Truckeeis showing signs of recovery overall but especially for real estate sales over the $1 million mark. Specifically, theTruckeemarket stats report a whopping 175-percent increase in units sold over $1 million from four sales at this time last year, to a notable 11 sales this year.
The condominium market aroundLake Tahoeexperienced declines for all segments of the Tahoe market. The number of total condo units sold was down 18 percent. Average prices are down 35 percent and the median price is down 7 percent.
Headquartered in Lake Tahoe, Nevada since 1986, with eight offices in the region (Zephyr Cove, Glenbrook, Incline Village, Tahoe City, Squaw Valley, Truckee, South Lake Tahoe and Reno) and one in London, England, Chase International and its exclusive affiliations handles a large share of the country’s property. A recognized leader in the world of real estate, Chase International continues to grow. With 240 professional Realtors® boasting an array of industry certifications and the highest volume per sales agent in the area, Chase International successfully represents homes at all price levels. For more information about Chase International, visit www.chaseinternational.com.
Ultimate Proof I Believe NOW IS THE TIME TO BUY!
by Steve Harney on April 10, 2012
I truly believe that now is one of the greatest times in American history to buy a home whether it is a primary residence, a vacation home, or an investment. Cynics may believe I speak highly of the benefits of owning real estate simply because I am in the industry as a speaker and lecturer. I want to prove that I believe in the advice I have given to our readers.
Yesterday, my wife and I were absolutely thrilled to receive the mortgage commitment on the small condo we are buying in South Beach, Florida. We are looking forward to enjoying our winters in Miami in the future. We are also excited that the condo will be able to be passed down to our children and eventually their children; enhancing our lifestyle and building family wealth at the same time. That’s exciting!!
National Geographic hails Truckee as one of world’s best ski towns
TRUCKEE, Calif. — Truckee has found itself in good company sitting among the world’s best ski destinations, earning a distinguished accolade from the editors of National Geographic Adventure as one of the world’s top 25 ski towns.
The article, which was published this month, breaks down what constitutes a classic ski town. Truckee is celebrated as “an inviting mountain burg steeped in ski heritage, amenities, and culture.”
Truckee is heralded as being a relaxed town where locals live. Squaw Valley, famed for its extreme terrain, is referred to as Truckee’s “alpha mountain,” and calls out Northstar, Sugar Bowl, Tahoe Donner and Soda Springs reflecting the variety of terrain and opportunities nearby.
The article has some fun exploring what makes a place really tick by asking local luminaries for insider tips. Truckee’s own Daron Rahlves, four-time Olympian, 15-year member of the U.S. Ski Team stepped up to answer the journalist’s questions, recommending his picks of where to stay, play, and party.
Visit http://adventure.nationalgeographic.com/adventure/trips/best-ski-towns-photos/ and scroll along for Truckee.
“This article provides the reader with a sense of Truckee’s colorful history and authentic charm, and also makes it clear that we sit right in the midst of many world-class ski resorts,” said Lynn Saunders, president and CEO of the Truckee Donner Chamber of Commerce. “Truckee’s mountain culture and fun-loving lifestyle are a draw for people who live here, visit here, and for those who decide that they want to be part of our remarkable community, by moving here.”
Other ski towns making the elite list include Telluride, Colo.; Stowe, Vt.; Park City, Utah; Jackson, Wyo.; Ketchum, Idaho; Girdwood, Alaska; Chamonix, France; Zermatt, Switzerland; Niseko, Japan and Wanaka, New Zealand, among others. *******************************************************************************
Truckee is 40 miles from the Reno-Tahoe International Airport, two hours from Sacramento and three hours from San Francisco directly off Interstate 80. Contact the Truckee Donner Chamber of Commerce at 530-587-2757 or visit www.truckee.com for more information.
Photograph by Hank deVre, Squaw Valley
Best For: Families with aspiring ski or rider rock star kids; also, ski and rider rock stars
In the Sierra Nevada north of Lake Tahoe, between Reno and South Lake Tahoe, the old logging and railway town of Truckee has bloomed into a ski mecca, with no less than eight different ski areas within 15 miles. The first recorded ski lift in the U.S. was a Truckee steam-powered tobaggan lift in 1910, and the burg still maintains much of its Old West character, with wooden walkways in its historic downtown and a still active, clapboard train station (Amtrak service twice daily). Its population of 16,180 is growing fast, but the relaxed town has managed to eschew the glitz of the larger Tahoe resort scene. This is where the locals live.
With many of its ski areas receiving some of the highest average snowfall totals in the country—more than one ski area ran lifts on the Fourth of July this past year—it’s easy to understand why the locals choose to live here. Famed for its extreme terrain and appearances in countless ski movies, Squaw Valley is Truckee’s alpha mountain, with six distinct peaks, a superpipe, and plenty of bleached hair and mirrored goggles. It’s called “Squallywood” for a reason. A recent merger with neighboring Alpine Meadows, a family favorite, will, when connected, create the one of the country’s largest ski areas. Northstar, six miles southeast of town, is an intermediate’s paradise; Sugar Bowl has steeps that rival Squaw but with fewer crowds; Tahoe Donner, right in town, and nearby Soda Springs are perfect for beginners.
Ask a Local
Daron Rahlves—four-time Olympian, 15-year member of the U.S. Ski Team, and current Sugar Bowl ski ambassador—moved to Truckee with his family when he was 19 and is now raising his own children there. Here are his recommendations.
Budget: The historic Truckee Hotel
Swank: Resort at Squaw Creek is ski-in, ski-out at Squaw
Cheap: Tacos Jalisco, a classic taqueria
Gourmet: Cottonwood Restaurant and Bar, in a former ski lodge overlooking downtown
Best After-Ski Party Spot
Pastime Club is a happening dive bar.
Best Rest-Day Activity
Take a dogsled ride at Sugar Bowl or jump in Lake Tahoe.
Truckee’s Classic Ski Run
Rahlves’ Run at Sugar Bowl
Trinkie Watson and David Gemme, prominent real estate agents in the Lake Tahoe market, have rejoined the prestigious Haute Living Real Estate Network.
Trinkie Watson and David Gemme Rejoin the Exclusive Haute Living Real Estate Network
Thursday, March 8, 2012
Markets with largest percentage-based price declines in Q4 2011
NAR: 29 metros with double-digit percentage declines on a year-to-year basis
BY INMAN NEWS, FRIDAY, FEBRUARY 10, 2012.
Home prices falling image via Shutterstock.
The Boise City-Nampa, Idaho, metro area led the nation with a 20.2 percent drop in its single-family existing-home median home price in fourth-quarter 2011 compared to the same quarter in 2010, the National Association of Realtors reported this week.
Metros with double-digit percentage-based price declines (Q4 2011 vs. Q4 2010)
Rank U.S. metro % decline
1 Boise City-Nampa, Idaho -20.18%
2 Binghamton, N.Y. -19.44%
3 Allentown-Bethlehem-Easton, Pa.-N.J. -17.78%
4 Atlanta-Sandy Springs-Marietta, Ga. -17.03%
5 Springfield, Mo. -15.63%
6 Mobile, Ala. -15.08%
7 Edison, N.J. -14.92%
8 Rockford, Ill. -14.16%
9 Milwaukee-Waukesha-West Allis, Wis. -14.09%
10 Trenton-Ewing, N.J. -13.84%
11 Dover, Del. -13.30%
12 Akron, Ohio -13.20%
13 Norwich-New London, Conn. -12.22%
14 Pittsfield, Mass. -12.07%
15 Reno-Sparks, Nev. -12.05%
16 Beaumont-Port Arthur, Texas -11.82%
17 Gainesville, Fla. -11.58%
18 Deltona-Daytona Beach-Ormond Beach, Fla. -11.52%
19 Bridgeport-Stamford-Norwalk, Conn. -11.50%
20 Virginia Beach-Norfolk-Newport News, Va.-N.C. -11.46%
21 Chicago-Naperville-Joliet, Ill. -11.19%
22 Tallahassee, Fla. -11.13%
23 Gulfport-Biloxi, Miss. -11.08%
24 Tucson, Ariz. -10.59%
25 New Orleans-Metairie-Kenner, La. -10.51%
26 Providence-New Bedford-Fall River, R.I.-Mass. -10.26%
27 San Francisco-Oakland-Fremont, Calif. -10.23%
28 Phoenix-Mesa-Scottsdale, Ariz. -10.20%
29 Cleveland-Elyria-Mentor, Ohio -10.11%
Source: National Association of Realtors.
And 29 of 149 metros tracked in the quarterly price report experienced a double-digit percentage decline year over year in fourth-quarter 2011.
Three of 10 metros with the largest year-over-year price decline in the fourth quarter are in New Jersey, and one is in New York.
Metros with double-digit percentage-based price declines (Q4 2011 vs. Q3 2011)
Rank U.S. metro % decline
1 Bridgeport-Stamford-Norwalk, Conn. -20.64%
2 Trenton-Ewing, N.J. -16.72%
3 NY: Newark-Union, N.J.-Pa. -16.15%
4 South Bend-Mishawaka, Ind. -15.51%
5 Saint Louis, Mo.-Ill. -14.65%
6 Chicago-Naperville-Joliet, Ill. -12.47%
7 Peoria, Ill. -12.22%
8 Allentown-Bethlehem-Easton, Pa.-N.J. -11.71%
9 Champaign-Urbana, Ill. -11.68%
10 Boston-Cambridge-Quincy, Mass.-N.H. -11.61%
11 Cumberland, Md.-W.Va. -11.46%
12 Springfield, Mass. -11.14%
13 Atlanta-Sandy Springs-Marietta, Ga. -11.09%
14 New York-Wayne-White Plains, N.Y.-N.J. -10.84%
15 Birmingham-Hoover, Ala. -10.59%
16 Rockford, Ill. -10.53%
17 Pittsfield, Mass. -10.05%
18 Columbus, Ohio -10.04%
Source: National Association of Realtors.
Bridgeport-Stamford-Norwalk, Conn., had the largest quarterly price decline, NAR reported, falling 20.6 percent from third-quarter 2011 to fourth-quarter 2011.
Illinois and New Jersey accounted for Seven of 10 metros with the highest quarterly percent-based price drops from third-quarter 2011 to fourth-quarter 2011, and 18 markets experienced double-digit percentage declines on a quarter-to-quarter basis.
National Mortgage Settlement: What You Need To Know
by The KCM Crew on February 13, 2012
Last week, the Federal government and 49 state governments (Oklahoma being the exception) agreed to a $25 billion settlement regarding robo-signing and the challenges it created in the foreclosure process. We want to give a synopsis of the settlement and some perspective on what effect it will have on the housing market in 2012.
The $25 billion in funds will be dispersed as follows:
$17 Billion National Commitment to Foreclosure Relief Efforts
The servicers collectively agree to commit a minimum of $17 billion directly to borrowers through foreclosure relief effort options, including principal reduction for qualifying borrowers, short sales, anti-blight measures, and enhanced homeowner transition programs.
$3 Billion National Commitment to Underwater Mortgage Refinancing Program
The servicers collectively agree to commit $3 billion to refinance “underwater” homes (when a homeowner owes more on a mortgage than a home’s current market value). To qualify, borrowers must be current on their mortgage payments on a mortgage owned by one of the five banks.
$5 Billion Payment to States and Federal Government
The servicers’ $4.25 billion payment to the states includes $1.5 billion for payments to borrowers who lost their home to foreclosure by one of the five servicers…$750 million of the state-federal payment will go to the federal government to resolve federal claims.
For further details on the settlement you can go to the official website.
Will the Settlement Have a Major Impact on a Housing Recovery?
Probably not. Though it is a step in the right direction, it may be too little too late. Here are some opinions on the settlement:
IHS Global Insights
“Like many previous plans to stem foreclosures, this agreement will help at the edges. The problem is too big for it to have a large impact, however…This agreement will help the housing market move ahead in 2012 in a small way. But it is hardly a game changer.”
“While there is no doubt some benefit to formalizing and organizing the process of foreclosure and better monitoring of the process, the fact is that the settlement changes little.”
“While it is good that the settlement has been finalized and will offer principal reductions and refinancing schemes to borrowers, the bigger picture is that the settlement is not large enough to dramatically alter the outlook for the housing market or the wider economy.”
What about Foreclosures Moving Forward?
The settlement did bring clarity to one major issue – foreclosures. Banks have been holding off the foreclosure process on millions of homes over the last 18 months as they waited for the particulars of the settlement. They now know how they can move forward without penalty. The result will be an increase in foreclosures coming to the housing market.
“It will speed up processing, and perhaps mean that foreclosures that have been waiting around since robo-signing came to light in 2010 will now gain legitimacy.”
“It does appear the number of completed foreclosures will increase following this settlement – especially in some judicial states with large backlogs – so there will probably be more REOs (lender Real Estate Owned) for sale.”
“The $25 billion settlement with banks over foreclosure abuses may result in a wave of home seizures…Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes. With yesterday’s agreement, banks are likely to resume property seizures.”
“Mark Vitner, a senior economist at Wells Fargo Securities, said the settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled. Many lenders have refrained from foreclosing on homes as they awaited the settlement.”
What Happens When You Walk Away From Your Home?
It was just last summer that Charlotte Perkins made the hardest decision of her life as she and her husband Jim were caught in the vise of the housing bust.
Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they’d be lucky to get $200,000 for it.
They were carrying a loan of $260,000 on their original home alone, meaning they were well ‘underwater,’ owing much more than it was worth. Combined with the mortgage on the new house, their housing payments had become an “anchor around our necks,” she says, threatening to gobble up all their retirement savings and leave them with nothing.
The couple made a difficult call: They would do a ‘strategic default,’ and simply stop paying the old mortgage. “We really had to wrestle with it,” said Perkins, 60. “We had worked all of our lives to build good strong credit, and we’re proud people. But it came down to, ‘Can we keep doing this?’ We had to say ‘No.'”
As the housing bust drags on, many homeowners are thinking like Perkins. Almost 11 million homes are now underwater, says financial information provider CoreLogic. Around 3.5 million homeowners are behind in their payments and another 1.5 million homes are already in the foreclosure process, according to online marketplace RealtyTrac.
As banks start to work through their backlog of distressed properties, the New York Federal Reserve estimates that 3.6 million foreclosures will take place during the next couple of years.
So, the question is: Does it make sense to keep paying a massive mortgage, knowing that it might be decades before a home regains its prior value? Or is that akin to – as columnist James Surowiecki recently wrote in the New Yorker – “setting a pile of money on fire every month”?
“I constantly get the saddest e-mails from people saying, ‘I’ve exhausted all my life savings, my retirement is gone, and now I have to default,'” said Jon Maddux, CEO of YouWalkAway.com,
a foreclosure agency that helps clients with strategic default (and charges a fee for it). “But if they had seen the writing on the wall a couple of years earlier, stopped paying the mortgage and stayed in the home throughout the whole process, they would be in a much better financial position.”
There’s a moral component to that decision, of course. People naturally feel embarrassed about breaking a contract and not paying their bills; no one wants to be branded a deadbeat. But remember that companies default on their obligations when it makes financial sense for them to do so, via the bankruptcy process. Even the Mortgage Bankers Association itself, in a flourish of irony, arranged for a short sale of its Washington headquarters.
It’s not personal; it’s business. So think of strategic default as a business decision, and do a cold-eyed cost-benefit analysis of whether it makes sense for you, advises Carl Archer, an attorney with Maselli Warren in Princeton, New Jersey.
[Also see: Small Money Missteps That Can Cost You Big]
“People think it reflects on their integrity, and say ‘I wasn’t raised this way,'” said Archer. “But the more businesslike attitude is to say that there’s a contract, there are penalties for violating that contract, and sometimes it just makes financial sense to break it.”
The penalties largely revolve around your credit record, which admittedly gets blown up in the near-term. For a few years you can likely forget about qualifying for a mortgage or a car loan. When lenders are ready to take a chance on you again, you’ll have to pay for the privilege, with stiff interest rates due to your default history.
What Happens to Scores
Charlotte Perkins watched her credit score go from a pristine 800 to 685, dropping every time she missed a payment. Credit-scoring firm FICO estimates that someone with a 680 score would see that number sink between 85-100 points after a strategic default, and someone with 780 could crater 140-160 points.
Not desirable, of course, but not the end of the world either. For Perkins, for instance, she already had a loan on her Ford Escape, and the mortgage on her new house, before she even started the default process. She hasn’t seen any changes on her credit cards since, in terms of limits or interest rates.
Now that the previous home was auctioned off in December, she can start slowly rebuilding her credit, a process that should take about seven years.
Strategic default isn’t a decision to be taken lightly, of course. If everyone did it, the housing market — and the banks — would be in much worse shape than they already are.
The following are some of the issues to keep in mind:
1. Look to it as a last resort, not a first option. Your financial troubles could be alleviated with a simple refinancing, especially since 30-year mortgage rates are near record lows of below 4 percent. If the banks are hesitant to rework your loan, look into the number of government programs designed to keep you in your home, which can be researched at MakingHomeAffordable.gov.
2. Location, location, location. Each state has its own rules and regulations regarding foreclosures, which affect both the length of the process and what you could be liable for in the end. In so-called ‘non-recourse’ states like Arizona, California and Texas, a lender cannot come after you for any deficiency (for instance, if your mortgage was $300,000 and they’re only able to sell the property for $200,000). In other states they can pursue the difference, in theory – which is why some homeowners opt to file for bankruptcy, to free themselves from those potential obligations as well.
3. Use the interim to save like a demon. If you’re in a state like New York or Florida, which require a judicial review of every foreclosure, it might be a couple of years before you actually have to pack up. In the meantime, be extremely disciplined about stockpiling cash. That will help you with a down payment for a rental, to pay for a car in cash if you need to, or to clear up other debts you might have. “Save money as if you were still paying the mortgage,” says Archer. “If you don’t, then you’ll run out of both time and money, and then you’ll be in a real tough spot.”
4. Know the tax implications. Historically, if you have a debt that’s forgiven, the canceled amount is considered taxable by the IRS. In the wake of the housing bust, though, the Mortgage Forgiveness Debt Relief Act was drafted to spare you those taxes. That legislation expires at the end of 2012, though – so if it’s not extended, you could potentially face a tax bill for the difference.
5. Talk to a professional. A bankruptcy or real-estate attorney can help you through a very tricky process. The National Association of Consumer Bankruptcy Attorneys, for instance, has a searchable database of lawyers at www.nacba.org.
“Strategic default is not an easy decision, and there’s a cost either way,” said Gerri Detweiler, director of consumer education for Credit.com. “Would you rather be $200,000 underwater, or would you rather have seven years of damage to your credit report? It depends whether you’re finally at the point where enough is enough
By Chris Taylor | Reuters
You can’t compare gold to real estate as an investment as gold is a very liquid asset and it would take more time and effort to sell a house. We were not trying to make the case for real estate vs. gold as an investment in our blog. We were just showing that all investments go through cycles and that the best time to buy any investment may be when everyone is saying not to.
However, since the subject of comparing real estate to other investments has come up, let’s take a closer look. There are two major advantages to investing in a home of your own rather than another option:
You Can’t Live in Your IRA
When you buy your own home you are not taking available dollars away from another investment. You are replacing one housing expense (rent) which has no potential for a return on investment with another (mortgage payment) that does give you an opportunity for a return. We realize that there has been research showing that over the last 30 years renting has been less expensive than owning. That research also says that if you invested the entire difference between the rent payment and mortgage payment you may have done better financially. There are two challenges with this conclusion:
1. Today, in the vast majority of the country, renting is actually more expensive than owning a home.
2. History has proven that tenants DO NOT invest the difference in their rent and mortgage payments.
Today, study after study shows that owning a home is no more expensive than renting a home. However, even if this wasn’t the case, history shows that owning a home creates greater wealth.
Paying a mortgage creates what financial experts call ‘forced savings’. The Joint Center for Housing Studies at Harvard University released a study last year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:
“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”
There Are Tremendous Tax Advantages to Investing in a Home
There is no doubt that selling an investment such as gold is easier than selling your home. However, this liquidity comes at a price. The price is called capital gains. That is the tax you pay on any financial gain you receive from the investment. This tax doesn’t apply the same way when you sell your primary residence:
Theresa Palagonia, a CPA and the Accounting Manager for the firm G.S. Garritano & Associates, was good enough to explain the Home Sale Exclusion Rules:
“You may qualify to exclude from your income all or part of any gain from the sale of your main home.
You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true:
• You meet the ownership test.
• You meet the use test.
• During the 2 year period ending on the date of the sale, you did not exclude gain from the sale of another home.
If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions listed above.
You may be able to exclude up to $500,000 of the gain on the sale of your main home if you are married and file a joint return and meet the requirements. (Special rules apply for joint returns.)
Ownership and Use Tests
During the 5 year period ending on the date of the sale, you must have:
• Owned the home for at least 2 years, and
• Lived in the home as your main home for at least 2 years
Certain exceptions exist in which you may qualify for the exclusion without satisfying the tests listed.”
Every investment has pros and cons. That is why there is such an assortment of great opportunities. Real Estate has been, is and always will be one of those opportunities.
by The KCM Crew
Here are the 2011 year end stats for sold properties around Lake Tahoe.
Homesites at Squaw Creek was established in 1990 as a private exclusive community along the South side of Squaw Valley. There are 48 residential parcels, 12 of which front the Robert Trent Jones Jr. designed 18 hole golf course. This subdivision has ski area and mountain views. Resort at Squaw Creek amenities are available too. A great place to invest. There is currently only one property available in this subdivision.
Offered at $2,350,000
How To Be Top
As we enter a New Year Nick Churton of Mayfair international Realty takes a look at what may lie ahead for the real estate market.
Although mature real estate brokers and agents are apt to say that they have seen it all before, this time it is different. No one has seen this market under this set of national and international financial conditions before. But what is rather refreshing is that the uncertainty now cuts down the speculation aspect of a home purchase and strips the requirement to buy down to the real and age-old essentials. This makes for easier choices.
Le Corbusier, the pioneering architect, stated that, “The requirements for a house should be to provide a shelter against heat, cold, rain, thieves and the inquisitive”. He didn’t add that a home should also provide its owner with an investment return of seven per cent year-on-year.
For the first time since, perhaps, the 1960s property investment can take more of a back seat in the home buying mindset and, instead, fundamental life requirements can come back to the fore. Of course with other financial instruments providing so little in the way of return, real estate is a natural arena in which to invest. But with little or no indication about if or when the market will return in any zest we are left with simpler decisions and choices – does a home suit our requirements in size, location, style and price?
It is although our needs have been simplified in the way they may have been fifty years ago. With less frenzy and greater choice, for a while at least, this may be a very good time to choose a primary or secondary home for all the very best lifestyle reasons.
We quickly learn to expect that there is an investment opportunity to be gained from property purchase in a rising market. But we are rather slow to appreciate the reverse is likely in a poor market and/or in particularly adverse economic circumstances as we have now.
2011 was a hard year in property and this year may not be much better. We may have new US, Russian and French presidents, more ructions in Europe and the Middle East, and greater privations at home before we see greater improvement. But still there is a reassuring level of market activity that has more to do with need than discretion. This is the market we have and this is the market we have to deal with – and deal with it we will.
But real estate buyers and sellers should not be deterred. Indeed they should be encouraged as the more life there is in the real estate market the more life there is in the economy. But those still insisting on the sort of financial profit they may have achieved several years ago should perhaps think again and get real. It will be the enlightened that get to the top of the property class in 2012, not those in denial.
Hidden Lake Subdivision in Squaw Valley USA
Hidden Lake is a planned private gated community established in 1988. Enjoy views ofSquaw Valley ski area along with southern exposure. Community offers private roads, a spring fed “HiddenLake”, and 2 tennis courts. In the winter months the lake freezes due to being only 6-8 ft deep. HiddenLake has 35 parcels with two additional parcels annexed into the community. Currently there is only 1 active listing in the subdivision.
Creekside Estates Squaw Valley USA EST. 2004.
A private community. East end of Squaw ValleyUSAand is bordered by Squaw Creek. There are 24 residential parcels in which there are 4 listed single family properties for sale ranging from $2,450,000 – $3,900,000 and only 1 lot for sale at $395,000.
People Are Buying Homes AND GETTING MORTGAGES!
by The KCM Crew on January 11, 2012
Many believe that very few houses are selling and that almost no one can get a mortgage. We want to let everyone know that neither of these assumptions is true. Recently, the National Association of Realtors (NAR) released their Existing Homes Sales Report. According to the report there are, on average, 12,109 homes selling in the United States EACH and EVERY DAY! That means that approximately 12,000 houses sold yesterday, approximately 12,000 will sell today and approximately 12,000 will sell tomorrow. So the thinking that homes aren’t selling just isn’t true.
Another interesting fact in the report was that 72% of these transactions were accompanied by a mortgage. That means that approximately 8,719 people qualify for a mortgage on a daily basis in this country.
There are over 12,000 homes sold and over 8,000 mortgages granted every day. The real estate market is doing better than many believe.
Resort at Squaw Creek
Ranked among the top 50 best ski resort hotels in North America by Conde Nast Traveler magazine, the spectacular Resort at Squaw Creek™ offers luxurious Lake Tahoe vacation lodging, gracious hospitality and full-service amenities. Studio and one bedroom units with fireplace and kitchenette available for sale and rental.
strong>Our annual look at the prospects for U.S. luxury real estate in the coming year sees a fragmented recovery, with steady improvement at the high end.
By Camilla McLaughlin
In an increasingly uncertain world, real estate is emerging as one of the few sure things. We’ve seen a growing reversal of sentiment regarding real estate. Scarcely two years ago, buying real property seemed the biggest gamble in town. Today, especially for the wealthy, real estate is emerging as one of the few sure things. Prices at historic lows translate into once-in-a-lifetime buying opportunities, whether computed by dollars or the ability to acquire a platinum residence in a prized location. Tired of watching and waiting, with a keen eye toward value, a growing number of affluent consumers are ready to jump back into the market. In 2011, a number did, and these fundamentals, along with uncertainty in both the stock market and global economies, make the outlook for luxury real estate in 2012 at least as good as — but perhaps better than — 2011.
Affluent buyers are viewing real estate as a good long-term investment at current prices and an attractive alternative to the volatility of the stock market, observes Rick Turley, president of Coldwell Banker Residential Brokerage for Northern California.
“While affluent consumers are watching to see what will happen with the global economic situation, many seem concerned that they will miss out on low prices and low interest rates and they are tired of putting purchases on hold,” says Laurie Moore-Moore, founder and CEO of The Institute for Luxury Home Marketing. “Some are still shifting dollars from other investments into residential real estate in the belief that long term it will be a good investment.”
Blockbuster sales such as the $85 million Spelling Manor in Holmby Hills, Calif., or the $100 million mansion in Los Altos Hills, Calif., generate headlines, but the real story of luxury real estate in 2011 can be seen in high-end markets all over the country. In Sarasota, Fla.: “Our inventory is at record low levels, down to pre-2005 levels,” observes Michael Saunders, founder and CEO of Michael Sanders Company. In Atlanta: $1 million-plus sales increased by 24 percent in the third quarter while days on market went down 26 percent. In the Hamptons: Homes priced at $5 million or up sold at pre-recession rates.
“While total U.S. home sales fell about 13.7 percent in the first half of this year, activity declined less or even increased in many high-end ZIP codes,” reports San Diego-based DataQuick, which tracks home sales nationally. “Nearly 45 percent of a group of affluent ZIP codes, those with a median sale price of $800,000 or more in the last two years, saw sales rise in the first half of this year compared with last.”
More than a few properties closed well above the $20 million mark in a range of locations. More importantly, what occurred was a steady — sometimes slow, sometimes not so slow, depending on the location — rise in the number of overall sales, particularly above $3 million.
“Looking back, 2011 has really been a better year for us,” says Philip White, president and COO of Sotheby’s International Realty Affiliates. “Our sides are up significantly year over year. Prices are relatively flat compared to last year. Last year (2010) was a notable year in terms of the higher end market, but that was coming off a bad year. Statistically, 2010 was up over 2009 because 2009 was so bad.”
In an Institute for Luxury Home Marketing survey of U.S. agents in the $1 million-plus market, 77 percent reported an increase in luxury activity in 2011 over 2010. Internationally, sales are up as well, according to a recent Christie’s International Real Estate survey. Roughly, 67.5 percent of member brokerages responding reported an increase in buyer activity for the first eight months of 2011.
Sellers coming to grips with the realities of the current market became the tipping point in many places. “You can’t put a strategic price on a property that you are going to move down from. You’ve got to be very sensitive to what brokers are telling you it should be,” advises Robert Borden, chairman of the board and chief residential advisor at LandVest.
Miami showed substantially more growth than any other market in 2011, but by fall, other Florida locations were beginning to show signs of revival. “The Florida population is increasing, unemployment is decreasing and we are seeing more corporate group moves. Real estate unit sales are up, including $1 million plus,” observes Betty Graham, president of Previews International for Coldwell Banker NRT.
Speaking about the 2011 market at the National Association of Realtors annual conference, NAR Chief Economist Lawrence Yun underscored the contradictions in the current market. Although homes are more affordable than at possibly any other time, there has been no appreciable uptick in overall sales. “The Fed wants to stimulate lending, but it’s hard to get loans approved,” he observed. Consumer confidence still registers at low levels, although jobs are picking up. The litany of positives for real estate, according to Yun, include a slowing of price depreciation, a decrease in the inventory of newly foreclosed homes, and, in many areas, the number of for-sale properties is trending down.
In some places, including those hardest hit by the downturn, inventories are approaching lows that haven’t been seen for years. Add to that a growing understanding among consumers, especially high-net-worth individuals, that the time to buy is now. “The smart money is coming back to the market,” says John Turco with Prudential Florida Realty of Naples, Fla. “I have never seen the Naples market take off like it has. Our market started to improve about five months ago. Our inventory is off by at least 60 percent from last year.”
In Paradise Valley and North Scottsdale, Ariz., the number of homes for sale holds steady while per-square-foot prices are trending upward, reports Tom Pelliteri with RE/MAX Excalibur Realty. In Houston, Keller Williams Realty agents see money on the sidelines beginning to venture back into the market and a pent-up demand for homes in the $1 million to $1.5 million range. And in Miami, “The market has definitely been on an upswing. We are closing $250 million this year,” says Jill Eber, with The Jills Team at Coldwell Banker Residential Real Estate.
At year-end, a growing number of reports such as these from luxury enclaves all over the country paint a picture of high-end markets stabilizing and, in some instances, improving. Not only are luxury properties selling in more locations but brokers tell us they have even more sales pending. “Big properties are under negotiations now,” says Eber.
“High-end deals are coming together in a lot of the major urban markets,” observes Paul Boomsma, president of Luxury Portfolio International and COO of Leading Real Estate Companies of the World.
Seattle broker John Brian Losh, who is also the publisher of LuxuryRealEstate.com, acknowledges increased sales, but also notes reduced prices. “Transactions started to happen pretty consistently throughout the year, but prices are much lower. Properties are selling, but at bargain prices.” Moore-Moore agrees. “Luxury buyers relish the art of the deal. They are value conscious and are looking to buy future profitability by buying smart.”
The big story for the high-end market in 2011 was foreign buyers. They only account for approximately 5 percent of U.S. sales, but as prices and the rarity of a property increase, so too does interest from buyers outside the U.S. Also important is the appeal of an area. In Florida, 25 percent of all sales from June 2010 to June 2011 were to foreign buyers, particularly Canadians, Brazilians and Venezuelans.
The hottest markets are global destinations such as Beverly Hills and New York that attract international and domestic buyers. Foreign buyers buoyed Miami’s record year. Here, cash transactions, favored by foreign buyers, accounted for 43 percent of single-family and 77 percent of condominium sales in October. Nationally, only about 29 percent of sales are all cash.
“International buyers look to the U.S. as stable politically, a safe haven for money, offering a desirable lifestyle, and on sale! They will continue to invest in U.S. luxury homes,” says Moore-Moore.
This year, other places including San Antonio, Vail, Atlanta and Chicago report growing interest from outside the U.S. Houston, according to Bruce Kink at Keller Williams Metropolitan, has seen an increase in buyers from Latin America, China, Japan and Russia.
There are no indications that this interest will slack off in 2012. “So far we’re seeing great things happen. We’re so busy showing things it’s hard to keep up. We have people coming from out of the country and not just in the summer time now,” Beverly Hills agent Jade Mills said in early December. Mills, with Coldwell Banker Previews International, is ranked as the No. 2 real estate agent in the world. Particularly notable, she says, is the number of buyers from Russia, China and Indonesia looking in Los Angeles’ famed Westside neighborhoods.
And rather than putting a damper on sales, the economic turmoil in Europe is only enhancing the cachet of U.S. properties. “No one really knows what’s exactly going on in Europe and that’s disconcerting, but on the other hand that makes U.S. real estate more attractive,” says Losh.
“A lot of people in the world are still more confident about our economy overall than their own,” says Boomsma. “Most of the world still sees the U.S. as a safe haven for investment, for property rights and ownership.”
Still, assessing the market — and even categorizing the recovery — continues to be complicated. Many local markets continue to struggle, which means that in spite of promising indicators, crystal balls this year are apt to be a little fuzzy. “The country and the luxury space are becoming more fragmented so it’s harder and harder to make not only a global statement, but to make a national statement,” comments Boomsma.
“In 2011, the luxury market continued its recovery overall, although each market continued to deal with its unique situation,” says Kathy Neu, president of Luxury Homes by Keller Williams. “Based on what we hear from industry experts and our associates, this trend will continue in 2012 as buyers take advantage of the opportunities in the recovering market.”
Looking ahead, Graham sees more positives for Florida, including, “expectations that the widening of the Panama Canal will increase commerce.”
John Tuccillo, former NAR chief economist and current chief economist for the Florida Association of Realtors, cautions, “The recovery will be long, but it is a recovery. I think that we are past the bottom, but the slope up is not very steep — or won’t be until we can create more jobs.”
Looming for 2012 also are a number of potential bumps along the road to recovery. One is the presidential election, which Losh describes as the proverbial elephant in the room. “Traditionally, election years are good for business. I think activity will remain the same if not pick up. But this is an extraordinarily long recession, so that could change things,” he says.
Other wild cards include potential changes in tax laws, including potential cuts to the mortgage interest tax deduction. The lower end of luxury, under $2 million, has not experienced the same uptick as the higher prices. This is the price bracket that is also most affected by constraints from lenders and from changes to loan limits for conforming loans that took place earlier this year.
Don’t be surprised to see more distressed sales of high-end properties, says Moore-Moore, as more owners lose upscale homes and others choose strategic default as an option. “As of the fall of 2011, 2.3 percent of homes in foreclosure were $1 million property. Expect this level to hold for 2012,” she says. However, these sales might also offer an opportunity for new luxury buyers to move into the market, shares Rob Aigner with Keller Williams Beverly Hills.
Will 2012 end better than it started? “I’m betting we’ll see the number of luxury home sales going strong at the end of 2012,” concludes Moore-Moore. “Prices will still be under pressure as we work through high-end short sales and foreclosures. Will 2012 be a good time to buy upper-tier homes? Absolutely. Qualified prospects will find plentiful inventory and good value.”
The Village at Squaw Valley opened with its first phase in February of 2002 and second phase in December of 2003. The Village consists of approximately 300 one, two and three bedroom condominium suites, six restaurants, 20 retail shops and a full service spa. It offers slope side condominium suites located next to the world renowned Squaw Valley USA Ski Resort. Condos are available for purchase and rental. Let us know if you would like more information.
Tavern Inn condos at Squaw Valley have been in litigation and it is over! Great news for the condos.
Officially over and the end result is in favor of the homeowners of the Tavern Inn condos. The board president as said that the litigation papers have been released (by the court) and it will be possible for homeowners to refinance their loan. For buyers; to obtain a loan to purchase a unit at Tavern Inn in Squaw Valley. Squaw Valley now offers several different ownership options when it comes to a condo.
Homewood Mountain Resort made key adjustments to the master plan such as reducing the project size, moving the location of several buildings within the resort, and adding additional environmental monitoring requirements over the next 20 years to ensure the project terms are honored.
Hot Off the Press
> As a result of over 1,800 comments submitted during the Draft Environmental Impact Statement review process, Homewood Mountain Resort made key adjustments to the master plan such as reducing the project size, moving the location of several buildings within the resort, and adding additional environmental monitoring requirements over the next 20 years to ensure the project terms are honored.
> During the hearing, TRPA’s Governing Board heard nearly 70 public comments which were more than two-to-one in support of approving the Homewood Mountain Resort project.
> “Today the public process worked for the benefit of Lake Tahoe,” said Norma Santiago, TRPA Governing BoardChair. “After thousands of comments, four hours of public testimony, and a rigorous analysis of the environmental impacts of the project over the last four years, the final Homewood project will be better for the lake and the community.”
> “The environment and the economy go hand in hand,” said Renee Koijane, a full-time Homewood resident and mother of two, “and this project embraces both.”
> A huge, huge thank you to all who came out last night and to other hearings to speak as well as to those who sent in letters.
> We did it!