Buyer Advice: Price vs. Cost

I came across an interesting article put out by Keller Williams  – some good info for buyers to think about:

Home affordability in the United States is nothing short of amazing. Even though current price trends for the United States and Canada are considerably different, the same principle applies in both cases: clients need perspective and they need to look beneath surface statistics before making informed decisions

The chart below dramatically illustrates the impact of lower interest rates on housing costs, and the relative affordability of housing in the United States. The cost of a loaf of bread and a gallon of gas has more than tripled since 1989, and car prices have nearly doubled. While the median price of a new home has increased by 70 percent, mortgage interest rates, which stood at 10 percent back in 1989, are less than half of what they were back then. The impact of rock-bottom interest rates is that the monthly mortgage payment on a median priced home in the United States has increased by a mere $4 since 1989.

  
Unless a buyer is paying cash, the monthly payment tends to be a far more relevant number than the home’s actual purchase price. So for buyers who are waiting for home prices to hit the floor, before buying it’s important to point out that the possibility of a slight drop in the price of a home will have very little impact on the monthly payment, while even a slight rise in interest rates (a far more likely scenario) will have a significant impact.

Timing the market to a T is never possible and in the current market, staying on the sidelines is more likely to result in a missed opportunity than a small savings. 

Even so, buyer reluctance in the current market can outweigh compelling facts. U.S. buyers are skittish about the housing market, and the fact is market skittishness is actually a good reason to buy now.  General uncertainty about the housing market and a reluctance to take action only contributes to the number of deals and negotiating power available to astute buyers. U.S. buyers who are waiting for the real estate market to “recover” are in fact waiting for a reduction in inventory, fewer foreclosed properties on banks’ books, rising home prices and sellers who don’t need to be as motivated.

That scenario will be welcome news for sellers, banks and the U.S. economy as a whole, but not for buyers. Now is the time for U.S. buyers to act and to offer the perspective that helps them to understand why.

Jamie Schou
Direct – 530-798-1393
jschou@kw.com

Filed Under Buying Your First Home, Real Estate News, Uncategorized 

Real Estate: It’s Time to Buy Again

Thinking of buying, but not sure the time is right? If all the noise you’re hearing about housing has you totally confused, join the crowd. One day you’ll read that owning a home has never been more affordable. The next day you’ll see news that housing starts have plunged to nearly their lowest level in half a century, as headlines announced in March. After four years of falling prices and surging foreclosures, it’s hard to know what to think.

I came across a great article from Fortune Magazine that details the reasons and trends showing why NOW is the time to buy. Read Full Article 

If this article has spurred some interest and you would like to see what is available in the Tahoe/Truckee market, you can View All Listings. Or just give me a call and let me kow what you’re looking for, I would be happy to help.

Jamie Schou
Direct – 530-798-1393
jschou@kw.com

Filed Under Real Estate News, Uncategorized 

Buyer’s Alert – The Resort at Squaw Creek Auction


The Resort at Squaw Creek is a four-star resort featuring direct lift access to Squaw Valley for winter fun, a beautiful golf course for summer enjoyment, pools, hot tubs, spa, exercise facilities and on-site restaurants.

The developer will be auctioning their remaining inventory at the end of this month, with minimum bids starting at $130,000 for a one bedroom condo and $180,000 for a two bedroom condo.                                                           View Available Units

This is a great opportunity to get in at The Resort at rock-bottom pricing. Recent sales of similar two bedroom condos at The Resort have been anywhere from $378,000 to $500,000. 

I have a substantial amount of information and there is a buyer registration process so contact me today if you are interested in taking part in this auction.

Jamie Schou
Direct – 530-798-1393
jschou@kw.com

Filed Under Bank Owned/Foreclosures and Other Great Deals, Neighborhoods, Real Estate News, Squaw Valley, Uncategorized 

Housing Market on Its Way to Repair?

Here is an interesting article from FoxBusiness.com -

“If what goes up must come down, is the opposite true? If home prices go down, will they eventually go back up – or at least level off? The Wall Street Journal’s Simon Constable says yes. He’s predicting an end to the housing crisis…. this year.

Let’s take a look at what we know. Last week’s S&P/Case Shiller index shows prices fell another percent in December. In fact, since the bubble burst in 2006, prices have fallen by 31%, after steadily rising for more than a decade.

But with falling prices comes affordability. An average family would only need 19 months of pay to afford a home – that’s the lowest point in 35 years. The national average used to be closer to two years, but that varies depending on where you live.

Five years ago – at the height of the housing boom-a home in Los Angeles would require four and a half years pay. Now it’s back to two years. And even though experts predict prices will still fall somewhat this year – they foresee only a drop of 5%.

So now may be the time to jump into the real-estate market. One analyst says, “Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own…”

Another sign of better days to come: investors are jumping back into the game. That gives confidence to a struggling market and pay push a turnaround. And many of these investors are paying in cash – another great sign. The paper points out that nationally more than a quarter of homebuyers paid in cash last year. Some regions are even better: in Miami, more than half of all transactions were made in cash. In 2006 it was only 13%. The same goes for Phoenix, where nearly half of the transactions are now in cash – triple what it was in 2008.

Now I am not going to stand here and tell you in the next few months we’ll be back to the heyday of the last decade… nor should we be. But we need to get people back into the housing market, making sound investments with the right amount of savings…and a turn-around may be just the way to do it.”

By Gerri Willis

Many of the points in this article ring true for the Tahoe/Truckee market as well. There has been an increase in cash offers, especially on more competively priced homes. We have seen several situations where a cash offer is accepted by the seller, even with a higher, financed offer in hand. The well priced home that represents a value is being snatched up in a week, sometimes days or even hours after hitting the market. All the more reason to work with someone who knows the market and can alert you to the deals before they are gone. Contact me today so I can begin working for you now!
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Jamie Schou
Direct – 530-798-1393
jschou@kw.com

Filed Under Real Estate News, Uncategorized 

Vail Resorts to invest $30 million at Northstar-at-Tahoe

TRUCKEE, Calif. – Vail Resorts – which purchased Northstar in late 2010 and also owns Heavenly Ski Resort in South Lake Tahoe – announced Wednesday afternoon a $30 million investment plan for Northstar-at-Tahoe ski resort that will include new restaurants, national retail outlets and 10 percent more skiable terrain for the 2011-12 winter season.

“The initial consumer response to the combination of Northstar-at-Tahoe with Heavenly Resort drove strong increases in season pass sales for both resorts, and that has translated into higher visitation, as Northstar-at-Tahoe is currently on track to achieve a record season in terms of visitation and revenue,” said Rob Katz, chairman and chief executive officer of Vail Resorts, in a statement.

Katz said the investment marks the first of many improvements in line for Northstar in future years.

With a vertical rise of 1,440 feet, a detachable express quad chairlift will be installed this summer on “The Backside” of the mountain, providing access to expanded terrain and new ski trails.

An on-mountain restaurant will be constructed near the top of the Tahoe Zephyr Express lift, according to Vail, offering 500 indoor seats and 200 outdoor deck seats. Menu items will include pizza and specialty soups and sandwiches.

“Installation of the new express lift and construction of the new on-mountain restaurant will offer more terrain and greater access in Northstar’s most popular lift area, and add much needed seating on the mountain,” said Bill Rock, chief operating officer at Northstar.

Northstar village will also receive a facelift, Vail said, as plans for next winter include opening national retail outlets Patagonia and Burton, as well as expanding the North Face store in a new location. Vail also plans to add a new restaurant in the village, where work will begin this spring and summer.

This announcement, along with KSL Capital Partners’ plan to invest $55 million at Squaw Valley, shows that ‘big money’ feels the area is a solid investment. With housing prices down and mortgage rates at near all-time lows, there are many incredible opportunities for buyers. Contact me today for more information about how you can take advantage of these unique market conditions.

Jamie Schou
Direct – 530-798-1393
jschou@kw.com

Filed Under Northstar, Real Estate News, Uncategorized 

For Buyers:The Financial Opportunity of a Lifetime?

An interesting post from The KCM Blog

by The KCM Crew on March 2, 2011  – We often point out that a buyer should be more concerned about the COST of a home rather than the PRICE. Price obviously is a component of cost. However, unless you buy all-cash, you must also be concerned about the financing of the purchase. The price and the financing together determine the cost of a home. Today, we want to look at only the financing piece.

An opportunity exists today because of recent government involvement; an opportunity that may never again be available in our lifetimes. There has been much discussion about what role the federal government should have in supporting homeownership. We will leave our opinions on the debate for another time. However, we want to alert you to two advantages available to a purchaser today that may disappear in the future:

  • Historically low interest rates
  • The ability to lock in these rates for thirty years

    • Read the ful story HERE

    I am not sure what this lifetime holds for me but to lock in a loan at or below 5% for 30 years certainly seems like a great opportunity.  Contact me if you are interested in learning more about YOUR opportunities in the Lake Tahoe and Truckee area.

    Jamie Schou
    Direct – 530-798-1393
    jschou@kw.com

    Filed Under Bank Owned/Foreclosures and Other Great Deals, Real Estate News 

    Tahoe/Truckee Real Estate News – Rates on 30-Year Fixed Mortgages Rise to 4.74%

    A recent article from AP reports that the average rate on a 30-year fixed mortgage rose slightly this week, following increases in Treasury yields.

    The average rate rose to 4.74 percent this week from 4.71 percent the previous week, Freddie Mac said Thursday. The average rate on the 15-year loan, a popular refinance option, slipped to 4.05 percent from 4.08 percent.

    Mortgage rates have changed little in the new year after spiking more than half a percentage point in the last two months. Investors sold off Treasury bonds during that stretch, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.

    The 30-year loan rate reached a 40-year low of 4.17 percent in November, and the 15-year mortgage rate fell to 3.57 percent, the lowest level on records dating back to 1991. Historically low rates have done little to boost the struggling housing market.

    Now is a great time to buy in the Tahoe/Truckee market. Eager and negotiable sellers combined with low mortgage rates makes for very favorable purchase conditions. View all area listings Here. Call me today to learn how you can take advantage of this unique period in the real estate market.

    Jamie Schou
    Direct – 530-798-1393
    jschou@kw.com

    Filed Under Real Estate News, Uncategorized 

    Tahoe/Truckee Real Estate News – Positive Outlook For 2011

    With 2010 now behind us and 2011 fresh & ready for new beginnings, I want to take a look forward. While I don’t have a crystal ball, many recent articles are painting a positive picture for the upcoming year – both nation-wide and locally. Here’s what I found: (click the links to read the articles) 

    In a recent Wall Street Journal article online, housing economists expect the troubled residential market to begin picking up in 2011, with low mortgage rates and bargain home prices boosting sales in the spring selling season.

    The economists, who delivered their forecasts on a panel at the National Association of Home Builders’ annual meeting, noted the market remains extremely weak, prices are still falling, and they don’t expect any recovery to be robust. But they said a number of recent economic indicators have convinced them that housing sales, which have stalled lately, could soon begin to recover.

    “The economy is creating new jobs, holiday sales came in better than expected, and sales of cars and furniture have improved,” noted David Crowe, chief economist for the NAHB. “Those trends,” he said, are “signifying growing consumer confidence.”

    Another just-released WSJ survey of leading economists indicates they’ve turned more optimistic about the outlook for the recovery as well, despite the dismal housing market. They are predicting the U.S. will grow at better than a 3.2% annual rate in each quarter this year.

    “The U.S. economy appears to have successfully navigated the adjustment from a recovery driven primarily from economic stimulus and inventory rebuilding to one driven by private domestic demand and rising exports,” said economists at Wells Fargo & Co. “Three percent growth looks pretty good, particularly with housing stuck in low gear.”

    Another signal that bodes well for the Tahoe/Truckee real estate market was found in an article that states sales in many vacation communities across the U.S. (including our area) soared last year to levels not seen since boom times, driven by deep discounts, cash purchases and buyers’ rising stock portfolios.

    “The proverbial train has left the station,” said Ned Monell, an agent with Sotheby’s International Realty in Palm Beach. “We haven’t felt energy like this in a long time. Buyers sense that they’ve been on the sidelines long enough.”

    The question now is whether the momentum will last. The strength of second-home sales paints a stark contrast to the overall housing market, which is expected to worsen in 2011.

    The market for vacation homes, based on local sales data, appears to be booming. “The comeback,” NAR economist Lawrence Yun said, “has been helped by gains in the stock market and an improving economy, which have made wealthier Americans more upbeat about the future. It also implies that prices in some markets have come down so much that people are fighting for those properties,” said Mr. Yun, noting that demand is strongest in areas close to stable labor markets.

    Based on these three articles, the upcoming year should be an exciting one in the Tahoe/Truckee market. With the economy on the mend, job creation in focus and consumer confidence gaining, we should see an active year in sales locally. If you are interested in more information about purchasing or selling property, please contact me to discuss how I can help you reach your goals.

    View All Area Listings

    Jamie Schou
    Direct – 530-798-1393
    jschou@kw.com

    Filed Under Market Reports, Real Estate News, Uncategorized 

    Tahoe/Truckee Real Estate News – TCPUD To Take Control of Lake Forest Water Company

    TAHOE CITY -Good news for residents and owners in the Lake Forest Water Company service district, a Placer County judge has awarded operational control of a private water company to the neighboring Tahoe City Public Utility District. The judge also chastised the owner for putting the public at “significant” risk by supplying potentially contaminated drinking water.

    The ruling – handed down in Placer County Superior Court by Judge Margaret Wells – means TCPUD can immediately begin preliminary work on addressing shortcomings in Lake Forest Water Company’s deteriorated infrastructure. This will be a great benefit to those living in, and drinking the water from, the company’s service area.

    “There are ‘significant’ areas of substandard or leaky pipes and other conditions that urgently require repair or renewal,” Wells wrote in the decision. “The hardship to (TCPUD) by delaying the order for possession is substantial. More importantly, the harm to the public by the delay is significant.”

    The ruling represents the first step in the public utility district assuming full control of the Lake Forest company through eminent domain.

    “We are prepared to move forward with the operation of the system as authorized by the order of possession,” said Tony Laliotis, TCPUD director of utilities.

    The Placer County court must still decide on a fair market value for the water district and how TCPUD will compensate Lake Forest Water Company’s current owner, Rick Dewante.

    Jamie Schou
    Direct – 530-798-1393
    jschou@kw.com

    Filed Under Real Estate News, Uncategorized 

    Tahoe/Truckee Real Estate News – Rates Rise for the Third Time in as Many Weeks

    McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the both fixed- and shorter-term mortgage rates rose this week. This was the third week in a row where fixed-rate mortgage rates were up.

    30-year fixed-rate mortgage (FRM) averaged 4.46 percent with an average 0.8 point for the week ending December 2, 2010, up from the week before when it averaged 4.40 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.

    5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.49 percent this week, with an average 0.6 point, up from last week when it averaged 3.45 percent. A year ago, the 5-year ARM averaged 4.19 percent.

    1-year Treasury-indexed ARM averaged 3.25 percent this week with an average 0.6 point, up from last week when it averaged 3.23 percent. At this time last year, the 1-year ARM averaged 4.25 percent.

    Frank Nothaft, vice president and chief economist at Freddie Mac, states, “Mortgage rates followed bond yields higher this week as recently released economic data suggest the economy may be stronger this quarter than the previous. Regional manufacturing indexes for Dallas, Chicago and Milwaukee all rose in November. In addition, the Federal Reserve noted that 10 of its 12 regions saw improvement through mid-November in its December 1st regional economic review.”

    “House prices indices, however, are trending downwards. The 12-month growth rate in the S&P/Case-Shiller® 20-city index eased from 1.7 percent in August to 0.6 percent in September. Only six of the cities had positive annual growth, compared to nine in August.”

    It looks like it is a great time to buy, right now. With prices so low and rates possibly going up, it would be to a buyer’s advantage to get in now on rates before they go up. Contact me now for a cost savings estimate when buying the same property at the same price with different rates – you will be amazed at how much you can save over the life of a loan with just a small percentage difference.

    View All Area Listings Here

    Jamie Schou
    Direct – 530-798-1393
    jschou@kw.com

    Filed Under Real Estate News, Uncategorized 

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