10 Reasons to Buy Tahoe Real Estate…Now
Home Prices are Down, Inventories are Up- Buyers worry ”What if prices continue to fall?” When you’ve found a home that has the potential for everything you want, and the Seller is motivated to sell now, this home won’t be available next year when you’ve decided prices aren’t going any lower. There is an opportunity to find homes below market value in any market, so if the right home comes along and you can negotiate a fair price, don’t pass it by.
You Can’t Call the Bottom- The only way to tell when prices have truly “bottomed” is when they start going back up. By that time, Buyers that have been waiting to purchase will try to move quickly. Demand will increase, the media will flip-flop on their “doomsday” message and prices will start to improve. Some Buyers will look back to some lost opportunities, as soon as we’ve all realized we finally turned the corner. Others will pay more than they could have a year ago when everyone was afraid, and still counting on their stocks to rise.
Less Volatility- We’ve all watched the stock market gyrations in reaction to market news, fears, and even rumors where 5-10% swings aren’t uncommon any more on a daily basis, and extreme volatility is now “commonplace”. Many investors are purchasing real estate in their retirement accounts. Your stock broker won’t tell you that since they won’t make anything off the trade (unless it’s an REIT). You can’t take your family on vacation to your REIT.
Lowest Interest Rates EVER- Interest rates have dropped below 4% for a 30 year fixed rate mortgages for the first time, ever. HELOC’s are available below prime (I have a variable rate HELOC currently at 2.75% I got with no closing costs). If you opt for a long-term rate now, you won’t regret looking back to a missed opportunity if rates edge back up to 6%. If they continue to fall (there’s not much further to go), you can always refinance to a lower rate if you have equity in your home and good credit. In reality, if home prices drop another 10%, the savings to Buyers is nullified if mortgage rates go up by 1%.
Treasured Places- Tahoe will always top the lists as one of the most treasured locations to live, play, relax and enjoy. Families have come to places like Lake Tahoe for generations to swim and boat in the clear waters with consistently sunny, dry weather; hike, camp, climb and bike in the Sierras, and ski in one of the highest concentration of ski areas in North America- just 3 hours from the Bay!
Tahoe Land is a Scare Resource- 85% of the Tahoe Basin is publicly owned land, and will likely never be built on. What developed land remains, will not “grow” in response to demand, so as with any limited resource, value will increase. Polulation continues to increase, and we see the continued tred towards migration to populated areas, especially on the East and West Coasts, the Bay Area included. Demand for property in Tahoe will only increase in the long-term.
Stable Economies- Silicon Valley and the Bay Area is the most valuable incubator for innovation, jobs and education in America. Where real estate values in many areas have languished, homes in Santa Clara county have not been hit as hard. Lake Tahoe Real Estate values have been linked to the Bay Area, as the trend towards vacation and second homes continues. Unlike many other vacation destinations like Hawaii, Vail and Aspen, or foreign destinations, Lake Tahoe is accessible. Tahoe is within a few hours drive of San Francisco and only 45 minutes from The Reno-Tahoe International Airport, with affordable “close-haul” carriers like Southwest Airlines. Accessibility to wealthy, working populations bodes well for Tahoe’s stability.
Cost to Rent vs. Own- Rental rates have grown and rents have increased, while the affordability of home ownership has gone down. Vacation rentals revenues have grown by 18% in 2010, and 4% YTD 2011 (Goldfish Properties), and many second home owners are recouping costs by offering their homes and condos as vacation rentals while they aren’t there. Tahoe is fortunate to have two strong rental seasons, both in Summer and in Winter (up through spring with late snowfall).
Property Taxes have Decreased- As home prices have decreased, so have assessed valued. Incline Village residents are being refunded $17 million in overpaid property taxes. In Washoe County, taxable values are reviewed annually independently of sales price. This is making home buying more affordable.
Real Estate is Tangible- What are your favorite childhood memories? Warm summer days boating with friends? Family ski trips to the mountains? Maybe you didn’t have that opportunity, but you do now. If you are lucky enough to have the means to invest in this market, or feel your investments are a little too weighted in the volitility of the stock market, consider this a unique opportunity to buy while others are selling. ”Think Different”- Steve Jobs embodied this. “Be greedy when others are fearful” Warren Buffet said this. You can put a price on happiness, and that price is now…”Negotiable”, just make an offer.
