Home Sales- US and Tahoe Market

The reality of the home sales market is that 95% of mortgage payers pay on time and that 4 million homes of the 120 million homes owned in the US are at risk or foreclosure- that is 3%. Currently, 2% of US houses are in foreclosure, primarily in California, Florida, Nevada and Arizona. This would leave 1% of additional homes at risk of foreclosure. Since the bulk of the short term, low rate loans were issued between 2000 to 2004 for 3-5 year terms, the ramifications of increased rates should be realized for the majority of these loans by 2009.

Watch this visual breakdown of what portion of homeowners are actually in trouble in this Dennis Kneale Housing Crisis video from CNBC.com.

 Mortgage rates are also beginning to rise, and predicted to increase to 6.5% for a 30 year fixed conforming loan by the end of 2008, according to NAR. It seems as though buyers are starting to dip their toes back into the waters in some markets, as pending home sales rose 5.3% in June.

“Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved.  The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.” Read more from NAR’s August report ending Home Sales Rise.

In talking with Bay Area real estate agents, news is that buyer activity has picked up recently. The second home market in Tahoe will likely lag behind the pickup in sales in California’s desirable Bay Area communities, but the large inventory and falling home prices are likely to peak buyer interest soon.