Lake Tahoe Real Estate: “Lack of demand may keep house prices from a consistent rise until 2014”

by Joe Salcedo on 5:44 am

Lake Tahoe Hidden Beach

Secret Spot in Lake Tahoe

This was the headline for a financial blog today provided by capital economics .  The article went on to say that:

“…Foreclosure sales should keep house prices down 3% in 2011, resulting in another 5% for the year as a whole.
Easing the flow of foreclosures on the market may stabilize prices to 35% below the peak in 2006.

“But while prices tend to rise rapidly in the years after downturns, this time a chronic lack of demand means that they will probably be unchanged in both 2012 and 2013,” Capital Economics said.

I like this analysis by C.E.  I don’t usually buy real estate pundit commentary but their analysis makes sense especially with what’s already happening in the local Lake Tahoe real estate market — as home values seem to be on a steady sideways movement; it might make sense to still expect a double dip. In short, it’s dangerous to think we’ve hit a market bottom.

I believe this is the real state of our market: the earliest scenario for prices to stabilize is 2013.

Two things: we still lack a strong, sustained buyer demand and the domino effect short sales and foreclosure brings can never be underestimated.   Another good tidbit they mentioned:

“The danger is that the further fall in prices this year will send more homeowners into negative equity, which then leads to more defaults and more forced foreclosed sales,” the note from Capital Economics said. “In such a scenario, prices would fall next year too, before possibly stabilizing in 2013.”

What’s interesting is did you know this report is primarily catered to the U.K housing market? But you can almost copy word for word in relation to the market here at the Lake.

I don’t mean to scare anybody and ruin anybody’s day.  We have enough bloggers out there jumping on the gloomy bandwagon just for the sake of it — without deep thought into what they’re shouting on top of the roofs.

But I believe this is the real state of our market:  the earliest scenario for prices to stabilize is 2013. Blessings on us if it happens before that.  But as far I can see (based on current market conditions) it’s not going to be this year or the next.  And with median home prices hovering just under half a million — there’s a lot at stake.  I want to help you make the best decision possible.  That’s all I’m aiming to accomplish. [And perhaps earn your business after I earn your trust. =) ]

Buying is a calculated risk, the less risk, the better, and it all depends on your needs and wants.  I’m only here to let you know what’s in front of me when I sit on my desk in the morning and start my research.

Hope it helps…

Comments on this entry are closed.

Previous post:

Next post:

“Joe’s your man if you need someone to trust. Joe Salcedo is a hard working Realtor. Joe is very professional and will go the extra mile.”

– Philip Duane Johncock

“I was laid off from the state in November of 2007 due to major budget cuts. We were no longer able to make our house payments as the job market was just beginning to get worse and worse. My agent in San Jose found Joe Salcedo in Reno for me and told me he has a lot of experience in short sales. He priced our home at a very realistic price in relation to the market values at the time. Joe was very professional and before we knew it we had an offer on our home. In September of 2008 our home closed and the bank forgave the difference. A short sale comes off of your credit in a much, much shorter time than a bank foreclosure. We will be forever grateful for the assistance of Joe Salcedo”

– James and Marsha McGinnis (feel free to call for a reference, Joe has my number)

  • FREE Short Sale Guide:
    Learn about options for distressed owners, what to expect in a short sale, hardship letter samples, etc.,

    powered by MailChimp!