It’s a Sunday night in February on Donner Summit and you and your family have just spent a great day enjoying the powder at Northstar and are now inching your way home through all the ski traffic. Avoid this situation this winter and discover the pleasure of being able to come and go as you please: now is the time to buy your Lake Tahoe or Truckee vacation home.
According to Truckee Realty Broker, as of September 2013 there are 536 active residential property listing with less then a third pending in the Lake Tahoe and Truckee area. On average, homes are going for 96% of their asking price and spend 87 days on the market.
There is a wide variety of homes to choose from turn-key to tear down. Gathered data, from homes sold since January 1st, reveals that of the 669 sold, 400 were build before 1990. For those up for the challenge of remodeling or creating their dream vacation home, this is an opportunity to consider.
Ephraim Schwartz of O’Dette Mortgage Group expects the residential real estate market to rise in the Tahoe/Truckee area by 10% the end of 2013 (as compared to 2012).
Please meet the newest addition to the AMK group, Gus.
Although young, Gus has already demonstrated a keen design eye. Given a red pen and a set of plans, Gus quickly whips our drawings into shape.
He is not limited to one skill set. Gus takes his role as our community liaison very seriously, making sure to greet everyone with the love and respect of a professional puppy.
Such hard work is usually followed by a 2 hour nap.
Design can be exhausting.
Photo Credit: Gabriel Guerriero/ Jamie Pratt; Contributing Author: Jamie Pratt
Are you considering purchasing a home in Northern California? Mortgage rates are predicted to rise on a 30 year fixed to about 5% by the end of the 2013. Purchase your new home now!
The following is an interview with Ephraim Schwartz, Mortgage Consultant at O’Dette Mortgage Group. Schwartz provides insight on present mortgage market conditions and how to obtain best mortgage rate.
Q. What are mortgage rates predicted to do within the next year?
Daily volatility for mortgage rates will likely continue into future, but overall rates are definitely going to increase. My best guess is that a 30 year fixed conforming mortgage will finish in the neighborhood of 5% at the end of 2013.
Something that is not always made clear to the public is that mortgage rates are not set by the Federal Reserve. Conforming mortgage rates are based on the price of mortgage bonds. The Federal Reserve can influence rates by purchasing bonds, as they are doing now with their 3rd round of Quantitative Easing (QE3), but it’s overall market conditions that determine which direction bond prices move, and therefore rates.
Q. How much are home prices expected to rise within the next year?
Case Schiller 20-City Home Price Index (20 key cities in the United State) increased 12.2%, year over year in May. Looking at the next year ahead, it will absolutely vary depending on the market. My markets are Lake Tahoe, and the San Francisco/Marin Bay Area. No one has a crystal ball, but I would expect to see Tahoe continue increase less than 10%, and the Bay Area could increase 15% or more. The Bay Area’s limited inventory, and thriving economy, will continue to push prices up in this competitive market.
Q. Would you advise buying a house now?
Absolutely. There is a reason why we are seeing so many cash offers in the Northern California Real Estate market, and it’s because the stock market and bond market have little more room for immediate upside. The bond market is about to head into a long term down turn, and although stocks have performed well, they do not have much higher to go. If the question is where best to put one’s money, the answer is no better than Northern California real estate. Prices and demand are on the rise, and while rates are up from their all time low, a 30 year fixed rate mortgage is still approximately only half of its average over the past 40 years.
Q. How can one obtain the most competitive mortgage rate?
- A credit score greater than 740.
- A down payment of 20%. To note, with a great credit score, one can actually obtain best case rates with less than 20% down, but must buy private mortgage insurance. Best case rates can actually be had with 10% down. But the sweet spot in terms of lowest cost of monthly ownership is 20% down.
- Income: Must be supported by 2 years of tax returns.
- A note to the self-employed: It can be extremely valuable for self employed (1099) workers to consult with a good mortgage adviser prior to even structuring tax returns, as it could impact if they may choose to forego some write-offs.
Q. For those considering purchasing a second home, do they have any advantage on rate and should they finance with their primary mortgage lender?
When purchasing a second home, there is no advantage in obtaining a mortgage with a primary home lender. For each mortgage, borrowers should select a mortgage adviser who is an expert in their field, and holds the borrowers best interest as the absolutely top priority. If the second home is in a unique vacation market, it’s always good to go with someone local who is familiar with the properties and area.
Q. If a buyer finds a piece of land or fixer-upper, can they borrow more money on their mortgage to cover building costs?
Loans for raw land are slowly coming back to market. They can be had, but generally require strong down payments. For fixers; these are called “rehab” loans. There is a Federal Housing Administration 203k Loan that will include funds to remodel.
Good news! Our office family has grown with the addition of two new members! In celebration, we were given the opportunity to attend the fourth game between the Oakland A’s and the San Francisco Giants on Thursday May 30th. With loyalties split down the middle, we were excited to show our colors and made multiple attempts to convert our opposing office members to root for our team.
The Oakland A’s fans in our office watched with joy when they scored a run in the first inning, and later with agony when the San Francisco Giants lead their team to victory with a 5-2 win.
We celebrated the victory with our gloating half of the office, and returned from our outing ready to take on new challenges. Being on opposing sides allows us to see many different perspectives, and that makes our office family stronger.
Both practical and beautiful, this website argues that perhaps bookshelves might even be…sexy.