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Are More Forecosures coming to South Lake Tahoe?

March 15th, 2010 categories: For Buyers, For Sellers, Foreclosures, Lake Tahoe Real Estate, National real estate news, South Lake Tahoe, CA, Stateline, NV, short sales

The Washington Post

South Lake Tahoe, and other resort markets, are different when compared to the nation.

This Washington Post article came out Friday, and was basis for discussion on cable news outlets as part of their weekend programming.

Lets review some points in the article, then we'll look at South Lake Tahoe real estate market details.

  • About 5 million to 7 million US properties are potentially eligible for foreclosure.
  • It could take up to three years before all these homes have been sold.
  • Homeowners who are in trouble now are people who have better credit, safer loans and have become delinquent because of job loss or other economic setbacks (healthcare costs being one of those).
  • Some lenders are giving distressed borrowers more time to see whether they can modify the terms of their loans.
  • Effect of this could be muted if eager buyers quickly purchase these properties, or efforts to enroll borrowers in mortgage relief programs improve.
  • The impact of the coming foreclosure wave will vary by region.

The article also states via the National Association of Realtors (NAR) that over last calendar year, the number of foreclosed homes has declined across the country. Distressed properties made up just 38 percent of US home purchases in January, compared with a peak of 49 percent in March 2009.

The article states that these factors have reduced the inventory of US homes on the market to a 7.8-month supply, which is down more than 11 months since July 2008. As prices continue to stabilize, the article further states that lenders may tent to take advantage of the situation by putting more of distressed properties on the market.

(full article here)

 Lets Look at South Lake Tahoe, CA :

First lets review January foreclosure sales:

  • Of the 34 total single family homes sold in South Lake Tahoe, CA this January, 11, 32%, were foreclosures (bank owned sales).
  • This is 6% less than the national average of 38% as found in the Washington Post article via the NAR .

Now lets look at the incidence of foreclosure sales in March 2009:

  • Of the 28 total single family homes sold in South Lake Tahoe, CA last March, 9, also 32%, were foreclosures (bank owned sales).
  • This is 17% less than the national average of 49% as found in the Washington Post article via the NAR.

We will track South Lake Tahoe inventory in our next post and compare that to the 7.8 months of national supply as stated above.

 The Bottom Line :
We are expecting more foreclosures to hit our South Lake Tahoe real estate market, though to be certain nobody knows, and we're not certain either, if we're going to see a greater percentage of foreclosure activity than we have already seen.

Here's a few things that give us cause to question that national predictions of more foreclosures may not appear as significantly here:

  • At present there is less incidence of foreclosure here in South Lake Tahoe than the national averages, both so far this year and last.
  • We're seeing more short sales than foreclosues (here), primarily due to lending banks realizing that they make more money from a short sale than they do for a foreclosure.
  • A new government program that will help some homeowners with short sales is due to start on April 5th (here).

 

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This entry was posted on Monday, March 15th, 2010 at 8:55 am and is filed under For Buyers, For Sellers, Foreclosures, Lake Tahoe Real Estate, National real estate news, South Lake Tahoe, CA, Stateline, NV, short sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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