The real estate market has been a wild ride for main stream consumers, however, those with their finances in order, this is a great time to be buying in the Incline Village Real Estate Market.  This is part 1 of 3 regarding some of the most frequent inquiries we have been receiving.

The first question we hear a lot is “how are home values holding up/where is the deal?”  Incline Village and Crystal Bay are unique in that there is not very much bare land available for building new homes.  Simply put we do not have the over supply problems that other metropolitan areas are seeing.  We do have homes on the market that are new and have not sold, but we attribute that more to the current real estate condition rather than the quality of the home.  In fact, Incline Village has many very fine properties for sale at prices that would be unheard of just three years ago.  Contact us at your convenience and we will gladly provide you with the best information on properties fitting your wants and needs.

In yesterday’s post, you will find the most up to date information on values and what is currently on the market.  The long story made short is that Incline Village and Crystal Bay are highly desired locations for home ownership.  Lake Tahoe is a world destination.  Check out this link on a recent survey of travel destinations.

To keep this post to the point, property values in Incline Village and Crystal Bay have seen some declines.  We are talking a much smaller percentage compared to the entire real estate market.  Some of the decline in overall values can also be attributed to properties that have been, simply put, overpriced.  The real estate market of 2003-2005 created situations where buyers would buy properties sight unseen and sellers only had properties on the markets for days.  This led to some property owners testing what the market would bear, thus some properties priced far above what comparable data would lead a real estate professional to price the home at.

Conclusion: There are some great buys in Incline Village and Crystal Bay.  A “low-ball” offer that cannot be justified by any other rationale than “to test if a seller is desperate enough”, really is not the advisable route.  Don’t forget, sellers here are quite sophisticated and that line of negotiating is not always recommended.  Lastly, in this market, whether a seller or buyer, use a real estate professional that is in this market full time.  We are seeing more change than we have in a long time and as always… remember it’s all about location, location location!

Have you been thinking about a home in Incline Village or Crystal Bay? It might make sense if you have the correct approach.

In part 1 of this series on buying a vacation home in Tahoe, we explored getting the best price and conditions that affect values You can click here to view that post. This post is going to cover the most arguably important aspects to real estate, location.

No matter the purpose of your purchase (i.e. personal residence, 2nd residence, or investment), you can rest assured that Lake Tahoe is a world destination and in a number of recent surveys, the most desired national location for vacationing. With the general location a sure thing, let’s move on to more specific location factors.

Accessibility: This post is focused towards 2nd home buyers, but applies to buyers planning to live here full time as well. Accessibility is a major component of location that lends itself to either help or hinder the resale of your property. Incline Village and Crystal Bay have Reno/Tahoe International airport just 45 minutes away making it extremely accessible from anywhere in the world.  It is true that the roads can get messy during winter storms, but feel comfortable knowing that the road crews in Lake Tahoe do a fabulous job and most roads are clear within a day (sometimes 2 days) after a solid storm. One of the best things about winter driving in Tahoe, is that we warm up during the day and have 300 days of sun.  That translates into the roads melting off after storms, so you have the snow and mostly dry roads. (Compare that to other resort areas where ice on roads stays for weeks or months at a time.) If you are not the winter type and only visit in the summers, the driving is great and the biggest challenge you might find is traffic on the smaller arteries on the really busy weekends. The accessibility of Incline Village and Crystal Bay will save you time being on vacation, not getting there!

Lakefront, view or no view? An important point to consider buying in Tahoe is what type of view you would like. Lakefront properties with shoreline are the highest priced and difficult to come by. We have seen a fair bit of turnover in that market lately, however, many of these properties are held within families for many years. This severely limits the number and choices you have regarding lakefronts. View properties are normally higher on the hill and further from the center of town. You can find stunning lake views, to tiny peaks of the lake, to mountain views, to one of Diamond Peak Ski Resort(our resident owned ski resort). If you want to be in the middle of town and a view is not a priority, there are many fine properties for sale without the premium of owning shoreline or having a stunning view. Did I mention golf course properties? Yes, we have it all-including 2 pristine, 18 hole golf courses. That yields to the question, how about a home on a fairway that is a 3 minute drive to Diamond Peak or 4 minutes to the Lake?

Privacy: Incline Village and Crystal Bay provide a blank canvas when it comes to privacy. We have great condominium areas and PUDs (Planned Developments) that have high density living if you enjoy the company of others. On the other hand, if you have a deep desire for solitude, we have properties that can put you on the edge of the forest where it is you and Mother Nature!

The choices are almost endless. The last topic on vacation homes is what to do with the property when you are away?

This is the last in a series of three articles relating to the vacation home market here in Incline Village and Crystal Bay. The first two articles covered the subject of market values and location specifics.

Here we are looking to cover the concerns and benefits of having a second home and what to do with it when you are away. The IRS has 5 basic premises to determine if you might be triggering a taxable event.  On the flip side, there are some definite benefits to renting out your property.

1. If you rent out your house for 14 days or fewer during the year, you are not required to report the income. A benefit here is that there is no maximum on the amount you may charge for rent. The house is considered a person residence so you deduct mortgage interest and property taxes like normal.

2. If you rent out your house for more than 14 days, you become a landlord in the eyes of the IRS. You will have to report the rental income and the upside is that you can now deduct rental expenses. It can get complicated because you have to keep track of the time used for personal and the time it is rented.

3. If you use the property for more than 14 days, or more than 10% of the number of days it is rented, whichever is greater, it is then considered a personal residence.  You can deduct can deduct rental income up to the amount of rental expenses, but you cannot deduct losses.

4. The definition of “personal use” days is not well defined. Personal use may include use by family members or yourself.  A less than clear definition of personal use includes donation of the home to charities or when you rent at a less than market rate.

5. If you limit your use to 14 days or 10% of the rented time, the property is considered a business and tax benefits increase.  You can deduct expenses against income and possibly deduct losses up to $25,000 each year.  Once the home is at this tax level, you are allowed to differentiate your time spent at the property between leisure and maintenance.  Days spent at the property for maintaining the property do not count as personal use.

For disclosure purposes, it is important to note that we are not investment advisers nor tax specialists. The statements above are summarized from information provided by the IRS.  Any opinions herein are as licensed real estate brokers and we highly recommend contacting your CPA and/or investment professional for definitive answers.

Local news:

Last Saturday a fabulous event was hosted at The Tahoe Treasure property.  Rita Collidge rocked the house as the entertainment after a day filled with activities ranging from massages, pilates, yoga, reflexology and an endless supply of excellent food and wine. The hosts Ruth Page and Greg Walsh  their beautiful estate of 8.75 acres to 350 guests who gave their support to the new Carson Cancer center. The event was well organized. With a stage backing onto Lake Tahoe and a dance floor of green lawn everyone had the chance to shaking it up!   

Market Review: Residential

The second home market is feeling the pinch of slowed sales activity. One indication of the down turn is the closure and mergers of offices in town. This week another office closed its doors while another closed its doors and merged with a larger company. Another indication of tightening times is the number of real estate publications going out of business due to agents tightening their advertising budgets. Today the  calls off a magazine ad arefew and far between, the biggest response is from the Internet or newsletters.

Total number of listings including lots is just over 564 units.

Single family residences top out at 288 – 11 under contract of sale- 60 sold since January 2008

The largest inventory of homes for sale are found in the Lakeview subdivision with 33 homes, prices range from a low of $885,750 to a median of $2,343,625 to a high of $5,250,000 this link takes you to these three properties. The Lakeview and Millcreek neighborhoods are usually a draw for full time residents and second home owners who value the close proximity to the beaches. There have been 6 sales in Lakeview and 8 sales in MillCreek this year. The potential for appreciation is still solid in these areas. Several reasons include level lots with easier construction and many homes built in the 70′s to 80′s did not take advantage of maximizing a structures size so remodels and tear downs occur constantly in these areas. 

The Eastern Slope and Championship Golf Course have 29 listings for sale. The Eastern slope is prized for lake views, and the Championship course captures views across the beautiful course.  One Championship remodeled home worth a second look at $1,650,000 is: 361 Country Club Drive 

Homes priced between $1,400,000 -1,800,000 offer the largest inventory with  41 homes on the market, followed by 32  priced between $800,000 -$1,100,000. Located throughout the village.

The most popular price range for sales this year fell between $600,000 – $800,000 with 14 sales.

Followed by 10 sales between $800,000-$1,000,000 and 10 sales between $1,000,000-$1,200,000.

Condominiums

Listed for sale 189 units which gives buyer’s a healthy inventory to choose from. Competiton is running high in complexes with multiply listings. Sales are down with only 38 closings year to date.

Planned unit developments

 Another great value can be found in PUD’s which work well for second homeowners not wanting to deal with exterior and ground maintenance issues. There are  71 listings which run from a cute chalet off College Blvd below Hwy 31 to  The Glen  a  Zayler built development with an excellent location ( walking distance to the recreation center, village green, tennis facility and ski beach). If you are looking for more privacy, new construction and ski resort setting 1349 Valais is another consideration.

The weather has been exceptional and since family outings are quickly coming to an end with school starting on Monday we accomplished finding quality family time. Our one daughter will be a senior this year and looking forward to finally arriving into the upper classman status. Our second daughter is off to Arizona to attend college.

We took this weekend to enjoy the last lazy days of summer which included a long boat ride, swimming at night under the full moon, hiking the trails at Diamond Peak Ski resort and appreciating each other. We can still laugh at and with each other and feel comfortable when the conversation drops and we all just fall into a relaxed silence.

This year has brought such uncertainty on so many levels. There is no time in history to look back on and take stock that “this to will pass” it did then and it will again. This is simply not the case and there is no crystal ball to predict when and if our economy will get back on track.

As summer moves forward, the peak season for vacationers to come visit Lake Tahoe, looking excitedly for a second home has taken a serious slow down. Living in a beautiful second home market such as “Incline Village, NV”. Lake Tahoe is world known as a destination resort offering year round activities. Because growth is limited existing homeowners enjoyed appreciation due basically to supply and demand. The land values in many cases surpassed the house value making it an ideal tear down and rebuild opportunity. This was the case for many speculative builders from 2000 and 2004. Large homes (5000 sq ft +) were in high demand and a booming business. Today there is an abundance of new construction sitting on the market priced between $2 to $10 million with square footages ranging from 8,000 to 12,000. The demand has dropped off significantly for these homes. Offering opportunities for buyers who may have considered this out of their range before to take a second look.

Here are several in this category:is no longer for the biggest houses. and builders are holding inventories inching down on prices with drops up to $600,000 on a $8.5 million dollar home.

Homeowners within Incline Village tend to be affluent enough to afford a second home and tend to pay cash or go for easy qualifier loans. Today you will find many sellers offering financing options to eliminate the lender all together.

Today’s buyers are “end users’ not speculative home buyers who are looking to capture a quality experience of sharing time with family and friends. Second home market prices are coming down and inventories going up. Over the years with each year bringing a newly defined buyer group from- Dot comer’s baby boomers, newly retired to name a few. The buyers we are finding are those looking for a good value who’ve wanted that second home but it was just out of their reach. Buyers who thought a second home was out of reach are coming onto the forefront. They are cautious buyers who need a lot more time and patience versus previous buyers. Gathering information and making multiple visits is part of the buying cycle.

Not a market for new or hungry agents.

Just as lenders and title companies are closing down so many agents are starting to consider a new career path. You have to have the financial strength, patience and excitement to be in this business. It can be difficult to muster up confidence when you haven’t put a deal together in a year or two.

Buyers are smart to look for experienced representation in a Broker who:

Knows the area, is a full time broker and resides in the area, understands the nuances of each neighborhood and can give you a history on properties. Understanding your needs, comfort zone in price are all , can walk you through governing boards and HOA data.

When you start your investigation of property, how can you confirm the agent you have contacted is experienced and qualified to take you through the buying process. Many times, the first contact is filling out a request for data from an internet web site. The person responding can be an assistant or a new agent you really don’t know.

Experience in this business and in particular, our area is a must! I understand the adage that we all must start somewhere, but as a client investing half a million to several million you don’t want to be the first client.  We only hire experienced agents at Lakeshore Realty for this very reason.  Educating buyer’s is a top priority.

Understanding: Pricing, locations, building restrictions, zoning, governing agencies, taxes, amenities and so much more.

A buyer needs to understand what our market offers and the solid investment opportunity it offers.  So much time goes into educating a buyer to the different neighborhoods, pricing, local governing agencies and their various regulations all add up to keeping a buyer in a safe environment

You can ask the agent how many sales they have been involved with over the last 3 years.

In our particular location, Incline Village, Lake Tahoe, Nevada you want to know you have a seasoned broker working with and for you. Our area is so unique with has so many nuances from tearing down a house and rebuilding to investigating a home owner’s associations status are so complex, it is easy to get lost in the “red-tape”.

In this Buyer’s market there are many agents who are not interested in listings. They can’t afford the price of advertising and marketing a property in this slow market.  Ask the agent you are considering how many listings they have and how often do they work with seller’s versus buyer’s.

Certain agents tend to gravitate towards buyer’s versus seller’s.  This can vary based on the type of market – “buyer’s or seller’s”.  With a buyer’s market, agents have to be prepared to market a home aggresively for 6 months which is the average time it takes to sell a home. This adds up to thousands of dollars and no guarantee of a sale.

Agents who have been in the business a number of years are known for listing responsibly versus buying a listing.  Listing responsibly can equate to telling the truth about the fair market value.  Seller’s and listing agents can do their best to price a home, yet in the end the buyer will be the ultimate decision maker.

The volume of sales in the first half of the year are down compared to last year. The good news that we can report is that values are holding up and we are not seeing large declines in overall residential values.

You can click twice on any of the images below to read them on your screen. If you would like a printable copy, please follow this link: 1st Half 2008 Residential Update

The first half of 2008 saw a steady flow of condominium properties listed for sale. However, actual sales have been sluggish. Because of this, we cannot stress the importance of pricing your property correctly and having experienced brokers representing your property.

You can click twice on each image to read it on your screen.  If you would like a printable copy, please follow this link: Printable Condo Update