With housing inventory lower than before, more people are looking at condominiums (“condo”) and townhomes when shopping for a new home. Most condos and townhomes are part of a homeowners’ association (“HOA”). HOAs are organizations in a subdivision, planned community or condo that make and enforce rules for their properties. Here are seven facts to help you understand HOAs better.

Membership is mandatory. When purchasing a home tied to a HOA, you are obligated to be a member of that HOA. You are also responsible to pay monthly or annual HOA fees for the upkeep of common areas and building maintenance costs. Common areas may include parks, tennis courts, elevators or swimming pools.

Learn about the CC&R. HOAs have guidelines that all residents must follow. These guidelines are called covenants, conditions and restrictions (“CC&Rs”). It helps to pay particular attention to rules regarding fines, especially whether the HOA can foreclose on your property for nonpayment of dues or fines resulting from CC&R violations. Some HOAs may impose penalties for breaking HOA rules, and may require a member to either reverse the violation by action or pay a fine.

Fees will differ in each community. Each HOA is different, so asking your HOA the following questions will give you an idea of the fees in your community:

How are HOA fee increases set?

How often do increases occur, and by how much have they been raised each year?

Is it possible to see a printed history of HOA dues each year for the last 10 years?

How large is the HOA’s reserve fund?

What do monthly dues cover?

Look at minutes from the last HOA meeting. HOA meeting notes will go over current and past conflicts of the property, what processes are used to resolve these conflicts and if the HOA has ever sued anyone.

Find out the catastrophe insurance the HOA has on the building. This is important if the home located in an area prone to floods, earthquakes, blizzards, fires, tornadoes, hurricanes or any potential type of natural disaster.

Consider the impact of HOA fees on your financing. Be sure to know your HOA fees when applying for financing.

Most HOA are incorporated and are subject to state laws. Each HOA will have a board of directors that are elected to enforce and oversee the HOA governing documents, which are governed by state law.

Mortgage rates fell today, largely in response to the past two days of bond market improvement. In other words, lenders had been keeping their guard up ahead of today's key inflation data (The Consumer Price Index, or "CPI"). While it's true that a strong CPI report had the potential to push rates back to the highest levels since this summer, today's data wasn't strong enough. In fact, most of the metrics were roughly in line with forecasts.

Still, the strength and resilience in bond markets shouldn't be discounted. Bonds also digested strong Retail Sales data and managed to maintain stronger levels achieved overnight. In general, "strength" in bond markets translates to lower mortgage rates, although there can be some lag between the two.

Most lenders continue quoting conventional 30yr fixed rates in the 4.0% range, but today's improvement brings some of the aggressive lenders back down to 3.875% on top tier scenarios. Most borrowers will simply see today's improvement in the form of lower closing costs (or a bigger lender credit) on the same rates quoted yesterday.

With the inflation data out of the way, there is less immediate risk in the coming days. That said, rates have yet to commit to a strong move below their best recent levels. That means locking and floating should still be approached cautiously, but perhaps with slightly more room for optimism compared to the beginning of the week. Whatever the case may be, the potential for a bigger move in the near future remains, but the odds have evened out a bit as to the direction of that move.

Today's Most Prevalent Rates

30YR FIXED - 4.0%

FHA/VA - 3.75%

15 YEAR FIXED - 3.375%

5 YEAR ARMS - 2.75 - 3.25% depending on the lender

While home construction data suffered storm damage in September, New Home Sales broke free and soared. Gross Domestic Product also flexed its muscle.

The Commerce Department reported that New Home Sales surged 18.9 percent in September from August to their highest level since October 2007. This was the largest monthly gain since January 1992! Sales came in at 667,000 units versus the 555,000 units expected, and they were up 17 percent when compared to September 2016. Currently, there is a five-month inventory of new homes for sale on the market, down from six months in August. A six-month supply is seen as a healthy balance between supply and demand.

Gross Domestic Product (GDP) grew by a solid 3.0 percent in the third quarter of 2017, according to the first of three readings released by the Bureau of Economic Analysis. This follows the strong showing in second quarter, when economic activity increased 3.1 percent. Consumer spending, which makes up nearly two-thirds of economic activity, increased 2.4 percent after increasing 3.3 percent the previous quarter. GDP is the best way to measure a country's overall economic health and includes the total value of finished goods and services produced within a country's borders in a specific timeframe.

Finally, home loan rates remain in attractive territory despite recent Stock market rallies that pushed Mortgage Bond prices down.

If you or someone you know has questions about home financing or home loan rates please contact me. I'd be happy to help.

Forecast for the Week

After September job growth was stifled by hurricanes, the October Jobs Report is poised for a rebound.

Economic data kicks off on Monday with Personal Income, Personal Spending, and the inflation-reading Personal Consumption Expenditures.

Tuesday is fully loaded with the Employment Cost Index, S&P/Case-Shiller Home Price Index and Consumer Confidence.

Look for manufacturing news with Chicago PMI on Tuesday and the ISM Index on Wednesday.

Also on Wednesday, the ADP National Employment Report and the Fed's Monetary Policy Statement will be released.

Weekly Initial Jobless Claims and Productivity numbers come out on Thursday.

The big headliner on Friday is the Jobs Report for October, which includes Non-farm Payrolls, Unemployment Rate, Average Work Week and Hourly Earnings. The ISM Services Index also will be released.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bond prices slipped recently. Home loan rates remain in attractive territory.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 27, 2017)

Oracle Corp. co-founder Larry Ellison has been given the go-ahead to purchase the property for $35.8 million, U.S. Bankruptcy Court records showed. A bankruptcy court judge approved the sale to Ellison's Lawrence Investments on Monday, Oct. 16.

The Sacramento Bee earlier reported the agreement for the property, which was once owned by Frank Sinatra.

"We heard there was an interest from Larry Ellison," said Andy Chapman, president and chief executive officer of the Incline Village Crystal Bay Visitors Bureau, on Wednesday, Oct. 25.

"He was kicking the tires. Our hope, of course is the grand old dame opens up her doors."

The agreement marks yet another chapter in the storied history of Cal Neva, which straddles the California and Nevada border.

The resort was purchased in spring 2013 by Criswell Radovan, a Napa Valley-based real estate firm. The resort was then shuttered in September 2013 for a highly anticipated, multimillion-dollar renovation.

"With the reopening, there will be a rebirth … it will be a totally different creature," said Robert Radovan, co-owner of Criswell Radovan, and controlling partner of the property at the time.

"Our goal is to be the entertainment center of the North Shore. The Cal Neva has always been an icon of the North Shore. With a new look and a return to a four- or four-and-a-half-star hotel … we plan to bring it back to what it was in its heyday."

That heyday included the memorable era in the 1960s when the resort was owned by Sinatra, and frequented by the likes of the Rat Pack, Marilyn Monroe and members of the Kennedy family.

However, a series of delays over the years pushed back the grand reopening of Cal Neva to the point where it never happened. Then, in June 2016, Criswell Radovan filed for bankruptcy.

According to legal documents obtained by the North Lake Tahoe Bonanza, Criswell Radovan owed more than $27 million to creditors affiliated with the project, including $7 million to lead contractor The Penta Building Group of Las Vegas.

Originally built in 1926, Cal Neva includes 219 rooms and cottages, restaurants, a spa and open space featuring panoramic views of Lake Tahoe. The property also features a 350-seat show room, 16,000 square feet of meeting space, and a lounge.

Storms damaged data on Housing Starts and Building Permits from August to September, while Existing Home Sales edged higher.

Hurricanes Harvey and Irma put a dent in new home construction in Florida and southern Texas. The Commerce Department reported that total September Housing Starts fell 4.7 percent from August to an annual rate of 1.127 million units versus the 1.160 million expected. It was the lowest level since September 2016; however, from September 2016 to September 2017, starts were up 6.1 percent. Single-family starts fell 4.6 percent from August, although they were up 5.9 percent from September 2016. Multi-dwelling starts with five or more units saw a drop of 6.2 percent from August and a 7.9 percent rise over September 2016. Overall, the South saw a 9.3 percent decline in September, while gains were seen in the Northeast, Midwest and West.

Building Permits, a sign of future construction, fell 4.5 percent from August to an annual rate of 1.215 million units, just below the 1.225 million expected.

After three straight monthly declines, Existing Home Sales eked out a 0.7 percent gain in September to an annual rate of 5.39 million units, above the 5.29 million expected. September's sales pace is 1.5 percent below a year ago and is the second slowest over the past year (behind August). Ongoing supply shortages and the hurricanes muted overall activity and caused sales to fall back on an annual basis, according to the National Association of REALTORS®.

On a positive note, the October National Association of Home Builders Housing Market Index rose four points to 68, as homebuilders rebounded from the initial shock of Hurricanes Harvey and Irma. The Index measures sentiment among builders and any reading over 50 is considered a positive sign.

Finally, despite recent rallies in U.S. Stock markets that negatively impacted Mortgage Bond prices and the home loan rates tied to them, home loan rates remain near historic lows.

If you or someone you know has questions about home financing or home loan rates please contact me. I'd be happy to help.

Forecast for the Week

Find out if the economy is still flexing its muscles with the first reading of third quarter GDP. Economic data kicks off on Wednesday with the release of Durable Goods Orders.

Housing data comes from New Home Sales on Wednesday followed by Pending Home Sales on Thursday.

Also on Thursday, weekly Initial Jobless Claims will be reported.

Gross Domestic Product (GDP) will be delivered on Friday in addition to the Consumer Sentiment Index.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bond prices slipped recently. Home loan rates remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 20, 2017)

Debunking Zillow’s Zestimate W hen looking to buy or sell a home, many turn to the Seattle-based website zillow.com as a place to start their home search or to look for comparison pricing. While Zillow has empowered buyers and sellers to gather basic information about their home and other homes for sale in their market, real estate professionals warn that the estimates on properties generated by Zillow, called Zestimates, are unofficial and should not be considered a reliable fair market value. When trying to uncover the Zillow mystery, global real estate advisor Brian Hopper of Seattle’s Realogics- Sotheby’s International Realty explains the impor - tance of using this tool appropriately. “Zillow is used as a conversation starter before my clients call for a more accurate evaluation of their property,” he said. Sites like Zillow only give consumers information about a property that may be obtained from publicly available sources. The system uses an automated valuation model which leaves out numerous impor - tant factors that should be considered when a home is being appraised. For example, the system only accounts for basic property details and characteristics without considering addi- tional information about the home or possible recent home improvements. Zillow captures square footage and number of bedrooms and bathrooms, for instance, and uses a proprietary formula to predict a value based on other available market data such as assessed value or most recent sale price. Hopper disapproves of this pricing method. “There are so many variables that make properties unique that it is essential for an actual person to walk through the house and spend time seeing exactly what the property offers,” he said. “Zillow’s system doesn’t factor in the details of a home that can’t be seen by a computer, including the actual condition of the property and improvements made to the home.” Often there are location advantages to a property, such as proximity to a great neighborhood or school. On the flip side, there might be a detrimental quality to the location or condition of the home. If these are not detected by the Zillow algorithm, the actual value of the home could be signifi- cantly higher or lower than that of the Zestimate. Zillow also doesn’t distinguish between types of home sales, such as short sales or foreclosures. “I encourage my clients to use Zillow for their initial research,” Hopper con- ceded. “Frankly, people love to do their research when buying a home and they are welcome to spend that time getting information before they contact me and my team for an actual compari- son of properties,” he said, adding that it is essential for any buyer or seller to work with a real estate agent who can pull an actual compara- tive market analysis using their local MLS system. Zillow is aware of inconsis- tencies in their data. Per an article published in the Seattle Times on May 26, 2017, Zestimate home val- ues in the city were off by as much as $40,000, according to Zillow’s own data. Zillow has reacted to this feedback by launching a contest offering a top prize of $1 million to the team capable of developing a new, more accurate home algorithm. Finalists for this contest will be chosen in January 2018, and prizes will be awarded by January 2019. While the error rate varies by location, the Seattle mar - ket is not the only region wrestling with Zestimate flaws. Realtors in the Lake Tahoe/Reno region have seen inconsistencies as well. “Even Zillow acknowledges that realtors are better equipped at predicting sales prices, and this is especially true in resort markets like Lake Tahoe and Truckee,” said Brit Crezee, director of marketing at Sierra Sotheby’s International Realty. “Important features like views, homeowner ameni- ties, and proximity to the lake, ski resorts, golf courses, and open space are things that the Zestimate can’t factor into a home’s value,” adds Tahoe City- based real estate advisor Neil Morse. “The system might work well in areas with lots of common tract housing, but Lake Tahoe is largely comprised of custom-built homes and incredibly diverse neighborhoods.” As buyers and sellers rou- tinely rely on Zestimates for true market value, the process of buying and selling in our market can become distorted. If a house for sale has a Zestimate of $375,000, a buyer might challenge the seller’s listing price of $450,000. Or conversely, the seller might question a potential listing broker’s proposed $795,000 sale price when Zillow shows a value of $950,000. “To overcome disparities like these we’ll often refer clients to the Zestimates section located in small type at the bottom of the Zillow homepage. This is where people can find valuation error rates by state and county,” Crezee said. As of August 2017, Zillow’s reported median error rate for California’s Placer and Nevada counties are 3.3 and 3.9 percent, respectively. “With second quarter median sales price for single family homes in Tahoe Donner reported at $693,000, for example, that translates to a significant $54,747 value discrepancy,” Crezee pointed out. Hopper summarizes the Zillow conundrum, stat- ing, “Zillow is one point of data of many needed to review before getting a true valuation of a home. But in addition to the computer, the human factor is critical to determine realistic pricing.”

Consumers weren't afraid to spend in September after holding back in August.

Folks were spending in September, according to the most recent Retail Sales report issued by the Commerce Department. This was welcome news, as consumer spending makes up about two-thirds of the U.S. economy. Sales were up 1.6 percent from August, just below expectations, and up 4.4 percent from September 2016. Increases in gas, auto and building material sales led the way due to hurricane-related boosts. When stripping out autos, sales rose a solid 1 percent in September from August.

The Bureau of Labor Statistics reported that consumer inflation via the Consumer Price Index (CPI) jumped 0.5 percent in September from August, though this was softer than expected. However, the more closely watched Core CPI, which excludes volatile food and energy, was up just a meager 0.1 percent in September. This left year-over-year Core CPI at 1.7 percent for the fifth month in a row, meaning it still remains below the Fed's inflation target of 2.0 percent.

Wholesale inflation also ticked up in September as energy prices rose following Hurricane Harvey. The Producer Price Index (PPI) rose 0.4 percent from August, in line with estimates, while annual PPI jumped 2.6 percent, the biggest gain since February 2012. Core PPI, which strips out volatile food and energy, rose 0.2 percent as expected from August to September, while the annual Core PPI was up 2.1 percent.

The Federal Open Market Committee meeting minutes from August revealed the Fed said the economy is strong enough to withstand an increase to the Fed Funds Rate later this year. This is the rate banks lend to one another overnight. However, the Fed will be closely watching inflation readings and other key economic reports in the coming weeks and months, and it remains to be seen if any data will impact this decision.

At this time, home loan rates remain historically attractive.

If you or someone you know has questions about home financing or home loan rates please contact me. I'd be happy to help.

Forecast for the Week

Manufacturing and housing data dominate the week.

Regional manufacturing data from the Empire State Index will be released on Monday, followed by the Philadelphia Fed Index on Thursday.

Look for housing numbers on Wednesday with the release of Building Permits and Housing Starts.

The Fed's Beige Book will also be delivered on Wednesday.

As usual, weekly Initial Jobless Claims will be released on Thursday.

Existing Home Sales close out the week on Friday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bond prices got a boost in the second half of the week. Home loan rates remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 13, 2017)

3rd Quarter | Lake Tahoe, Truckee & Surrounding Areas

The Tahoe Sierra MLS reported a historic Third Quarter 2017 with more units sold than any other quarter on record for the Lake Tahoe / Truckee market.

Spanning a collection of diverse resort communities from the shores of Lake Tahoe to Reno and the surrounding foothills, these market trends can vary dramatically from neighborhood to neighborhood. Sierra Sotheby’s International Realty compiles quarterly micro market statistics from four different multiple listing services to help you better understand values, identify opportunities and make informed real estate decisions.

Follow the links below to review regional micro-market reports drilled down by neighborhood. If your community is not listed or you’re unsure what the data means for your situation, please don't hesitate to contact me. CLICK ON THE LINKS BELOW TO ACCESS DATA FOR YOUR AREA OF INTEREST

EAST SHORE | INCLINE VILLAGE | NORTH & WEST SHORE | RENO | SOUTH LAKE | TRUCKEE

Tree trimming on U.S. National Forest Service lands above Incline Village resumed last week, as workers aimed to remove excess vegetation that can feed wildfires and improve forest health.

The forest service said the thinning operations are expected to continue throughout fall until winter weather sets in for the season.

“(Mechanical cut-to-length) thinning involves using a harvester to cut the tree down, remove the limbs and cut the tree into sections in the cutting area,” the forest service said in a statement on Friday, Oct. 6.

The public is asked to avoid the area because of hazards posed by heavy equipment and falling trees.

“This forest thinning is part of the Incline Hazardous Fuels Reduction and Healthy Forest Restoration Project, which aims to treat nearly 4,000 acres on North Shore of Lake Tahoe to reduce the risk of severe wildfire, improved forest health, and provide defensible space to neighboring communities,” the forest service said.

Job growth plunged in September due to Hurricanes Harvey and Irma.

The Labor Department reported that payroll growth declined by 33,000 jobs versus the 75,000 increase in new jobs expected. July job growth was revised lower by 51,000 to 138,000, while August was revised higher by 13,000 to 169,000 new jobs. This was the first negative reading in seven years, but the numbers will most likely reverse higher in the coming months as Americans rebuild after the devastation in the hurricane-impacted areas.

All was not lost within the report, though. Hourly earnings surged by 0.5 percent from August to September versus the 0.2 percent expected. Earnings are up 2.9 percent year over year. In addition, the Unemployment Rate fell to 4.2 percent, the lowest level in 16 years.

Home prices continued to heat up right through summer. Data analytics firm CoreLogic reported that home prices, including distressed sales, rose 6.9 percent from August 2016 to August 2017, up from a gain of 6.7 percent annually in July. On a monthly basis, prices rose 0.9 percent from July to August. Looking ahead, prices are expected to rise 4.7 percent from August 2017 to August 2018.

At this time, home loan rates remain historically attractive.

If you or someone you know has questions about home financing or home loan rates please contact me. I'd be happy to help.

Forecast for the Week

Wholesale and consumer inflation and Retail Sales will capture attention at week's end. Bond markets are closed Monday in observance of Columbus Day.

The light economic calendar begins on Thursday with the Producer Price Index and weekly Initial Jobless Claims.

On Friday, Retail Sales, the Consumer Price Index and the Consumer Sentiment Index will be released.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bond prices stumbled recently as Stocks rallied. Home loan rates remain attractive and near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 06, 2017)