Incline Village at Lake Tahoe, Nevada Real Estate and Community News

Nov. 15, 2017


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Posted in Community News
Nov. 15, 2017


Posted in Community News
Nov. 15, 2017



How much snow will Tahoe receive this year? It’s a question on everybody’s mind. Forecasters are already posting their predictions while the rest of us are taking bets. Will we receive another epic record year of 573 inches? Will it be an average year? (Tahoe’s average snowfall is 409 inches.) With all of the talk there is one thing for certain: winter is coming. So let’s talk about skiing, resorts and all the reasons we visit and live in the Tahoe Sierra.


Auburn Ski Club Training Center

Opens Nov. 18

Auburn Ski Club Training Center offers multi-discipline winter sports programs and affordable winter activities. With a full range of programs and facilities for alpine skiing, Nordic skiing, snowboarding and biathlon, the ASC Training Center on Donner Summit provides a one-place-fits-all solution for families looking for top-notch and affordable winter recreation opportunities. The Center includes a 6,000-square-foot winter sports facility, a 25 km cross-country center and a competition venue.

With roots in ski jumping that date back to the club’s founding in 1928 at Cisco Grove, the center has evolved to become a premier training center that offers ski racing and a premier snowboard training center. Junior programs for 6 to 18 year olds and adult programs are available. Anyone that is in a downhill ski program also receives a Boreal ski pass. |


Boreal Mountain Resort


With six lifts and 41 trails, Boreal is renowned for its state-of-the-art terrain parks and is the home for Woodward Tahoe, which fosters lifestyle and action sports progression through daily programs and week-long camps. The Playland snow tubing area offers additional fun on the hill.

Boreal and Woodward Tahoe recently launched the largest solar PV system in the California ski industry. The resort has expanded its base lodge and the eatery offers guests a new dining experience with grass-fed burgers, artisanal French fries and more vegetarian options.

Look for the Burton Qualifier on Jan. 27 and the Boreal Banked Slalom on March 10 and 11. As well, Boreal will introduce a Spring Music Series this season. |


Diamond Peak Ski Resort

Opens Dec. 14

Diamond Peak has announced new improvements for the upcoming ski season including a new terrain park on the Lakeview run, more perks for season passholders, increased snowmaking productivity and a new program highlighting the resort’s history and natural beauty. There will also be on-mountain interpretive ski and snowboard tours.

Terrain park skiers and riders looking to progress his or her park skills will have a new, beautiful venue to practice in as Diamond Peak is relocating the small to mid-sized progression park from Popular to the Lakeview run. The benefits for riders include an incredible Lake Tahoe backdrop, plus the ability to quickly ride laps in the park when the Ridge chairlift is running. Accessible via the Crystal Express and Ridge chairlifts, the new Lakeview terrain park will offer creative features and a flowing layout focused on maximizing fun, building confidence and preparing safely for Diamond Peak’s larger features in the Spillway terrain park. |


Donner Ski Ranch

Opening TBA

Exciting things are happening at Donner Ski Ranch as the resort has added two terrain parks this season. The resort has purchased two new snowcats this year: one for trail grooming and the other for terrain park grooming.

DSR also welcomes Day Franzen as its new general manager. Franzen has an extensive background in terrain parks. In addition they’ve hired a new chef who has created a new menu and the Lytton Lake Lodge is open seven days a week from 11a.m. to 9 p.m.

Historic and iconic, Donner Ski Ranch is a family-friendly resort that features a variety of terrain, where skiers and riders of all abilities can enjoy this mountain oasis. With one of the highest base elevations in the Sierra, Donner Ski Ranch boasts incredible powder, along with aggressive high-mountain and backside terrain. The resort offers easy access to novice runs, offers group and private ski and snowboard lessons, equipment rentals and a tubing park. |


Granlibakken Tahoe

Opens Dec. 15

Granlibakken Tahoe is an excellent learning slope for beginning skiers and riders. Affordable lift tickets and group lessons are offered Fridays through Mondays. Granlibakken’s popular sled hill offers winter fun for guests and locals alike and is open daily.

For those who enjoy the uphill as much as the downhill, Granlibakken offers 74 acres of trails to explore by ski or snowshoe. There is easy access to Page Meadows or the Tahoe Rim Trail for those who wish to explore Tahoe’s snowy back country. |


Heavenly Mountain Resort

Opens Nov. 17

Heavenly is the only ski resort in North America to span two states. The resort allows skiers and riders to experience the absolute best of both California and Nevada terrain.

With 4,800 acres of off-the-grid terrain and incredible views of Lake Tahoe combined with high-energy on-mountain experiences and nightlife, Heavenly offers an amazing resort experience. With customized on-demand ski and ride school lessons and GoPro Ski and Ride School lessons, Heavenly takes ski and ride school to a new level.

The Tahoe Mountain Lab On-Mountain Co-Working Space offers a place to work when not on the hill. Vail Resorts has committed to a zero net operating footprint by 2030. This includes zero net emissions, zero waste to landfills and zero net operating impact on forests and habitat. |


Homewood Mountain Resort

Opens Dec. 8

Homewood Mountain Resort offers a host of options for all levels of skiers and boarders. Wide-open beginner runs near the base area, hidden powder stashes in the trees and multiple terrain parks are just a few of the adventures waiting on this hill.

Located on the West Shores of Lake Tahoe, the views from the slopes are awe-inspiring. Expanded terrain offerings include terrain parks and back-country skiing and riding with Snowcat Adventures.

Homewood is implementing environmentally conscious snow grooming technology, new season pass perks and a new Web site that makes trip planning easy. Passholders will also receive access to Silverton, Brundage and Red Lodge Mountain. Homewood will also participate in the Tahoe Fund’s Green Bucks program to support the efforts of the Tahoe Fund and the Truckee River Watershed. |


Kirkwood Mountain Resort

Opens Nov. 22

Magical, raw, expansive and remote, Kirkwood is the stuff of legend. With some of the deepest, driest snow around and some of the most diverse and challenging terrain, Kirkwood offers big mountain riding with small town attitude.

Explore 2,000 feet of vertical drop and more than 2,300 acres of terrain from calm groomed beginner runs to hair-raising cornices, cliffs and the highest angle grooming around, there’s something for everyone at the ‘Wood.

Safety and avalanche education allows skiers and riders to hone in on his or her skills while navigating Kirkwood’s signature chutes, cornices and bowls. American Institute for Avalanche Research and Education (AIARE) classes, along with women’s clinics and camps are offered on the mountain, along with guided excursions into the back country through Expedition: Kirkwood. |


Mt. Rose Ski Tahoe


Following a record-setting season that extended until Memorial Day, Mt. Rose Ski Tahoe was the first resort to open in the Tahoe Sierra for the 2017-18 season on Oct. 27 and 28.

Mt. Rose invested more than $2 million this year in capital improvements. The resort introduces MAGIC, a modern, dual conveyor surface lift in an enclosed gallery that is designed to offer an enhanced experience for beginners and children with unprecedented access to Mt. Rose’s learning terrain and protection from the elements.

Additional projects include expanded snowmaking and snow grooming capabilities, and facility upgrades at the Winters Creek Lodge. Additional snowmaking at the top of the Blazing Zephyr 6 lift allows snowmaking on the Return to Rose trail. The increased capacity will allow the Slide Bowl side of the mountain to open earlier, giving skiers and riders access to more of the mountain earlier in the season. Pole Cat snow machines will be installed in the Enchanted Forest Area, just above the Wizard loading station, and on the Lower Lakeview trail to enhance early season snow coverage and terrain access.

Mt. Rose boasts the highest base elevation in Lake Tahoe at 8,260 feet. With panoramic views of Lake Tahoe, Reno and the Carson Valley and plenty of varied terrain for all skiers and riders, Mt. Rose is a must-ski location. |


Northstar California

Opens Nov. 17

Boasting 2,280 vertical feet and 3,170 acres of skiable terrain, skiers and snowboarders can begin the day at sunrise at Northstar with First Tracks this season, where mountain guides take two groups on a tour of the mountain before lifts open to the public and offer private access to freshly groomed runs across the entire mountain.

This year skip the lift lines with the Platinum Piste experience where skiers and snowboarders with Platinum Passes have access to the exclusive, location-rotating run offered on Saturdays, experiencing the best conditions throughout the day.

The Epic Local Pass offers skiers and snowboarders unlimited access to Heavenly, Northstar and Kirkwood in Tahoe, Park City Utah, Breckenridge, Keystone and Arapahoe Basin, as well as 10 days at Whistler Blackcomb, Vail, Beaver Creek and Stowe Mountain Resort. |



Opening TBA

Since 1946, Sierra-at-Tahoe has been shoveling out fun for the entire family. Sierra has expanded its learning environment and features Smart Terrain, a designated, sculpted terrain that fosters an elevated learning curve so guests can progress more efficiently and gain confidence in the sport.

Olympic gold medalists Jamie Anderson, Maddie Bowman and Hannah Teter train at Sierra as they prepare for the 2018 Winter Olympics in South Korea.

The 320 acres to the east of Grandview Express known as Huckleberry Canyon offer accessible, pristine back-country terrain that winter dreams are made of. There is plenty of great tree skiing on this hill.

Passholder perks include bring a friend for free on select Fridays and the Powder Alliance with three free days at La Parva in Chile or Bogus Basing in Idaho along with 14 other resorts to complete 48 days of free skiing at some of the best powder stashes in the West and around the world. |


Sky Tavern Ski Area

Opening TBA

Sky Tavern Ski located on the Mt. Rose Highway is one of the oldest nonprofit ski and snowboard training facilities in America. Since 1948, tens of thousands of kids have been taught skiing and snowboarding with some going on to greatness as members of U.S. Ski Teams. Tamara McKinney and Reno’s first Olympic Gold Medalist, David Wise, both got their skiing starts at Sky Tavern.

Best known for the Junior Ski Program, a volunteer-staffed program, operating during the winter on weekends with the parents helping for a few hours. Certified ski and snowboard instructors and coaches that oversee all training. Lessons range from first time on the snow to advance all mountain and alpine racing. Sky Tavern may best be described as a co-op where parents and other adults run a training ski area for the kids. The ski area is not open for public use of the runs, but the programs are open to everyone. |


Soda Springs Resort

Opening TBA

Founded in 1935, Soda Springs is California’s oldest continuously operating ski resort. Welcoming, relaxed and perfect for families new to snow, Soda Springs offers 15 runs serviced by five lifts. Young folks love Planet Kids, a dedicated snow play area designed for children ages 8 and older, featuring snow tubing, snow volcanoes to climb and the Woodward Experience ski and ride program. The new spin on snowsports includes Woodward experience zones with new snow terrain in the resorts StartPark, an innovative way for people to learn to ski and snowboard. Soda Springs’ snowmaking system uses 100 percent recycled water. In addition, the resort renovated and upgraded its lodge this year.

Soda Springs hosts its Snowball Festival from Dec. 8 to 10 and Dec. 15 to 17. The 35thannual Tom Sims Retro Worlds makes its way back to Soda Springs as the longest running snowboard event in the industry. |


Squaw Valley | Alpine Meadows

Opens Nov. 17

Following record-breaking snowfall last season and the resort’s latest-ever closing date of July 15, Squaw Valley Alpine Meadows resort has invested $4 million in snow safety tools and training and is hiring more staff. The resort also announced its plan to install a base-to-base gondola connecting the Village at Squaw Valley and the base area at Alpine Meadows. The freshly branded California Express gondola is targeted to open for the 2019-20 season. |


Alpine Meadows

The lodge at Alpine Meadows saw improvements this season including eight new automatic sliding doors for easier entry from the sun deck into the mezzanine level of the building. An overhaul of several air compressors for a more efficient use of resources when making snow, along with new state-of-the-art avalanche control equipment will support the resorts efforts to keep the mountain safe and maintain Alpine Meadows Road.


Squaw Valley

At Squaw Valley new things abound. The season welcomes a new trail name, Secret Garden, for Squaw Valley’s competition mogul course, a partnership with Genting Resort Secret Garden in China and Squaw Valley Alpine Meadows’ heightened engagement in the fast-growing Chinese skier market. The resort also added Niseko to the Mountain Collective pass.

For the first time in nearly 40 years, the NASTAR National Championships returns to Squaw Valley from March 21 to 26. Team USA celebrates the Olympic and Paralympic Winter Games with a stop at Squaw Valley on Jan. 13.


Sugar Bowl Ski Resort

Opening TBA

Sugar Bowl is ready for winter and the resort caters to folks that love the authentic alpine downhill ski experience.

Sugar Bowl has made more than $3 million in improvements this year with enhanced services with the kids ski & board school, snow removal, grooming, lift operations, and food and beverage upgrades. Four new snowcats have been acquired to maintain high-quality snow surfaces: two winch cats will provide cable-assisted snow grooming capabilities that are essential for steep terrain and two additional snow cats have the capability of free-grooming and sculpting terrain park features. Sugar Bowl snow removal fleet will make it easier for skiers and snowboarders to get to the resort improving maintenance of Old Highway 40. |


Tahoe Donner Ski Resort

Opens Dec. 8

Summertime trail maintenance will allow additional tree skiing off Eagle Ridge Chair on the backside of the ski resort and allow for earlier operations in lower snow conditions, providing a safe and enjoyable experience for skiers and riders. Tahoe Donner Ski Resort complete renovation of the outdoor sundeck located at the base area lodge was completed over the summer. |

Posted in Community News
Nov. 15, 2017


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.

Posted in Buying a Home
Nov. 15, 2017


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

Posted in Buying a Home
Nov. 3, 2017


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)

Posted in Real Estate News
Oct. 26, 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.

Posted in Community News
Oct. 23, 2017


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)

Posted in Real Estate News
Oct. 17, 2017


Debunking Zillow’s Zestimate W hen looking to buy or sell a home, many turn to the Seattle-based website 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.”

Posted in Buying a Home
Oct. 17, 2017


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)

Posted in Real Estate News