1st Quarter | Lake Tahoe, Truckee & Surrounding Areas

Lake Tahoe, Truckee and surrounding area real estate 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 specific neighborhoods.

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 here to view the report:

https://tahoerealestatediary.com/micro-market-reports/

Spring has sprung! It has been beautiful the past 10 days here in Incline Village, with temperatures in the 50's at lake level. A Winter storm is fast approaching with 2-4 feet of snow forecast for the higher elevations by Sunday. 2016-2017 may be the winter that never ends. Lake Tahoe is fast approaching its legal limit of 6229 feet. As of today it is at 6227.26 feet MSL .

Real Estate and Mortgage Rates - Last Week in Review and Forecast for this Week;

While 2016 Gross Domestic Product was anemic, consumers showed some strong spending in the fourth quarter.

Final fourth quarter 2016 Gross Domestic Product (GDP) rose to 2.1 percent from the second reading of 1.9 percent. This follows a 3.5 percent increase in the third quarter. For all of 2016, GDP rose an anemic 1.6 percent, the worst since 2011 and below the 2.6 percent in 2015.

There were some bright spots with the latest numbers. Consumer spending, which makes up two-thirds of economic activity, rose 3.5 percent from the previous reading of 3 percent. Corporate profits also were up 9.3 percent year over year, the most in four years due in part to a recovery in the energy sector.

In economic news, Consumer Confidence was also a bright spot, as it surged well above expectations. However, tight housing inventory remains a reality across much of the country, and is a key factor in rising home prices. The January S&P/Case-Shiller 20-city Home Price Index showed home prices rose 5.7 percent year over year, just above the 5.6 percent expected.

Inflation had a slight uptick in February from January but remained just below the Fed's target range of 2 percent. Core Personal Consumption Expenditures, which strips out volatile food and energy prices, rose 1.8 percent year over year in February, consistent with January's reading. The Fed would like Core PCE to reach, exceed and stay above 2 percent -- something it has not done in nine years -- before hiking the benchmark Fed Funds Rate more aggressively. If Core PCE stalls at current levels, it will be tough for the Fed to justify additional hikes, as these hikes are designed to stave off inflation.

Inflation is an important measure to watch because rising inflation reduces the value of fixed investments like Bonds. Since home loan rates are tied to Mortgage Bonds, home loan rates can improve when Mortgage Bond prices improve. The opposite is also true.

The good news is that Mortgage Bond prices have gained some ground recently, and home loan rates remain historically attractive for those in the market to buy a home.

If you or someone you know has any questions , please don't hesitate to contact me.

Forecast for the Week

March may log another solid month of job growth to wrap up the first quarter of 2017.

National manufacturing numbers in the ISM Index will be released on Monday followed by the ISM Services Index on Wednesday.

Also on Wednesday, FOMC minutes from the March Federal Open Market Committee meeting will be released.

Labor market data will come from Wednesday's ADP National Employment Report, Thursday's weekly Initial Jobless Claims, and Friday's closely watched monthly Jobs Report for March, which includes Non-farm Payrolls, the Unemployment Rate and Average Hourly Earnings.

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 Bonds have gained some ground after falling during the early part of March. While Bond prices have currently stalled, home loan rates remain attractive.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Mar 31, 2017)

Federal Reserve Chair Janet Yellen had one simple truth that was like music to Stock and Bond markets: "The simple message is the economy is doing well."

When the Fed expectedly raised its benchmark Federal Funds Rate 0.25 percent at its March 14-15 meeting, Stocks and Mortgage Bonds both improved following the news.

The Fed's tame read on inflation and its decision to maintain its balance sheet of existing Mortgage Bonds helped Bonds rally. Meanwhile, Stocks responded favorably to the news that the Fed is planning two additional hikes this year, eliminating some uncertainty.

The Fed Funds Rate, with a new target rate range between 0.75 to 1.0 percent, is the rate at which banks lend money to each other overnight and is not directly tied to consumer products like purchase or refinance home loans. Instead, home loan rates are tied to Mortgage Bond market performance. Home loan rates can move lower when Mortgage Bonds improve and vice versa.

There was good news from the housing sector, as the Commerce Department reported that Housing Starts hit a four-month high, rising 3 percent from January to February to an annual rate of 1.288 million. Housing Starts measure when excavation begins on a new home. Starts on single-family homes rose to a near 10-year high. From February 2016 to February 2017, Housing Starts were up 6.2 percent. The increase is a welcome sign for those in the market for a home as limited inventory has driven home prices up in many areas, discouraging some buyers. Another welcome sign: The National Association of Home Builders reported that its Housing Market Index, a measure of home builder sentiment, jumped six points to the highest level in 12 years!

In economic news, wholesale inflation came in hotter than expected in February, with the year-over-year Producer Price Index reading reaching 2.2 percent, the highest since March 2012. The Consumer Price Index was in line with expectations, falling in February from January to 0.1 percent due in part to lower gasoline prices. Retail Sales also met expectations, though they did decline from January.

For those in the market for a new home or a refinance, home loan rates remain attractive.

If you or someone you know has any questions, please don't hesitate to contact me.

Forecast for the Week

Housing news dominates the week. Will the positive momentum continue?

Housing data kicks off on Wednesday with the release of Existing Home Sales, followed by New Home Sales on Thursday.

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

The week rounds out with Durable Goods Orders 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 Bonds experienced a nice rebound following the release of the Fed's monetary policy statement. Home loan rates remain in attractive territory.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Mar 17, 2017)

The depressing scene of boat docks sitting high and dry on wide beaches around Lake Tahoe will likely be a fleeting memory this summer.

Winter's unrelenting storms built up a substantial Sierra snowpack and are expected to fill the lake for the first time in 11 years.

Many low-lying areas that were exposed when the lake level was declining during the drought will be inundated with water. The docks will be bobbing in crystal blue waters once again.

Straddling the California–Nevada border, Tahoe is the sixth largest lake in the United States, an outdoor playground for people around the world, and the main water source for the Reno-Sparks, Nevada, area. The renowned ecological wonder is fed by 63 tributaries that drain 505 square miles known as the Lake Tahoe Watershed. With a vast surface area of 191 square miles, Tahoe requires an immense amount of water to fill, especially because roughly 100 billion gallons of water evaporates annually.

Lake Tahoe's natural rim is at 6,223 feet above sea level. The lake can store an additional 6.1 feet in its reservoir and climbs up to 6,229 feet at full capacity, its legal maximum limit. The only outlet, a dam at Tahoe City, regulates the upper 6.1 feet above the low water mark, and this winter water is being released into the Truckee River as billions of gallons flow into the lake.

Tahoe's water level reached 6,226.84 feet on Wednesday, and the lake needs some 88 billion gallons of water to jump up the 2.26 feet required to be completely full. That's the equivalent of filling more than 133,000 Olympic-size swimming pools.

"We feel really good right now," said U.S. District Court Water Master Chad Blanchard. "We're releasing 500 cubic feet of water per second, and trying to manage the elevation. The elevation has been flat for a couple weeks, but we don't want to get too high because we have two-and-a-quarter feet of room. But we could still have as much as four to five feet of water to come into the lake in next five months. It's a balancing act. We have to fill, but we don't want to overfill. And the forecasts we get are just forecasts. They're not perfect."

If Tahoe reaches full capacity, as Blanchard expects the lake will do at the end of July, it would see its largest physical rise in recorded history going back to 1900.

Since the start of the rainy season on October 1, the lake level has shot up 4.5 feet. If the lake fills, it will rise a total of 6.5 feet, beating the 1995 record when it jumped up six feet in a single season, which runs Oct. 1 to Sept. 30.

This is a huge milestone for a body of water that flirted with record-low levels amid a five-year drought. At the same time last year, the lake level was a full 4.19 feet lower. This was discouraging in an El Niño year when storms expected to bring record-breaking snow and rain delivered only average precipitation, filling some reservoirs but making only a small dent in California's drought conditions overall.

This year is telling a different story as storms ceaselessly battered the Sierra Nevada in January and February. The Lake Tahoe Basin received 10 more inches of precipitation than any year in recorded history, going back to 1910. Because Tahoe has a large surface area, the precipitation alone provides a significant rise.

And then there's the Sierra Nevada snowpack. The range is piled high with the most snow it has seen in decades, and a recent survey on March 1 indicated the snowpack is 185 percent of average. As the weather warms, this snow will melt and pour billions of gallons of water into the rising lake.

And perhaps the most significant milestone is that the drought will be considered over in the Tahoe area.

"In the Truckee basin, drought is defined as water storage in Lake Tahoe," Blanchard said. "Tahoe is the defining factor. If we're full at Tahoe, the drought is over. Typically, we can get three year's worth of water from the reservoir part. Of course, that could vary in some freak extreme."

Its official. Mount Rose Ski Area has the most Snow in North America with almost 700 inches. The February Jobs Report had a lot to celebrate, including job and wage growth.

U.S. employers added 235,000 new jobs in February, above the 188,000 expected, the U.S. Bureau of Labor Statistics reported. Gains in construction and manufacturing, in particular, led the surge. While December's numbers were revised down and January's were revised up, combined revisions totaled 9,000 more jobs than previously reported.

The unemployment rate was 4.7 percent, down from 4.8 percent, and the Labor Force Participation Rate was at its highest in a year at 63 percent. Average hourly earnings rose by 2.8 percent from February 2016 to February 2017.

Overall, this was a robust report and likely means the Fed will raise its benchmark Fed Funds Rate at its meeting on March 14-15. This is the rate at which banks lend money to each other overnight.

In housing news, home price gains continued in January. CoreLogic, a leading provider of consumer, financial and property information, reported that January home prices, including distressed sales, rose 6.9 percent from January 2016 to January 2017. The gains were due in part to lean inventories of homes for sale on the market. From December 2016 to January 2017, prices rose 0.7 percent. CoreLogic's chief economist, Frank Nothaft, said, "Many markets have seen housing prices outpace inflation."

While home price gains are expected to continue, the sizes of the increases are expected to be less severe. Looking ahead, CoreLogic sees a 4.8 percent increase in prices from January 2017 to January 2018.

For those in the market for a new home, home loan rates remain attractive despite recent market volatility.

If you or someone you know has any questions, please don't hesitate to contact me.

Forecast for the Week

While the week is jam-packed with key economic reports, the March 14-15 Federal Open Market Committee meeting and release of the monetary policy statement will likely be the headline grabber.

Inflation data from Tuesday's Producer Price Index and Wednesday's Consumer Price Index will be dissected by Fed members at this week's FOMC meeting.

Retail Sales will be released on Wednesday along with the Fed's monetary policy statement.

Regional manufacturing numbers will be delivered in Wednesday's Empire State Index and Thursday's Philadelphia Fed Index.

On Thursday, Housing Starts and Building Permits will be released along with the usual weekly Initial Jobless Claims.

The Consumer Sentiment Index will be reported 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 Bonds struggled to gain traction recently. Home loan rates remain attractive despite Bond market losses.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Mar 10, 2017)

A CRS REALTOR® is a Certified Residential Specialist—one of the top 3 percent of real estate agents in the U.S. CRS agents have more experience and training than the average REALTOR® and they are part of a community of REALTORS® dedicated to improving the real estate industry for homebuyers and sellers everywhere.

Why Work With a Certified Residential Specialist Agent?

Buying or selling your home is one of the biggest and most important decisions you’ll make in your lifetime. You need someone you can trust by your side, who is looking out for your best interests and is willing to put all their knowledge and experience to work for you. You need a CRS.

Not all real estate agents are made the same: There are millions of real estate agents out there, and their experience and dedication to their profession and clients varies widely.

The threshold to becoming a real estate agent is surprisingly low. Requirements vary by state, but some ask for as little as 40 hours of training and few ask for more than 100 hours—compare that to the 1,000 hours that are typically required to become a hair stylist.

To become a CRS, however, REALTORS® must meet a number of stringent requirements that combine advanced hours of education and training, experience and success in the marketplace. A CRS agent adheres to a strict code of ethics that binds them to perform in the best interest of their clients at all times.

CRSs are required to have between 25 and 150 transactions and between 16 and 80 additional hours of education beyond what’s required of the typical REALTOR®.

These are agents who are invested in their careers, in buying and selling real estate and in making sure their clients are satisfied. CRS is the sign of a true real estate professional.

Don’t work with the rest, choose the best. Choose a CRS.

The Benefits of Working with a CRS Agent

· CRSs receive advanced training above and beyond what is required of typical agents

· CRSs have proven experience through logged transactions

· CRSs continuously improve their skills and learn about new regulatory developments

· CRSs adhere to an ethics code not required of other agents

Consumer Confidence hit the best reading since July 2001, while home prices and consumer inflation have also been on the rise.

Housing prices posted strong gains through the end of 2016. The S&P/Case-Shiller 20-city Home Price Index saw a 5.6 percent annual gain from December 2015 to December 2016, as low housing inventory continued to fuel rising home prices. Within the index it showed that Seattle, Washington; Portland, Oregon; and Denver, Colorado had the largest year-over-year gains.

Pending Home Sales, which is a future-looking indicator based on contract signings, were down a disappointing -2.8 percent in January, below the 0.9 percent expected, per the National Association of REALTORS®. December Pending Home Sales also were revised lower to 0.8 percent from 1.9 percent.

In economic news, the second reading of fourth quarter 2016 Gross Domestic Product (GDP) matched the first reading of 1.9 percent, just below the 2.1 percent expected even though consumer spending surged. GDP is the value of goods and services produced by the nation's economy and it's considered one of the broadest measures of economic health.

Inflation data ticked up in January as Core Personal Consumption Expenditures (PCE), which strips out volatile food and energy prices, rose 0.3 percent from December. The headline PCE index (which includes food and energy) rose to 1.9 percent year over year, the biggest 12-month gain since October 2012.

Higher inflation can take a toll on Mortgage Backed Securities, reducing their value and negatively affecting the home loan rates tied to them. The record high Stock rallies experienced with the Dow, NASDAQ and S&P 500 also weigh down Bonds.

For those in the market for a new or existing home, home loan rates remain in historically low territory despite recent market volatility.

If you or someone you know has any questions , please don't hesitate to contact me.

Forecast for the Week

What direction will the 2017 job growth trend line go after a strong start in January?

Economic news kicks off on Wednesday with the ADP National Employment Report and Productivity numbers from the fourth quarter of 2016.

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

On Friday, look for the Jobs Report for February, which includes Non-farm Payrolls, Average Hourly Earnings, the Unemployment Rate and the Average Work Week.

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 were driven downward recently as Stock markets posted record highs. Despite the volatility, home loan rates are still in attractive territory.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Mar 03, 2017)

It was another good week for the Incline Village real estate market. 5 properties went into escrow on the Incline Village Multiple Listing Service. That was complemented by 6 new listings, 3 price changes and 5 properties closing escrow. Sales totals early in 2017 are similar to the same time in 2016. But, a lot more condos have sold this year which offsets the decline in closed escrows for houses. It’s too early in the year to make any predictions especially since most of the properties that have closed escrow went under contract late in 2016. On the surface though it looks like we will see at least 350 sales in Incline Village this year.

There is an extreme shortage of condos for sale with only 36 condominiums currently listed on the Incline Village MLS. There are 14 condos in Escrow.

Also with a low inventory are Single Family Homes, with 105 properties on the market. There are 17 homes in escrow

MINIMIZE WHAT YOU'LL OWE AND MAXIMIZE WHAT YOU'LL GET BACK AT TAX TIME.

People are always making moves (real estate and otherwise) to minimize what they owe and maximize tax returns. But understanding if you’re eligible for tax breaks can be daunting. The tax code is 4 million words and more than 70,000 pages long.

To ensure you’re not missing out on any hefty tax breaks, consider these three common home–related tax breaks that are often missed, overlooked, and underused.

While it’s easy to focus on federal income tax deductions, some state tax rates can reach as high as 15 percent of your annual income!

In the past year, homeowners have taken steps to improve their home’s energy efficiency for a variety of reasons, including cash savings on utility bills.

The good news: Many of those improvements are eligible for state, county, and/or city tax credits — or tax breaks. If you’ve installed dual-paned windows, insulation, low-flow plumbing appliances, tankless water heaters, or solar panels last year, dig up your receipts.

Then talk with your tax preparer or visit your state, county, and city government websites to research tax advantages for which you might already be eligible.

Many homebuyers expressly call out the mortgage interest tax deduction as a major motivation behind their desire to own a home. The ability to write off interest on up to $1 million of mortgage debt shifts the affordability equation and makes buying more financially compelling than renting for thousands of homeowners every year.

According to the American Institute for Economics Research, only about 63% of homeowners itemize deductions — a prerequisite to taking the mortgage interest deduction and its cousin, the property tax deduction.

This isn’t always because owners are unaware of potential savings. There’s a number of people whose income tax liability is simply so low that itemizing their tax deductions doesn’t add up. Low tax liability means that some people’s holistic financial picture, including earned income and deducted mortgage interest, renders a larger standard deduction than the tax break they would receive by virtue of the mortgage interest and other itemized deductions.

However, many homeowners who are eligible for itemizing don’t fully appreciate what they stand to gain or simply don’t feel up to the task of determining whether they have sufficient non-mortgage-related deductions to itemize, so they do their own taxes and take the standard interest deduction to minimize the work.

If you have a high mortgage or property tax bill, it might be obvious that itemizing makes sense. But if not, you owe it to yourself — and your bank account — to at least try working with a tax preparer or committing to spend the time and energy it takes to explore the question of whether itemizing makes sense.

Even an extra thousand dollars or two in tax savings can make a huge difference to your savings and your financial future.

Normally, defaulted mortgage debt that is forgiven through a foreclosure, short sale, deed in lieu of foreclosure, or settlement via partial payment is actually charged to a taxpayer as income. It’s called cancellation of debt, or COD.

Under the 2007 Mortgage Debt Forgiveness Relief Act, though, the IRS has temporarily exempted COD from incurring income tax liability for as many as 100,000 homeowners a year, to avoid penalizing homeowners for these sorts of settlements and resolutions to upside-down home mortgages.

The Act was initially set to expire in 2013, but was extended through 2016.

If you were able to close a short sale or settle a defaulted home loan in 2016, chances are good that you are eligible to take advantage of the COD tax break when you file your 2016 return.

State and local tax breaks for green home improvements

Mortgage interest tax break

COD tax exemptions

- See more at: https://www.trulia.com/blog/3-often-overlooked-real-estate-tax-breaks/?ecampaign=con_cnews_digest&eurl=www.trulia.com%2Fblog%2F3-often-overlooked-real-estate-tax-breaks%2F#sthash.3LTk4MYz.dpuf

Housing numbers, Retail Sales and inflation data told quite the tale, while words from the Fed chair also caught people's attention.

In housing news, Housing Starts slipped in January but still beat expectations. The Commerce Department reported Housing Starts declined 2.6 percent in January from December to an annual rate of 1.246 million. However, Housing Starts were up 10.5 percent from January 2016. In addition, Building Permits were 4.5 percent above December's figures. New housing inventory that is in the works or being planned will be a welcome sign to homebuyers.

Retailers enjoyed a solid January as consumers seemed more upbeat about the economy. Retail Sales rose 0.4 percent, above the 0.2 percent expected, while the December reading was revised higher, per the Commerce Department. From January 2016 to January 2017, Retail Sales were up 5.6 percent.

Inflation on both the consumer and wholesale sides was also hotter than expected in January, with the wholesale-measuring Producer Price Index (PPI) reaching its highest reading since the fall of 2012. Of note on the consumer side, year-over-year Consumer Price Index rose to 2.5 percent. Year-over-year PPI remained unchanged at 1.6 percent.

Rising inflation decreases the value of Bonds, like Mortgage Backed Securities. This, in turn, can have a negative impact on home loan rates, which are tied to Mortgage Bonds. While Mortgage Bonds reacted negatively to the hot inflation and robust economic data, it was the words of Federal Reserve Chair Janet Yellen that really set markets in motion. Yellen caused a stir early in the week when she said it would be "unwise to wait too long to hike interest rates," referring to the Fed Funds Rate. This is the rate at which banks lend money to each other overnight. Her remarks revved a record-setting Stock rally at the expense of Bonds, though Mortgage Bonds rebounded later in the week.

Despite the volatility, home loan rates remain in historically low territory.

If you or someone you know has any questions, please don't hesitate to contact me.

Forecast for the Week

Housing news will be the bookends of a short week. Markets are closed Monday in observance of Presidents Day.

In housing news, Existing Home Sales will be released on Wednesday followed by New Home Sales on Friday.

Thursday brings the usual weekly Initial Jobless Claims.

The Consumer Sentiment Index will be shared 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 Bonds have rebounded in recent days. Despite recent volatility, home loan rates are still in attractive territory.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 17, 2017)