Bob's Blog

ryoder@truckeeinfo.com

530-582-3313

What about this market

Bob Yoder (Davis Yoder Realty Group) — Mon, 30 Jun 2008 17:14:21 -0500

up, down or sideways

The national marketplace is still very challenged. In a recent Economist magazine report the price drop now is greater than in the 1930 depression, yes greater than the depression. A sobering statistic indeed.

This makes the 1980 and 1990 markets look like a dream. Some places are seeing very fast decreases in the marketplace as lenders take back properties and slash the prices to get them off the books.

One segment of the market that is not afraid to buy is foreigners. As with the stock market for every seller there is a buyer who perceives the purchase to be a good deal.

The buyers are getting great deals and in many instances are purchasing for less than replacement cost.

Prices are back to 2003 levels which gives everyone that did not get in, another chance. The heard instinc does make this a difficult path the follow but usually proves to be great long term decision.

The summer market in Tahoe

Bob Yoder (Davis Yoder Realty Group) — Mon, 30 Jun 2008 17:02:47 -0500

As we approach the summer season it is time to look at where the market is. Inventory is just about the same as last year. It appears we may not see a big run up for the summer season. It definitely is a buyer's market and they are looking for deals. The lending environment is still very challenging, firstly to get a loan and then to actually have them fund. Escrows are taking longer to close due to lending issues.

Most buyers are still sitting on their hands afraid to jump in. The fear is that prices could go lower. Yes they could and yes they may not. Last month we offered an article featured in Time Magazine that showed the folly of waiting if interest rates went up. You actually could pay more in a rising interest rate market even if prices fell another 10%. Well, as we mentioned there were strong signs rates could rise and they have.

Here is a recent post in the Wall Street Journal, "Interest rates on mortgages have spiked in the past 10 days, and there's a serious risk that they're going get a lot higher. If you act quick, you can still find some good deals." With inflation accelerating the chances of higher rates increase. Long term rates are function primarily of expected inflation rates. Currently we have negative real short term rates and a very high level of capital formation in the US market (printing money). These two functions have always led to higher inflation and higher commodity prices. Hence the strong current commodity markets. The interesting thing to note is that the biggest commodity is real estate and since it is in a down cycle it currently is not rising with other commodities. Could this change?

Keller Williams is pleased to announce exciting news, O'Neal brokers in Lake Tahoe is now part of the company. O'Neal is long established company serving Lake Tahoe and Squaw Valley. This will provide you greater access to the Lake Tahoe market area if that is your focus.

Truckee Market Report

Bob Yoder (Davis Yoder Realty Group) — Fri, 13 Jun 2008 11:40:51 -0500

The Market Monitor

June 4, 2008

Dear Client;

Market Overview

Headlines abound with all the problems across the country. They also highlight the number of investors in the market place. Just like the stock market, for everyone selling, there is someone buying. We still believe 2008 will have similar numbers to 2007. Certainly there have been some exceptional deals buyers have negotiated with market prices generally back to 2003 – 2004 levels. Sellers who bought in earlier years have still done exceptionally well with their investment. For first time buyers, this is a second chance with great prices and mortgage rates.

Tahoe Donner

The monthly numbers are very similar to a year ago. There was one lot sale, a golf course lot on Skiview Loop offered at $375,000.

Lahontan

There was one home sale. There were no lot sales.

Old Greenwood/Grays Crossing

There were no home sales and one fractional sale in Old Greenwood. There were no lot sales.

Northstar

There were no home sales and 2 condo sales in the Village.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 14 home sales congregated in the lower end of the market.

Squaw Valley / Alpine Meadows

There were 3 condo sales in Squaw Valley.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Sincerely,

Bob and Nancy

The Davis Yoder Realty Group

Keller Williams Boice Realty

ryoder@truckeeinfo.com

530-582-3313

Staying involved in the Inspection Process

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 May 2008 15:41:08 -0500

First rule of inspecting a home you want to buy is to stay intimately involved in the process, and to leave no stone unturned. If you're busy or traveling during the time period, you have to complete your due diligence investigations by enlisting the aid of a friend you trust to stand in on your behalf -- someone who will keep you well informed as inspections proceed.

Buyers want to be sure they get a good deal on the home they buy. This is especially so if they're buying in a soft market. Whether a property is a good deal depends on its condition, its location and the price paid.

Most buyers don't take the inspection process far enough. They hire a home inspector to do a general home inspection to make sure that all systems are in working order and that there aren't any serious defects that might affect their decision to buy or not.

For some buyers, this constitutes their due diligence inspection of the property. But, in many cases, simply having a home inspection done is not enough to ensure that you don't end up regretting you bought the property.

Most home inspectors recommend further inspections. Some buyers take these admonitions seriously and some don't. A recommendation that is often overlooked is to research the permit history.

If you don't check the permit history, you could find out later, when you want to take out a permit for a renovation, that there are expired permits for work that never received a final approval from the city inspector. You might be required to reinstate the expired permits and finish the job to the building department's satisfaction before you can take out a permit for a new project. This could be expensive, take time, and at the least, be a hassle.

Another item buyers ignore is the cost of routine home maintenance. Some homes cost more to maintain than others. Well-maintained homes will be easier to maintain because you'll have little deferred maintenance to repair.

Ask the sellers for information about how much they pay per year for tree trimming, painting, and servicing house systems such as the roof, furnace and drainage systems. Also ask how much the utility bills run in an average winter and summer month. All of this will factor into the cost of owning the home. Buyers usually focus on the price they'll pay upfront for a house. How much it will cost them over time should also be factored into the total cost of home ownership.

HOUSE HUNTING TIP: Buyers tend to pay more attention to the condition of the home they're buying than they do to finding out all they need to know about the area in which they'll be living. The home you buy is not a good value if you find out a year later that the neighborhood is declining. Make sure you find out if homeowners are moving in or out of the area. If you see a lot of remodeling going on in a neighborhood, this is a good sign that the homeowners plan to stay put. Another good sign is if there are few listings and the ones that come on the market sell quickly. This indicates a high demand for the neighborhood.

You'll also want to find out about crime in the neighborhood, and whether or not there is development planned in the area that might have a positive or negative impact on the neighborhood. And check into the general state of the local economy.

THE CLOSING: Are businesses hiring new employees or issuing pink slips?

Inspections...

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 May 2008 15:39:45 -0500

Inspections are an important part of home buying, but the inspection process can be nerve-racking for both buyers and sellers. Both parties want the deal to go through without a hitch. However, sometimes problems surface that the buyers weren't aware of when they entered into contract.

All houses have defects, even new ones. So it should come as no surprise when defects are discovered. The pertinent issues are: Is there a problem? How serious is the problem? How much will it cost to repair?

A home inspector may have a contractor's license. But, few inspectors also are engineers, architects, and plumbing, heating, roofing, wood pest (termite) and drainage contractors. Nor are they pool, spa, sprinkler or security-alarm specialists. For this reason, most home inspection reports are loaded with disclaimers and recommendations to contact the appropriate specialist to evaluate the severity of a problem.

HOUSE HUNTING TIP: It's highly recommended that buyers follow up with further inspections, and get estimates to repair defects that are a concern before removing an inspection contingency. An inspection contingency protects the buyers, but only if they carry through and complete necessary inspections.

Don't be surprised if a second opinion confuses rather than clarifies an issue. For example, a home inspector might be concerned about the internal mechanics of an older furnace. And, he may not have the expertise necessary to say with confidence that there is no problem. So, he recommends that the buyers consult with a licensed heating contractor.

Just because an inspector suspects there might be a problem doesn't mean that one exists. Several years ago, buyers of an older home in the Oakland Hills east of San Francisco were advised to have a heating contractor check the furnace because the home inspector thought it might need replacing for safety reasons. A furnace with a cracked heat exchanger leaks carbon monoxide fumes that can be deadly.

The buyers called in a heating contractor who inspected the furnace and said that it needed replacing. The buyers were disappointed, but wanted to continue with the sale. So they asked the sellers to share in the expense of a new furnace.

The sellers weren't convinced that the furnace needed replacing. And they didn't want to contribute to the cost of a new one if it wasn't necessary. They contacted a second reputable furnace contractor who inspected the furnace and said it was fine and didn't need replacing.

To resolve the dispute, the buyers and sellers agreed to call in an inspector from the local utility company who would have red-tagged the furnace and put it out of commission if it was dangerous. The verdict was that the furnace was fine and had years of life left.

More and more, sellers are having their homes inspected by professionals before putting their homes on the market. This is done so that sellers have an opportunity to make repairs before marketing or for disclosure purposes.

It is risky for sellers to hide a bad report from buyers. There have been cases where sellers chose not to give the buyers a report they didn't like. Later, the buyers coincidentally called in the same contractor for an opinion who informed the buyers that they had already done a report on the house for the sellers.

Lawsuits have resulted from sellers withholding detrimental reports, although disclosure laws vary from state to state. Check with a knowledgeable real estate attorney for answers to questions about a seller's disclosure obligations.

THE CLOSING: Sellers who aren't pleased with a report should consider getting a second opinion and disclose both reports to the buyers.

How much is a view worth?

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 May 2008 15:38:28 -0500

How much is a view worth? Here is an excerpt from a MSN real estate.

It's a power thing

Real-estate market analyst Ernest V. Siracusa Jr. is experienced in pricing views in Southern California. He works for subdivision builders and developers, advising them on how much their new homes can sell for -- and how much more the same place with a panoramic sweep of the hills can command.

What makes people pay so dearly for a view? It's status, for one thing, says Siracusa, and the quiet and pleasure a view affords. Californians are particularly view crazy, he says. "It goes with the lifestyle of the population that lives here."

Also, you get privacy, an increasingly treasured commodity in a crazy, crowded world. "You don't have anybody behind you," he says. "Being on top of a hill separates you from people below."

There's the sense of freedom, of openness, of achievement, all highly valued by the human spirit. The feeling is, "'I own this place,' versus 'I'm cramped in a sardine can' where everybody's at the same level and you've got fences and houses and everybody's looking down at your yard."

A lot of science, a little intuition

When Siracusa launched The Siracusa Co. in Thousand Oaks, Calif., 35 years ago, he set about establishing some rules of thumb for himself. He analyzed the problem systematically over several years, comparing sale prices of identical subdivision homes (or methodically valuing and accounting for any differences) to arrive at a few guidelines for valuing a view.

"I set out to define this for myself in the real world," he says. "I tried to compare the same floor plans, lot sizes, get rid of the externals that could bias the price. I did it for a lot of tracts in a lot of different communities, looking at sale prices of new homes."

For example, he'd compare the sale price of a house on lot without a view ($314,990) with the price of an identical house near top of a hill with an unobstructed view ($344,990, a premium of 9.5%). Comparing each sale with others with similar types of views, he arrived at premium ranges for each category. The view premiums were remarkably similar in each category, he says.

"What really counts is the (ground level) view from the back, because that's where people live." A stunning view out the front door has little value, in Siracusa's opinion, because no one lives in the front of the house. "You can have a house literally across the street from open space, but a view from the front doesn't count. You give that zero view premium." What matters, he says, is what people see from the kitchen, master bedroom, dining and family rooms, the most-used rooms in a home.

Likewise, Siracusa gives little premium for second-story views. "It would be minimal, if I gave it anything. But take that same view and put it on the ground floor, it's worth a lot."

In high-rise buildings, view premiums rise with the elevator. "There's a status to being higher, and you tend to get a broader view as you go up higher," Siracusa says.

Pricing the view

Siracusa's research has been confirmed over time, at least in new subdivisions, he says. Here are the premiums he sees for homes in new Southern California subdivisions (with houses on each side and views ranging from 45 to 90 degrees):

1% - 2.5%:A home on level ground overlooking unobstructed open space. For example, a house that would otherwise cost $300,000 would go for $307,500 (a 2.5% premium).
3% - 5%: A home just high enough to look over rooftops with a partially obstructed view. "Not a real high-quality view," as Siracusa puts it.
6% - 8%: A good unobstructed view but without much elevation; a home halfway up the hill, for example.
9% - 12%: Atop the hill with an unobstructed view of a city or open space.
15% - 20%: A water view. An outstanding, unobstructed view of a big lake or ocean can command up to 25% more in a development, Siracusa says. And oceanfront can cost 25% to 30% more. For example: A $500,000 house can run $625,000 with an outstanding water view. By the same token, a $1 million house jumps to $1,250,000 or more overlooking a lake.

It's a lot harder to isolate a view's value in older, resale homes. To do that, analysts compare prices of similar homes sold in the same market and time frame, eliminating all other differences but view. That's hard to do. Seemingly comparable houses can be quite different in subtle ways, including the quality of construction and materials, upgrades and maintenance, and those differences affect the price.

Among those who've tried to reduce a view's value to hard cash are Western Washington University marketing and finance professor Earl Benson and his colleagues. In the late '80s and '90s they scoured thousands of assessors' records in Bellingham, Wash., measured homes' distance from the water and performed fancy calculations to conclude that a $200,000 house with no view would sell for $317,600 if it had a full ocean view and $453,280 if it were right smack on the shore of a lake.

On average, Benson says, a full, unobstructed water view boosted a home's price about 60%; the closer the water, the higher the price. Partially blocked views still fetched a 10% to 20% premium. Today, with view properties even scarcer, he says, chances are that view premiums have risen: "The 60% that we estimated in the early '90s may be 80% or 100% today," he says.

Fix it Up

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 May 2008 15:36:46 -0500

Sellers who anticipate losing money if they sell their home may wonder why they should spend a dime fixing the place up for sale. Isn't this throwing good money after bad? Even sellers with plenty of equity in their homes often figure the way to get the most out of the sale is to cut sale costs to a minimum.

This attitude is directly contrary to the notion that the way to make the most money on the sale of a home is by pricing the property appropriately for the market, and by making cost-effective improvements that will result in a higher sale price in a shorter time.

Job applicants don't show up for an important interview in tattered old clothes if they want to make a good impression, particularly if there were plenty of other qualified applicants. Likewise, if you wanted to get top dollar from the sale of a car you would have the car detailed so that it looked its best. The same principal applies to selling single-family homes.

Today, many housing markets have plenty of homes for sale and far too few buyers. For years, buyers competed with one another in order to buy a house. Now, in general, sellers are being forced to compete with other sellers in order to get their home sold.
Consider the competitive nature of the market when deciding if you're going to improve your home before selling it, and how much you'll invest. Keep in mind that the point of fixing up a home to sell is to maximize your return from the sale. Don't waste money on improvements that have little or no value to buyers.

HOUSE HUNTING TIP: Ask your real estate agent or a staging decorator to walk through your home with you for the purpose of determining what fix-up projects you should ideally complete before marketing the property. For example, you might be inclined to replace worn-out carpet. Your agent, however, might advise otherwise.
An agent who specializes in the sale of older homes in the area might recommend refinishing the hardwood floor that is hidden underneath the carpet instead. Buyers looking for charming older homes usually prefer hardwood floors to carpet.

A common opinion expressed by sellers is that it's pointless to fix up a place for someone else whose decorating preferences might be quite different. For example, why not just offer a credit to the buyers so that they can either change the carpet or refinish the hardwood floors -- whichever they prefer?

The problem with this approach is that most buyers have a difficult time imagining how a home will look fixed up. They remember what they see, not what the house could look like with this or that improvement.

Imagine there are five homes listed for sale in an area, all similarly priced, but not all in the same condition. Three houses have old, worn carpet covering most of the floors; one has linoleum over the floor; and the fifth has pristine, recently refinished hardwood floors. Most buyers will gravitate to the home with the beautiful hardwood floors.

The best houses in the best condition and offered for the best price usually sell quickly. A fast sale is important to some sellers in this market. The sooner your home is sold, the sooner you stop paying mortgage payments, property taxes and various maintenance costs.

THE CLOSING: In areas where prices are declining, a quick sale can result in a higher price than might be attainable in a few months

April 2008 Market Update

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 May 2008 15:31:24 -0500

The Market Monitor

May 1, 2008

Re: Truckee Area Real Estate Market

Dear Client;

Market Overview

The market continues to chug along. Buyers have done very well with their purchases as we have seen some exceptional deals and homes selling at less than replacement cost and land selling at a tremendous discount to several years ago.

The number of closed sales is down 30%, the dollar volume down 25% and the median sales price for residential up 8%.

The current buyer activity is normal for this time of year and things will be quiet for the next 2 months.

Tahoe Donner

The number of home sales was pretty close to the 2007 number and inventory is now pretty much the same as 2007. There were 3 sales over $1 million and below $1.2 million. The sales to list ratio is still very low so no indications of any changes in the market.

There was 1 lot sale.

Lahontan

There were no home sales and 1 lot sale at $255,000.

Old Greenwood/Grays Crossing

There were no home sales and 2 lot sales in Grays Crossing.

Northstar

There were 3 home sales and 1 condo sale. All were in the lower price ranges. Additionally there were 2 Ritz Carlton sales

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 14 residential sales with the highest at $610,000 and the median price at $424,000. So demand is in the lower end.

Squaw Valley / Alpine Meadows

There was 1 condo sale in Alpine and no sales in Squaw.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty

530-582-3313

March 2008 Market Update

Bob Yoder (Davis Yoder Realty Group) — Wed, 02 Apr 2008 16:53:46 -0500

The Market Monitor

April 3, 2008

Re: Truckee Area Real Estate Market

Dear Client;

Market Overview

The market continues to drift lower as measured by sales volume. There were a total of 60 residential properties go under contract in March. This equates to a 20 month supply of residential properties. While this is a dangerous number to use for our marketplace, as there are extreme seasonal changes in the market, it does give a picture of what is going on. This is a low number for this period especially since March included Easter this year and ski conditions and travel weather were excellent. Certainly there were some extreme financial market conditions with the unraveling of Bear Stearns and the Fed coming to the rescue of the financial system.

On the positive side, increases in conforming loan amounts, very low mortgage interest rates and strong interest in the upper end market are very positive. Several Tahoe lakefronts sold with the highest at an asking price of $25 million.

The lower end of the market, which has been anemic, saw most of the activity.

This market continues to be an exceptional buyers market.

Tahoe Donner

There were 13 residential sales which is historical low for this period. There were 2 lot sales.

Lahontan

There was one home sale and no lot sales.

Old Greenwood/Grays Crossing

There were no home sales and one closing that indicates tremendous opportunity for buyers with regard to price. There were no lot sales.

Northstar

There was one home sale and one fractional sale in the Northstar Club. There was one lot sale.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 17 residential sales concentrated in the lower price range with a median value of $447,450.

Squaw Valley / Alpine Meadows

There was one home sale in each of Alpine and Squaw and 3 condo sales in Squaw.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty

530-582-3313

February 2008 Tahoe Donner Comparisons

Bob Yoder (Davis Yoder Realty Group) — Thu, 06 Mar 2008 14:05:25 -0600

February Comparison

	Tahoe Donner Home Sales to Feb 29, 2008

YEAR-TO-YEAR COMPARISON REPORT	Single Family
									Current
	# Sold	% Chg	Volume Sold	% Chg	Average Sale	% Chg	Median Sale	% Chg	# For Sale
	RESIDENTIAL		$		$		$


Current Period 2008	21		17,890,000		852,258		755,000		159
One Year Ago 2007	33		23,336,557		704,138		700,000		131
Increase/(Decrease)	-12	-36%	-5,446,557	-23%	148,120	21%	55,000	8%

Sales over $1,000,000 in 2008	7
Sales over $1,000,000 in 2007	1
Increase/Decrease	600%

Sales $ Ratio
Average days on market	117
Market Percentage of Sales to List	95.97%
Most Buyer Representation Sales by Agent	Davis Yoder Group
Most Seller Representation Sales by Agent	Davis Yoder Group

Most sales in Tahoe Donner by Company	Keller Williams	37%	of total
Next Highest Company		18%	of total

1031 exchanges

Bob Yoder (Davis Yoder Realty Group) — Thu, 06 Mar 2008 14:03:37 -0600

Rev. Proc. 2008-16: Safe Harbor for Exchanges of Vacation Homes and Conversions to or from Personal Residences

This revenue procedure provides a safe harbor under which the IRS will not challenge whether a dwelling unit qualifies as property held for productive use in a trade or business or for investment under Section 1031. This revenue procedure follows Moore v. Commissioner, T.C. Memo. 2007-134 (the recent vacation home case) and the Treasury Inspector General for Tax Administration (TIGTA) report “Like-Kind Exchanges Require Oversight to Ensure Taxpayer Compliance”(9/17/07), which called for more IRS guidance on vacation home exchanges. The safe harbor, while specifically addressing the vacation home issue, also indirectly addresses the issue of converting a principal residence into qualifying relinquished property prior to an exchange, or converting a replacement property into a personal residence after an exchange.

It is just a safe harbor. An exchange may still fall outside the parameters and meet the statutory requirements, but you should expect heightened scrutiny in such a case. The safe harbor is effective for exchanges occurring on or after March 10, 2008.

Relinquished Property. A dwelling unit qualifies as relinquished property in an exchange if it is owned by the taxpayer for at least 24 months immediately before the exchange, and, in each of the two 12-month periods immediately preceding the start of the exchange: (i) The taxpayer rents the relinquished property to another person at a fair rental for 14 days or more, and (ii) the taxpayer's personal use of the relinquished property does not exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the relinquished property is rented at a fair rental.

Replacement Property. A dwelling unit qualifies as replacement property in an exchange if it is owned by the taxpayer for at least 24 months immediately after the exchange, and, in each of the two 12-month periods immediately after the exchange: (i) The taxpayer rents the replacement property to another person at a fair rental for 14 days or more, and (ii) The taxpayer's personal use of the replacement property does not exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the dwelling unit is rented at a fair rental. If a taxpayer reports a transaction as an exchange on the taxpayer’s federal return expecting that the replacement property will meet the qualifying use standards, but the replacement property does not meet the qualifying use standards, the taxpayer, if necessary, should file an amended return and not report the transaction as an exchange.

Broad Definition of Personal Use. The taxpayer is deemed to have used a dwelling unit for personal purposes if used by: (A) the taxpayer or any other person who has an interest in such unit (including a tenant in common), or by any member of the family of the taxpayer or such other person; (B) by any individual who uses the unit under an arrangement which enables the taxpayer to use some other dwelling unit (whether or not a rental is charged for the use of such other unit); or (C) by any individual if rented for less than a fair market value rental. A taxpayer may rent the dwelling unit to a family member if the family member uses it as a principal residence (and not a vacation home) and the family member pays fair market rent. Some taxpayer usage may be allowed for repairs and annual maintenance too. See Section 280A(d)(2) and (3).

“Fair market rent” is determined based on all of the facts and circumstances that exist when the rental agreement is entered into, and all rights and obligations of the parties to the rental agreement are taken into account. A “dwelling unit” is real property improved with a house, apartment, condominium, or similar improvement that provides basic living accommodations including sleeping space, bathroom and cooking facilities.

Comment: How Does the Taxpayer Meet the Safe Harbor for a Vacation Home and Principal Residence? (1) Limit Taxpayer Use. The taxpayer (any any related parties under section 267, other than as a principal residence) can only use the property for 14 days per year (or 10% of the rental period if greater) for the two years prior to the exchange. The taxpayer may use the dwelling some additional days for repairs and annual maintenance too, but be prepared to prove actual work done. (2) Rent It Out. The property also must be rented to unrelated party for at least 14 days per year, but it does not have to be rented more than 14 days per year.(Alternatively, it can be rented as a principal residence to a related party).

Therefore, a taxpayer can take a personal residence or vacation home, rent it to a friend for 14 days per year for two years and then exchange out of it, with no question about whether it’s held for investment. All rent must be fair market and the taxpayer should have evidence to prove this. Likewise, the taxpayer can do the same thing on the replacement property for the two years after the exchange (and this must be done if the replacement property is also the taxpayer’s vacation home or future principal residence).

February 2008 Truckee-Tahoe Market Update

Bob Yoder (Davis Yoder Realty Group) — Thu, 06 Mar 2008 13:40:02 -0600

The Market Monitor

March 4, 2008

Re: Truckee Area Real Estate Market

Dear Client;

Market Overview

The market continues on the path it was last year as far as sales volume. The difference this year is in the high end. Sales of homes over $1 million have been strong. Of the 72 single family home sales in February, 20 were over $1 million 8 were over $2 million.

The big money is still strong on our market.

Tahoe Donner

There were 20 homes in February with 5 over $1 million. The highest asking price was $1,375,000. There 2 lot sales.

Lahontan

There were 3 homes in February. There were no lot sales.

Old Greenwood/Grays Crossing

There were 2 home sales in Old Greenwood and none in Grays Crossing. There were no lot sales.

Northstar

There were 3 home sales and 2 condos.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 19 home sales in the area for February.

Squaw Valley / Alpine Meadows

There were 5 condos and 1 home sale in Squaw. This is a big change for Squaw which has been very slow. There was one home sale in Alpine.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty

530-582-3313

January 2008 Market Update

Bob Yoder (Davis Yoder Realty Group) — Fri, 11 Jan 2008 13:33:33 -0600

The Market Monitor

January 4, 2008

Re: Truckee Area Real Estate Market

Dear Client;

Market Overview

The year 2007 will be well remembered as a major shift in the national real estate market. While the market actually peaked in 2005 in takes many years for the market to settle out and see just where it is at. The one thing our market has not experienced relative to other areas in the country is a significant increase in inventory.

Nationally, inventory levels are at all time highs. This creates a big drag on the market. The most important number in 2008 for our market is the inventory levels. All barometers are pointing to significantly higher inventory levels. We end the year at the highest level in 6 years, December saw an inordinate number come on the market and there is a pool of sellers that will be putting their properties back on the market in 2008.

This would mean we could see further softening in prices.

For 2007 we were estimating that the number of sales would be about the same as 2006. In fact it is ending up just this way. That equates to 41% of the properties selling that were offered for sale in 2007. We would expect this percentage to actually be lower in 2008.

The lot resale market is very soft and there is no reason to think this will change for several years.

On a positive note, we just returned from the Salt Lake City area and those resort markets, Park City, Deer Valley and Ogden Valley make our properties a bargain. Our prices are substantially less especially in the land department. We saw lots of activity from interested buyers. One dynamic they have which we do not, is a more diversified buyer base. There are buyers from all over the country, Europe and even Dubai. The Delta hub in Salt Lake City certainly has a bearing.

With the Ritz coming to our area and the Hyatt underway we think we will see a more diverse buyer pool in the future.

With our warmer winter weather, even more ski resorts, lakes etc., these buyers are going to find our market to be very desirable.

Tahoe Donner

There were only 4 sales in December which even by historical standards is quite low. There were 2 lot sales, one for $199,000 that had an original asking price of $325,000 and a golf course lot on Swiss.

Lahontan

There were no home sales and there was 1 lot sale.

Old Greenwood/Grays Crossing

There were no home sales. There were 3 lot sales in Grays Crossing, all with an asking price of $300,000. The original purchase price on the lots was $550,000 to $625,000. One owner had all the lots.

.Northstar

There were no home sales and 2 condo sales in the Village, one at $2.6 million.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 11 home sales with the highest sale at $899,000.

Squaw Valley / Alpine Meadows

There were 2 home sales in Alpine Meadows, one home sale in Squaw and 3 condo sales in the Village.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty

530-582-3313

Forecast for California 2008 home sales

Bob Yoder (Davis Yoder Realty Group) — Mon, 03 Dec 2007 10:25:16 -0600

Forecast for California 2008 home sales

The California Association of Realtors is estimating that there will be 350,000 unit sales in 2008 which is about equal to the mid 1990 rate before the boom happened. This is off from 625,000 sales in the peak years of 2004 and 2005.

California experienced one of the highest levels of investor sales 18% of the total sales up from a norm of 7%. It also had one of the highest levels of sub prime loan originations in the range of 25% of all sales.

If you take these numbers and calculate the normalized rate you get back to 350,000 to 375,000 ranges.

What this means is that in some markets, especially the Inland Empire, Sacramento and Valley towns the pain will continue for awhile with further price drops.

What about the Truckee area? Our inventory has not gotten out of hand however we are estimating that 2008 will see significantly higher inventory numbers. This is because there are a lot of sellers who did not sell in 2005, 2006 and 2007. They keep waiting for a better market. This has not come and they will all come to the party next year along with the new 2008 sellers. The number of sales should be about the same as 2007. This will equate to an actual absorption of 20% to 30% of the homes that come to market will actually sell in 2008.

To see new building we need additional reductions in lot costs and building costs primarily sub contractor charges. As this develops and builders can then produce homes that are profitable we will then see some building. This may start in the latter half of 2008.

Prices in the Truckee area continue to be very attractive and in the lower ranges, they are below replacement costs. So as per above either prices go up or replacement comes down. This is already being experienced in other areas of the country and builders are producing new inventory below the asking price of existing new homes still lingering on the market.

The market always has a way of reaching equilibrium and it will. Either the price drops are big and swift or smaller and longer with a corresponding longer flat period. In any event we do not anticipate any significant increase in values for quite awhile.

Housing Index

Bob Yoder (Davis Yoder Realty Group) — Mon, 03 Dec 2007 10:23:53 -0600

Existing Home Market.....................................................................D
Conditions in the existing home market are still deteriorating. Annualized home sales fell to 5.04 million in September, equating to the lowest level since September 2001, with existing home sales volume now down 19% over the last year. In addition, the level of existing home inventory now stands at 10.5 months, a level last witnessed in July 1985, equating to a precipitous 44% increase over the last year. All indicators point towards continued price declines, and it is unlikely that we will stray from continued pricing pressure in the coming months. Lastly, the homeowner vacancy rate increased during Q3-2007, while the homeownership rate fell for the fourth consecutive quarter, representing the longest string of declines ever for this indicator - dating back to 1965. Affordability and ARM reset problems continue to favor rental household growth over homeowner growth.

New Home Market...........................................................................D-
The new home market continues to remain weak, with builder confidence now at an all-time low, as the NAHB's Housing Market Index fell to 18 in October. Since its peak in June 2005, the Housing Market Index has dropped 75%. New home sales volume increased to an annual rate of 770,000, and the supply of unsold new homes declined to 8.3 months, while median new home prices increased 5% over the past year. Census Bureau new home metrics are notorious for drastic revisions, so we do not put much weight in the slightly better numbers for this month alone.

Housing Supply................................................................................D
Builders continue to pullback on new supply, which will help the housing market in the long run. Permit activity has fallen to a 1.22 million-unit annual rate, with single-family permits declining to 868,000. Single-family permit activity is now at its lowest point since April 1992, while total permit activity is at its lowest level since March 1995. Starts continue to decline as well, falling to 1.19 million in the last 12 months. Housing completions decreased again to 1.39 million, equating to a 31% drop over the last year.

Mortgage Cancellation Relief: H.R. 3648

Bob Yoder (Davis Yoder Realty Group) — Mon, 03 Dec 2007 10:21:02 -0600

Mortgage Cancellation Relief

How H.R. 3648 Impacts Taxation on Some Vacation Homes

A harsh reality of tax law changes is that any benefit provided to taxpayers must be "paid for" with a revenue offset. In order to "pay for" the mortgage cancellation relief, the Ways and Means Committee modified, but did not eliminate, a tax planning opportunity for owners of vacation and rental properties. Under current law, the owner of a vacation home or rental property may sell his/her principal residence, exclude up to $500,000 of the gain from taxation, and then convert the second property into his/her principal residence. Once the 2-year residency requirement has been satisfied, the individual may sell that property and once again exclude as much as $500,000 from taxation.

The new rule modifies the application of the exclusion when an individual converts a rental or vacation property to his/her principal residence. Under the new rule, effective January 1, 2008, the owner will still have the option of receiving the benefit of the exclusion, but will be required to pay capital gains taxes on the appreciation attributable to the time that the property was used as an investment property. The amount excluded will be a fraction, determined at the time the vacation/rental property is sold. Assuming that the owner has satisfied the 2-year residence requirement, the amount of gain that can be excluded will be determined by a fraction. The numerator of the fraction will be the number of years the property was used as a principal residence. The denominator will be the number of years the individual actually owned the property, measured from January 1, 2008. Thus, the legislation has no retroactive impact. Congress sought a policy that would provide a capital gains exclusion on a principal residence only for the time that the property was actually used as a principal residence.

How To Handle Low Ball Offers

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 Nov 2007 15:13:17 -0500

How to Handle Low Ball Offers

If your house has been on the market for quite a while (3 to 6 months), you may have already dropped your price and now you're waiting for the buyers to rush in and make wonderful offers on this now-priced right property. And then it happens.

The lone buyer does appear, like a bandit in the night and offers you even less than what you just agreed to. Quite a bit less -- about 10 percent less. So on your $350,000 house, that you just dropped to $324,000, you now have an offer for $299,000. With a seller subsidy request of $5,000. At this point, your net is $294,000.

So how do you handle such a low-ball offer. Well, first of all -- don't panic, get angry or lose sleep. Especially, don't reject the offer right off the bat and tell them to come back when they're serious. Remember, it's now a negotiation game and the buyer IS serious or he or she would not have made an offer.

Several things have happened before this offer came in. The buyer, with his agent, has researched the market, walked through as many as 30 or 50 properties, conducted a study on the value of the property and written an offer for your house. Remember, you just won the lottery. They could have written on any other house, but they selected yours. So let's get busy.

First of all, do an analysis of your own goals and needs. How much do you really need to come out of this house to meet your goals of moving to your next home? What could you really live with and what amount are you going to counter. Remember this last point -- what are you going to counter? This is assuming that you're not rolling over and that you're going to stay in the game.

Next, conduct a comparative market analysis of the house once again. What's happened in the market to get this buyer to offer such an offer (notice I didn't say 'low'). It might be that your house is now worth that amount. And if it is -- that's okay, because it probably means the house you wanted to buy up into is also worth less. At the worse, you're going to take away less money. The best thing to look at, however, is that now you're going to buy up with a smaller down payment because the buy-up property is also less.

Now, let's start the negotiation. Keep in mind, this is for the long haul. Keep it alive as long as the buyer will keep it alive. Give up a little bit at a time. If you reduced the house to $324,000, expecting an offer of $319,999 with closing costs of $10,000 -- then start there. You're already willing to accept a net of $309,999, so you're not really that far off. Understand you're not going to get top dollar with no seller subsidy. So come down to $320,000 and give them their closing costs. So now, your net has come up to $315,000.

Hey -- you're actually ahead of the game if they accept. Oops -- they don't. Now they've countered to $309,000 and still want the $5,000 in closing. (Now our net's at $304,000). Great. Just think. When you started, you were $324,000 apart (remember, you had NO offer at all). Now, you're only $5,999 away from the net you were willing to accept in the first place.

We're almost there. Now, before I go much further, here's a negotiation tip -- keep this civil. Use a lot of complements about the offer, the buyers and the agent. "What a great offer. Thanks so much for writing. We are very excited about selling this house to you."

You want the buyer agent and his/her clients to know you're wanting to work with them. You've been waiting six months for this day (negotiation day) and you want to keep everyone engaged in the process to get your goals met -- sold and on your way to your new home in the country.

Now offer your final counter (or maybe next to final). You definitely want to use the complements at this point: "We are so close." "I can't wait till we wrap this up, then we can all celebrate."

At this point, you know the buyers want to buy and your sellers are ready to start packing, so emphasize that you're very close. Use a dialogue like this: "We are so close. We have some goals to meet, just like you do. And I hope we can bring this together to get us both where we want to be."

This is when you make the final offer and stick with it. If you offer $314,000, they definitely get what they need and you get closer to your final net -- which at this point would be $309,000 -- just $999 off of your initial goal. Then you know if it goes forward or you're back on the market. However, don't be so stubborn that you lose the lone buyer because of $2,000 or so.

If the buyer is stretching and this won't work, this is when the honesty comes out. The agent may tell you, If we can't do $309,000, it's just not going to work. It goes too far beyond their qualification." Then you can decide whether to keep it on the market (hoping you don't have to drop the price again), or you cut the loss and move forward with settlement.

Be patient with the process. Don't get upset, remember, they're trying to meet goals just like you are. By working together, both can get what they want.

Monthly Update, Market Review November 2007

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 Nov 2007 15:10:55 -0500

The Market Monitor

November 1, 2007

Re: Truckee and Tahoe Real Estate Market

Dear Client;

Market Overview

The market numbers are very much in line with November of 2006. It seems pretty evident the number of sales for the year will end up about the same as 2006.

The median price will go down as there have been proportionally many more sales in the lower ranges of the market.

The big news is that there were a larger percentage of higher end homes going into contract in October than in previous months. This is being experienced in other areas of the country as well, the high end and lower ends of the market doing the best.

The land market is very soft. Currently there is a five year supply of lots on the market. Further softness will be experienced in this market segment. Dramatic price cuts are being experienced to get land sold.

The inventory is coming down as sellers are taking their property off the market. In the long run this is healthy. If sellers do not want to price to the current market and what buyers are willing to pay, then it is better to have this inventory off the market. This will bring the market into balance quicker.

It certainly is a great time to be a buyer with lower prices, great inventory to choose from and favorable rates.

Tahoe Donner

Just about identical to 2006 with the same number of sales and just about the same standing inventory. The interesting point is that there were 38 new listings versus 27 a year ago. This could be due to expiring homes being relisted.

There were no lot sales in October.

Lahontan

There was one home sale in October. Another home closed escrowed approximately 10% less than it was purchased for in 2000.

There were no lot sales

Old Greenwood/Grays Crossing

There were no home sales. Lots are selling below original purchase price in The Bluffs at Grays Crossing and some asking prices in The Ridge and The Meadows are below purchase price.

There were no lot sales.

Northstar

There were 4 home sales and 3 condominium sales with one of those in The Village.

There were no lot sales.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 11 home sales with 8 under $600,000.

Squaw Valley / Alpine Meadows

There were 2 home sales in Alpine Meadows and 3 condos in Squaw. One of the home sales in Alpine was a new home offered at $1,895,000 represented by the Davis Yoder Realty Group. It is scheduled to be completed by December 15, 2007

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty

530-582-3313

Tahoe Donner Market Review/Comparison

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 Nov 2007 15:07:00 -0500

	Tahoe Donner Home Sales October 27/07

YEAR-TO-YEAR COMPARISON REPORT	Single Family
									Current
	# Sold	% Chg	Volume Sold	% Chg	Average Sale	% Chg	Median Sale	% Chg	# For Sale
	RESIDENTIAL		$		$		$


Current Period 2007	174		116,502,792		669,556		637,500		161
One Year Ago 2006	171		128,521,053		751,585		670,000		247
Increase/(Decrease)	3	2%	-12,018,261	-9%	-82,029	-11%	-32,500	-5%	-86

Sales over $950,000 in 2007	24
Sales over $950,000 in 2006	35

Sales $ Ratio

Market Percentage of Sales to List	96.91%
Davis Yoder Percentage of Sales to List	97.92%
Most Buyer Representation Sales by Agent	Davis Yoder Group
Most Seller Representation Sales by Agent	Davis Yoder Group

Most sales in Tahoe Donner by Company	Keller Williams	37%	of total
Next Highest Company		18%	of total

Information on tax deferred exchanges

Bob Yoder (Davis Yoder Realty Group) — Fri, 02 Nov 2007 15:03:57 -0500

Here is some information on tax deferred exchanges. If you require more please contact us or our preferred provider Asset Preservation at www.apiexchange.com

IRS Scrutiny into 1031 Exchanges...

If you are considering conducting a 1031 Exchange, make sure you work with Asset Exchange Company to ensure it is done right.

The IRS is planning on increasing audits and enforcement of 1031 Exchanges by summer of 2008.

In a report issued last month, the Treasure inspector general for tax administration wrote: "There appears to be little IRS oversight of the capital gains (or losses) deferred through like-kind exchanges." The inspector general made three specific recommendations, all of which have been accepted by the IRS:

1. The IRS should study tax reporting and compliance issues involved with like-kind exchanges. The IRS agreed to conduct research and complete the work by Aug. 15, 2008. Based on the outcome of this research, it appears likely that exchanges that take place this year will receive greater scrutiny.

2. The IRS should provide better information and guidance to taxpayers on how to conduct a proper 1031 exchange. The IRS has agreed that by Jan. 15, 2008, it will provide more information on a number of publications and forms to help taxpayers understand how the exchange process works. Specifically, Publication 17 ("Your Federal Income Tax") will be updated to specifically remind taxpayers that they must file Form 8824 with their returns if they have been involved in 1031 exchanges in the previous year.

3. The IRS must provide clear guidance to taxpayers on the rules and regulations of like-kind exchanges with respect to second homes that were not used exclusively by owners.

The integrity of your exchange is going to be increasingly important, so don’t trust your exchange with anyone but Asset Exchange Company. Remember, when you work with Asset Exchange Company your transaction is handled by a CPA and Attorney who specializes in Section 1031 of the tax code.

Truckee October 2007 Market Report

Bob Yoder (Davis Yoder Realty Group) — Mon, 22 Oct 2007 11:55:09 -0500

The Market Monitor

October 4, 2007

Re: Truckee Real Estate Market

Dear Client;

Market Overview

The Market had a flurry in August as we reported last month. This as stated primarily was buyers that had been shopping all summer. September returned to the same pace as 2006 and we are set to end the year with the total number of sales close to or slightly less than 2006. Remember that 2006 was off about 30% from historical norms.

The lot market continues to be very anemic and some subdivisions have seen dramatic cuts in asking prices.

Tahoe Donner

The month experienced 17 sales versus 16 in 2006 and there was one home at $1 million with the majority of sales under $800,000. There was 1 lot sale and currently there are 73 offered for sale.

Lahontan

There was one home sale, asking price $1,650,000. There were no lot sales.

Old Greenwood/Grays Crossing

There were no home sales. There were 3 lot sales in Grays Crossing.

Northstar

There were 2 home sales and 5 condominium sales. One condominium was in the Village.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 20 sales with 12 under $599,000. There were 2 sales over $1 million.

Squaw Valley / Alpine Meadows

There were 3 home sales in Squaw and 1 condo sale in the Village. Alpine had 1 home sale and 2 condo sales.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty

530-582-3313

Fractional real estate ownership the ins and outs

Bob Yoder (Davis Yoder Realty Group) — Sat, 11 Aug 2007 18:18:32 -0500

Fractional ownership has gained momentum over the last couple of years. There are a variety of ownership entities including; timeshares, destination clubs and deeded fractional shares.

We have been involved in the sale of deeded fractional shares. What does that mean? Typically the shares are 1/4 to 1/8 ownership. Why did this evolve? There are two reasons. Firstly, the average second home user is for period of 18 days. The rest of the time the property sits vacant or is rented. Secondly as second home prices have soared affordability has wained.

Shared ownership is not new and has been successful in Colorado, Park City, Telluride, Whistler/Blackcomb and here in Tahoe. The buyers we have represented love the product. They end up with a fabulous home for the same price as an older condominium.

Ownership is deeded. It is like you and some other friends buy a property and take shared tenant in common ownership.

What do you need to know? Well, how much and how are they valued. Rather than a price per square foot you look at the price per week. In our market that ranges from $50k to $100k per week. Also what are the dues? The only additional cost that you have from a single family residence is management and any concierge services the property may provide.

Management is critical. Properties identified as ONE OFFS are when a owner only does one property. This structure is hard to provide professional management as there is not enough product. A developer with management arm is the way to go so you have an on-line reservation system and strength.

Fractional shares can be financed and qualify for 1031 exchanges.

This type of product is complicated with over a hundred pages of documents so if you are thinking of becoming a selling agent, make sure there is a market for more than one. You have to educate the other agents and buyers.

We have completed one property, have two almost sold out, a third for sale and developers looking for more. Like all real estate once you have the system then the process is much easier. Commissions typically are higher than for conventional real estate.

If you are a realtor in a resort market you probably have heard of it and I would encourage you to get involved. Major cities such as New York, San Francisco, Miami and LA are also ripe for the buyer that would like to have a part time home in the city.

Check http://www.truckeeinfo.com/files/fractionals.htm for more info.

Monthly Update, Market Review August 2007

Bob Yoder (Davis Yoder Realty Group) — Fri, 03 Aug 2007 10:17:00 -0500

The Market Monitor

August 1, 2007

Re: Truckee Real Estate Market

Dear Client;

Market Overview

We are over half way through the year and the buzz is how is the market doing? There are some interesting numbers to consider. For the Truckee area the number of sales versus 2006 is up 20%, the total dollar volume just about the same as 2006 and the median price is down about 15%. What does this mean? As has been reported, the lower end of the market is where the activity has been, thereby lowering the median sales price. Including the whole market area, Truckee, North Lake Tahoe, Squaw and Alpine, the number of sales are marginally off, the median price down about 12% and the total dollar volume down 13%.

Now you have to factor in the new projects such as Grays, Timilick, Northstar and Martis Camp. These sales are not included in our numbers. Certainly some buyers would have purchased in the other subdivisions if the new offerings were not available. So overall the market is just as we forecast, about the same as last year with the emphasis being on the lower price ranges and the very high price ranges. The Truckee area is where the action is.

Tahoe Donner

Sales for the year are up 122 versus 111 in 2006, the volume is about the same so the median price is down 7%. Sales for July are the lowest we have ever seen in July 10 versus 16 last year which was the lowest. Last year July was abnormally slow and then August and September saw a burst. There were 3 lot sales. A positive note is that a home listed for $2,495,000 just went into contract on August 1. This is very bullish.

Lahontan

There are 32 homes for sale in Lahontan with several coming on recently. This is high for the subdivision and some of the homes being offered may be sellers moving to the new Martis Creek offering. There have been 4 sales so far this year. A normal total for the year would be 12 so we are off on that schedule. There was one lot sale that basically was a golf membership purchase. Lot was discounted and membership included. It was the lowest priced lot in the subdivision.

Old Greenwood/Grays Crossing

There were no home sales however fractional sales are active. Lots in the latest phase, on the golf course by the Sunset Home are now on the market.

Northstar

There were no sales in Northstar. It is a major construction zone right now with the Ritz, Village and new condos in the old parking lot, all under construction.

Glenshire/Sierra Meadows/Prosser/Donner Lake

There were 17 sales in this area. Two notable sales at one in Pannonia Ranchos offered at $4,540,000 and a Donner Lake front at $2,850,000.

Squaw Valley / Alpine Meadows

There were 4 home sales in Squaw Valley and 1 condo. Two homes were in excess of $2 million. There was one home sale in Alpine.

Tahoe City / Kings Beach

There were 5 sales in Kings Beach and 7 in the Tahoe City area. Two lakefronts.

If you would like more detailed information or specific information related to your property, please do not hesitate to call.

Thank you for your support.

Sincerely,

Bob and Nancy

The Davis ♦ Yoder Realty Group

Keller Williams Boice Realty