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Another market change indicator: Are the wealthy buying more South Lake Tahoe luxury homes yet?

By
Real Estate Agent with McCall Realty

are we seeing an increase in luxury home sales in Soutth Lake Tahoe yet?

South Lake Tahoe Luxury Home Buyers: Now is the time!

(Lake Tahoe Real Estate Blog / March 7, 2011 / Richard Bolen)

One of the things we often saw back in the boom years was wealthy folks taking profits out of the stock market and putting it into real estate. Back then there were certainly more luxury home sales than there are now.

Today's CNNMoney.com article, "Who's buying homes? The Rich" caught our attention. As of this moment, the DOW is 12,068, this includes a decline of 101.83 points today, due primarily from fears about Libya and the price of oil. Nevertheless, the DOW is up compared to where we were, and we thought we'd research luxury home sales in South Lake Tahoe and the DOW.

The article says that after four straight years of decline, sales of luxury homes and condominiums priced at $1M or above rose last year in all top 20 US markets. The point the article makes is when the DOW goes up wealthy people buy homes.

 A Jumbo Loan Surprise :
The article also states, and this is a bit of a surprise, that getting a mortgage for these expensive homes was cheaper as well. Jumbo loans, which are required to purchase a luxury home if it is not an all-cash transaction, are normally found at a much higher interest rate than the purchase of a home that does not require a jumbo loan.

A jumbo loan is normally more than $417,000, but can also be as high as $729,000 in high-cost cities such as New York. These loans have higher interest rates because they are considered higher risk — and are not backed Fannie Mae or Freddie Mac.

In 2009 buyers of high-end homes paid 1.8 percentage points more in interest than the average buyer. But in 2010, that spread shrunk to just 0.6 points more.

Continue reading "Another Market Change Indicator: Are the wealthy buying more South Lake Tahoe homes yet?" on our main blog. 


Some Lake Tahoe Real Estate Blog homes for sale updates in general about Stateline, NV:

Jan 4, 2011: Stateline, NV luxury home sales
Jan 1, 2011: 2010 Homes for Sale in Stateline, NV
Dec 2, 2010: South Lake Tahoe 2010 Homes for Sale Demand: Stateline, NV
Sep 2, 2010: Sales Report, here.
June 22, 2010 Sales Report, here.
May 18, 2010, Sales Report, here.
February 2, 2010 Sales Report, here.
January 18, 2010, Final Stateline, NV 2009 sales, here.
December 20, 2009 Sales Report, here.

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