Will This Help Real Estate In South Lake Tahoe?

Will the economic $152 billion stimulus bill affect Real Estate in South Lake Tahoe?

President Bush signed the bill last week in an effort to stimulate the economy and the National real estate market. This bill includes a temporary increase in loan limits for Fannie Mae, Freddie Mac, and FHA until December 31, 2008.

According to NAR president “The loan limit increase should help 138,000 Americans purchase homes and could help 200,000 home owners refinance, and potentially keep there homes.

The FHA loan limit will increase in “High cost areas” and will increase up to 125% of the local median home price, or up to $729,750. The temporary loan limits should be published by March 14th.

This loan increase may help the  South Lake Tahoe Real Estate market a little, but I do not think that it will turn it around. There is a large inventory of new homes in South Lake Tahoe that have been on the market for a long time. The loan limits should increase enough for some buyers to be able to afford one these new homes. Sellers with resale homes priced over $500,000 should also benefit from the increased loan limits.

Sellers beware! Even though I feel the loan limit increase will help some buyers in the South Lake Tahoe Real Estate market, sellers need to be realistic. Pricing your home right in the current market conditions is, and still will be crucial! 

Condos in South Lake Tahoe

Condos in South Lake Tahoe received the brunt of the market slow down in 2007. Compared to the 11% decrease in volume of Single family homes in South Lake Tahoe, Condo sales volume plummeted 57% from $37,796,470 in 2006, to $12,684,000. I think part of the reduction is due to the fact that single family home prices dropped low enough to compete with the condo market. Condo prices also inflated very quickly leading up to 2005-2006 that they became very unstable in the slow 2007 real estate market.

The number of South Lake Tahoe Condos sold in 2007 decreased 39%  from 51 in 2006 to 31 in 2007.

The median price dropped 9% from $389,000 in 2006 to $355,000 in 2007, and the average sales price fell 30% from $580,772 to $409,161.

Condos in South Lake Tahoe priced under $500,000 saw a 26% decrease in units sold, from 31 in 2006 to 20 in 2007.  Units sold for condos priced over $500,000 fell 60% from 20 units in 2006 to 8 units in 2007.

What is the “up” side to the 2007 condo market? You may now be able to buy the condo that you were looking for in 2005 or 2006 but could not afford!

2007 South Lake Tahoe Real Estate Review

Real Estate in South Lake Tahoe  fared better than most other Real Estate markets around the country.  One reason that the South Lake Tahoe Real Estate market is primarily a second home market. The second home market is a much stronger market. Other resort destination areas like Lake Tahoe will continue to be stronger than metropolitan areas.  South Lake Tahoe Real Estate still experienced an overall decrease in both single family home and condo sales in 2007 in most price ranges.  One exception would be single family homes over one million dollars. Single family homes over one million dollars increased 18% from 2006 to 2007.

Single family homes in South Lake Tahoe experienced a decrease in total volume of 11% from $250,960,911 in 2006, to $222,771,475 in 2007.

The total number of single family homes in South Lake Tahoe sold decreased 14% from 446 units in 2006 to 385 units sold in 2007.

The median price of sold single family homes in South Lake Tahoe decreased 7% from $475,000 in 2006, to $440,000 in 2007. The average price actually rose 3% from $562,693 to $578,627. The increase in the average price was likely due to the increase in sales over one million dollars.

There was a 16% decrease in Single family homes in South Lake Tahoe under one million dollars. In 2006 there were 412 and in 2007 there were 345. It was the 18%increase of units over one million, from 34 in 2006 to 40 in 2007 that caused the average price of homes sold to actually increase.

What happens in 2008 will be very interesting and exciting. It is still a buyers market, and there are some very motivated sellers out there. We are even finding some great foreclosures in South Lake Tahoe. I think that those who can afford to take advantage of the current buyers market, and invest in the South Lake Tahoe Real Estate market  for the long term, will beat the market!

Building New Homes In South Lake Tahoe

Building a new house in Lake Tahoe can be very intimidating without  help from an experienced home builder. The following is a list of steps that will help you to build your new home.

Once you have aquired your vacant lot and building allocation, you will need to have your lot surveyed by a licensed surveyor. Make sure that the surveyor marks all of the property corners and drafts a topographical map of your parcel. A topographical map will be needed by your architect to draft the site plan.

The next step is to choose an architect. I would recommend choosing a local architect. Local architects have experience in dealing with the local building departments and the TRPA. Local architects also understand our  , snow loads, coverage regulations, fire sprinkelers, and other codes and restrictions. Some architects even offer a large selection of pre-drawn plans that you may be able to use or modify to fit your needs. Using a pre-drawn plan will save time and money.

Once your plans have been drawn and you have filled out your building permit application paperwork, it is time to submit them for review to either the City or County Building department for, depending on where your property in South Lake Tahoe  is located. A set of plans will also need to be submitted to the fire department to find out if sprinklers will be required. You also need to bring your plans to Sierra Pacific Power Co. and to South West Gas to sign up for utility service. The building department will review your plans and either approve them, or send out a list of corrections that will need to be corrected before the plans will be approved. The review process can take from four weeks, to a few months depending on the time of year and the work load of the plan reviewers. In order to expedite the plan review process, plans can be sent out to a third party plan review company at an additional expense.

Once your plans have been reviewed, the building department will have you take a copy of them  to the South Tahoe Public Utility District to pay your water/ sewer fees. You will need to have found out weather the fire department is requiring you to install fire sprinklers ( if so, you will need to have a sprinkler system plan designed,  engineered, and approved). Water and sewer connection fees will range from $18,906 for a two bathroom home, to over $30,000 for a home with three bathrooms and a 1 1/2 fire sprinkler line.

Once you have paid your S.T.P.U.D. fees, you will need to obtain a bond pledged to the TRPA for the re-vegetation of your lot. This bond is usually between $3300 and $4000 depending on the size of the lot. Once all of the building departments conditions have been satisfied, and your plans have been unconditionally approved, the last step in the planning process will be to pay your building fees. The fees will be based on the buildings square footage and can range from $15,000 to $25,000+ depending on the size.

I hope that this will help you to understand the steps to begin your project. This was a quick overview of the planning process. A complete list of the requirements can be obtained at either the El Dorado County Building Department or the City of South Lake Tahoe Building Department.

Lots In South Lake Tahoe

Before you choose to buy vacant land in South Lake Tahoe, there are some things you should know!  First of all, you will want to find a lot that has the physical characteristics that you want  such as location, topography, views, size, ect… More importantly there are the local regulations,  codes, and restrictions  that the TRPA and the local building departments have implemented and enforce. I feet that the most important items to think about when choosing lots in South Lake Tahoe are IPES scores, coverage, and Allocations.

IPES stands for Individual Parcel Evaluation System. Each vacant lot in Lake Tahoe has been given an IPES score ranging from 0 to 1017 based on relative erosion hazard, runoff potential, access, stream environment zones, condition of local watershed, ability to re-vegetate, the need for water quality improvements near that parcel, and the distance from Lake Tahoe. The build-able IPES score for El Dorado County has recently been reduced to 1, which means that any of the lots in South Lake Tahoe with an IPES score of 1 or greater may apply for a building allocation. Although lots with an IPES of less than 726 may now be buildable, they may not have sufficient coverage to build. Additionally, coverage for lots with IPES below 726 is scarce, and can be very expensive! I advise my clients to find a lot with an IPES above 726 or make sure that it has enough coverage for your project.

Vacant lots in South Lake Tahoe are given a percentage of ground coverage that may be developed. For example, an 8000 square foot lot that has been allowed 30% coverage (30% is the maximum allowable coverage for lots over 6000 sf.) has 2400 square feet of ground coverage. What this means is that 2400 square feet of the lot can be covered with impervious structure such as the foot print of the building, driveway, walkways, decks, stairs, ect… . It is possible to build a 2800 square foot two story home with 1800 square feet of coverage.    If a lot less than 9000 sf. has less than 1800 sf. of coverage, or if a lot over 9000 sf. has less than 20% coverage,    it may  possible to transfer or purchase additional coverage. Additional coverage may be transferred from a parcel within the same hydrological area from a parcel with an equal or lower IPES. However there are guidelines to the amount of allowable coverage each size lot can have.  The maximum allowable coverage is 1800 sf. for lots that are between 4001 and 9000 sf. and a maximum of 20% for lots over 9001 sf. . Remember coverage for lots with IPES below 726 in all hydrological areas is scarce and expensive. Coverage for lots with IPES above 726 is also becoming harder to find in some hydrological ares, and may or may not be available by the time you are ready to build.   Again, to be safe, I recommend that you choose a lot that has enough coverage for your planned project.  

When you are planning to build a homes in South Lake Tahoe is another consideration. To build on your lot you will need a building allocation. There are a couple of ways to obtain an allocation. If your lot is in the City of South Lake Tahoe, you can get on the waiting list at the city building department by bringing in your grant deed,  proof from the TRPA that the lot is buildable , and a check for $1300. The wait can be from 9 to 11 years! If the lot is not in the city, but the county, bring the same information to the El Dorado County Building Department and wait 3 to 5 years. Another option is to but a lot that already has an allocation. Lots that have allocations are available at usually a higher price than those without allocations. A third option is to purchase and then deed restrict a sensitive parcel so the parcel may noe be developed in the future. The TRPA will assign an allocation to the parcel to be developed. These sensitive parcels have been selling for around $70,000. For lots with IPES above 726 there is one more option. A residential unit of use ( these come from tearing down and existing structure) can be transferred to a parcel with a development right, this together will give the parcel an allocation.

 I hope that this information will help you to make an educated decision when choosing to buy vacant Lots in South Lake Tahoe!

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