2005 is proving to be another robust year for real estate here in South Lake Tahoe. The median sales price for a single-family home has increased an amazing 21% during the first six months from $379,000 to $460,000. It has truly been a seller’s market, especially for homes priced under $500,000. This high demand is fueled by the insatiable thirst for the Lake Tahoe vacation lifestyle. Many of these buyers are purchasing a vacation or second home that also serves as a great investment. The sharp increase in prices has spurred many homeowners to put their residences up for sale. Currently, there is a high inventory of listings and some asking prices have been reduced. This represents an excellent buying opportunity that will last for only a few weeks. If you have ever considered buying a home in the Lake Tahoe area, I invite you to call me personally at Paradise Real Estate toll free, 800-996-2001. I will show you how you can make the perfect investment for your family’s future.

The real estate market in South Lake Tahoe, California continues to sizzle according to Dan Spano, President and CEO of Paradise Real Estate. “Everyone loves Lake Tahoe! The relaxed mountain lifestyle provides the perfect retreat from the fast pace of the working world. There is very strong demand from out of town buyers, particularly in the Sacramento and San Francisco metro areas. Many of these buyers are purchasing a second home in Lake Tahoe as an investment. It is used primarily for vacations and/or rental income.”

“Add in the local demand from investors and developers and it is easy to see why home prices continue to appreciate” Spano continued. “The median sales price of a single-family home in South Lake Tahoe doubled in the last 4 years from $189,000 to $379,900. However, that is nearly $100,000 less than the median sales price for the State of California. Homes priced under $400,000 are snapped up immediately. It is definitely a sellers market.”

The “baby boomer” generation is another dynamic that is increasing demand for Lake Tahoe real estate. This generation of Americans is accumulating a vast amount of wealth as they inherit money from their parents during their peak earning years. Trillions of dollars will be passed down over the next 5 years. This will easily provide the necessary income to purchase a second home.

The limited allocations to build new homes at Lake Tahoe will always keep supply low. We will cover that in our next blog.

Rates on 30-year mortgages climbed last week to their highest level in seven months. Mortgage giant Freddie Mac reported March 17 in its weekly survey of mortgage rates around the country, that rates on 30-year, fixed-rate mortgages averaged 5.95 percent for the week.

The rate was up from 5.85 percent last week and was the highest since the week ending August 5 when rates averaged 5.99 percent.Analysts said the recent pickup in mortgage rates reflects concerns in financial markets that high oil prices may touch off inflation. That “kept continued upward pressure on interest rates and helped fuel the rise in mortgage rates for the fifth continuous week,” said Freddie Mac economist Amy Crews Cutts.

Even with the recent increases, mortgages rates are still low by historical standards, analysts said. Freddie Mac is forecasting that rates on 30-year mortgages will rise to around 6.25 percent at the end of the year.

Low mortgage rates have powered sales of both new and existing homes to record highs for four straight years. A year ago, 30-year mortgages averaged 5.38 percent. The nationwide averages for mortgage rates do not include add-on fees or points. Thirty-and 15-year mortgages and five-year ARMs each carried a fee of 0.7 point.

Paradise Real Estate President Dan Spano does not think the higher rates will slow demand in the Lake Tahoe area. “Mortgage rates would have to reach 8 ½ or 9% to have any effect on the red hot Tahoe market.”

We will have more on that insatiable demand in our next blog.

The median price of an existing home in California in January increased 20.1 percent and sales increased 7.1 percent compared with the same period a year ago, the California Association of REALTORS® (C.A.R.) reported last month.

“We’re out of the starting gate with a bang. Both sales and the median price of a home hit new records in January as homebuyers continued to flood the market,” said C.A.R. President Jim Hamilton. “Although the inventory of homes for sale increased in January, it’s still low by historic standards. Buyers are taking a little more time before making an offer compared with last year, in part because the specter of significant increases in mortgage interest rates has diminished.”

Closed escrow sales of existing, single-family detached homes in California totaled 659,410 in January, an increase of 7.1 percent from the 615,660 sales pace recorded in January 2004. The median price of an existing, single-family detached home in California during January 2005 was $485,700, a 20.1 percent increase over the revised $404,460 median for January 2004, C.A.R. reported. The January 2005 median price increased 2.4 percent compared with a revised $474,280 median price in December.

“While we expect sales for all of 2005 to be below 2004’s record level, demand for housing in California continues to outstrip supply, which is reflected by the dramatic median price appreciation experienced by every region in the state,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Seven regions posted median price gains in excess of 30 percent compared with a year ago.”

“The median sales price in South Lake Tahoe is nearly $100,000 less than the state average!” exclaims Dan Spano, President of Paradise Real Estate. “South Lake Tahoe still represents an excellent value for both first and second home buyers.”

The median price of a single-family home at Lake Tahoe increased to $617,475, a 17% gain from 2003. The value of condominiums in the Lake Tahoe Basin increased by 27% in 2004 with a median price of $352,688. “The market remains very strong and our outlook is positive for 2005″ stated Dan Spano, owner of Paradise Real Estate. “The median price in South Lake Tahoe, California for 2004 was $379,000. That is 39% less than the Lake Tahoe median. There are still very good investment opportunities in South Lake Tahoe. Look for strong appreciation again in 2005.”