Tag: Lake Tahoe real estate

JUST LISTED: 160 CHERRY STREET

Posted on by Liza Muhl

Custom home mountain lodge

JUST LISTED

160 Cherry Street, Homewood, California

6 BR | 5.5 BA | 5670 SF

Listing  Price $10,200,000

Situated on 2.38 acres and backing to Forest Service land, this property encapsulates privacy and seclusion without compromising your proximity to the lake. As a member of Tahoe Swiss Village’s homeowner’s association, you can enjoy the use of two buoys, two piers, and a private beach located just across the street. This custom home was initially envisioned as a mountain lodge with an industrial feel, and the dedicated group of minds behind it brought this vision to life. It was designed, engineered, and built by local teams who have a deep affinity for this area and worked together to seamlessly integrate the intimate characteristics of the home with the nature that surrounds it. The methodical detail put into every decision is evident from the moment you walk in the 10-foot front door.

Completed in 2020, this home features endless unique components, such as a hanging staircase made out of forged steel, the use of reclaimed wood from the original Tahoe Tavern pier that was used for multiple pieces throughout the home, a custom A-symmetrical front gate, a 20-foot stone, floor-to-ceiling, double-sided fireplace centered in the great room, and much more. The main home has five bedrooms, four and a half bathrooms, and a 1,400-square-foot deck with a covered patio and wood-burning fireplace. The guest house is a fully detached one-bedroom, one-bathroom unit with four additional built-in bunk beds to accommodate both friends and family.

Nestled between the guest and main homes is an outdoor patio with a gas fireplace and a 30′ outdoor water feature. There are two separate garages that can comfortably house five cars and a boat. The radiant heat, air conditioning units, air purifying system, elevator, and heated stairs and driveway are the finishing touches to ensure life at Cherry Street is as effortless as it gets.

For showing appointment, contact Amie Quirarte.

FED HIKES RATES FOR 10TH TIME

Posted on by Liza Muhl
BY EPHRAIM SCHWARTZ
Partner, Mortgage Consultant CMPS
O’Dette Mortgage Group
May 8, 2023

This past week the Federal Reserve raised rates for the 10th time in a little over a year. Let’s discuss what happened as we await yet another Fed rate hike next Wednesday.

“Was it something I said or something I did? Did the words not come out right?” Every Rose Has Its Thorn by Poison.

The Last Hike?

As we expected, the Federal Reserve raised the Fed Funds Rate to a range of 5.00% – 5.25%. Remember, this interest rate affects short-term loans like credit cards, autos, and home equity lines of credit.

The big question is whether this will be the last hike. When the Fed statement was released, the markets believed the Fed was signaling a pause by omitting the following line from the previous statement: “The Committee anticipates that some additional policy firming may be appropriate.”

However, shortly after the statement was released, Fed Chair Powell hosted a press conference and right at the top said the Fed Members have not discussed a “pause” in rates. Bottom line? Expect more uncertainty and volatility as it relates to rates.

Sound And Resilient

This is the term Fed Chair Powell used to describe the banking sector. Unfortunately, we are seeing more banks have issues. This week it was First Republic taken over by JP Morgan Chase and as of this writing PacWest was said to be “exploring strategic options.” The fear of banking contagion has elevated uncertainty in the financial markets. It’s not clear if and how many more banks will continue to have issues. Bottom line? The fear of this story has created a “safe haven” to trade into bonds where prices move higher, and rates move lower.

European Central Bank Hikes By Less

The European Central Bank (ECB) hiked their benchmark rate by .25%, the smallest since the start of their hiking cycle. Like our Fed, they too signaled they would be “data-dependent” going forward, leading markets to speculate a pause on future rate hikes.

Bottom line: The Federal Reserve is sending mixed messages on the future direction of rates. Meanwhile, long-term rates, which the Fed doesn’t control, are near their best levels in months and sense all the uncertainty in our economy will prompt the Fed to pause and potentially cut rates later this year. The incoming data and issues in the banking system will determine what happens next.

Looking Ahead

Expect market volatility to continue next week. The Consumer Price Index (inflation) will be reported. If this number comes in higher than expected, rates could rise. The opposite is true. Despite this being a backward-looking number, we will have Fed officials continue to speak and comment on the release and how they feel it impacts future Fed policy and interest rate decisions.

 

Changes to LLPA’s on May 1st

Posted on by Liza Muhl
BY EPHRAIM SCHWARTZ
Partner, Mortgage Consultant CMPS
O’Dette Mortgage Group
April 27, 2023

We’ve been getting a lot of questions about the new LLPA (loan level price adjustment) for Conforming loans and if people with worse credit will really get better rates than borrowers with excellent credit.  The short answer is NO, and your clients should never intentionally damage their credit.  Surprise, surprise, there’s some entirely incorrect information circulating that your clients may be exposed to.  Below is an explanation and FAQ’s:

What is changing?

Fannie May & Freddie Mac base pricing adjustments for credit scores & down payment are changing.  Borrowers with a lower credit score & lower down payment will not be as heavily penalized.  And, borrowers with best case scenario credit scores & down payment will receive less of a benefit than before.  So, the difference in rates between best case credit profile vs. lower credit score will be less significant.  These changes apply to every conforming loan funded by each & every mortgage company.

Does this mean borrowers with lower credit scores get better terms than those with higher credit score?

No.  People will still be in better position with a better credit & more down payment.   The difference between excellent & lower credit tiers will be less significant.

When does this go into effect?:

It’s been priced into rates for over a month now.  The May 1st date is when these adjustments go into effect for the mortgages purchased on the secondary market by Fannie/Freddie.   Banks knew this was coming, so these changes have already priced in and borrowers will not see any changes to rates over the next week, outside of the normal day to day bond/rate fluctuations.

What is the FHFA trying to achieve with these pricing adjustment? 

We all know Fannie/Freddie’s mission to increase access to affordable housing.  It’s always been their mission and it’s been a priority for the director of FHFA.   The new director of the FHFA has been vocal in disapproval of the solutions provided by Franny and Freddie and she thinks more is required of them to increase access to affordable housing, and she thinks this will help increase access to affordable housing.

Is this a good idea and will it work?:   We don’t like it but the whole world has to deal with it, so it is what it is at this point.  We do not see these pricing changes moving the needle in making homeownership more attainable for more Americans because even after these changes a borrower with low 600’s credit score is still better off going with an FHA loan, and those who have done a great job managing credit are stuck a hair worse pricing.  A better idea would be a campaign to educate people on how to manager credit; it’s not complicated and the information could be shared on something as simple as this one page I put together and have been sharing with clients for over a decade (see attached).   WE (all of us on the real estate community) continue to be the front lines in educating the public on all things related to buying, investing, & enjoying real estate.

Credit Health Tips

If you want to dig into the details, here are some example of scenarios that will be most affected: Attached is a matrix showing which scenarios have pricing improvements (green) vs. hits (red), relative to the old standard LLPA’s.

  • LTV’s in the 80% – 85% range are most significantly affected, so more borrowers in the ~19.99% – ~15% down might consider just doing 10%.
  • Cash-out refinances hits are mostly greater, unless you have top tier (>780) credit, or extremely low LTV (<30%).   So, cash-out refi is actually a scenario where if credit is >780, pricing adjustments have improved.
  • Price improvements for 2 & 3 unit properties.
  • Price improvements for low LTV investment properties.
  • Vacation Homes & Investment Properties essentially priced the same now.

LLPA Changes 2023

SVB FAILURE AND RATES

Posted on by Liza Muhl
BY TERESA O’DETTE & EPHRAIM SCHWARTZ
Mortgage Consultants
O’Dette Mortgage Group
March 21, 2023

Quite an exciting week and a half and I have some additional commentary to share in addition to this week’s MMG update (below).   Silicon Valley Bank failed for several reasons, and while it is of course the bank’s responsibility to manage risk, it was the Fed being late to the game in hiking the Fed Funds rate and then hiking so much in such a short period of time that pushed SVB’s bond holdings so significantly underwater.   SVB held a large position in government bonds, which are generally considered the world’s safest parking for money, and those bond yields were as close to zero as they’ve ever been.   A bond’s value on the market can be determine primarily by; it’s yield the maturity.   So, when the Fed hikes rates rather drastically in a such a short period of time, new bonds become available with a dramatically higher yield, in comparison to those bonds SVB & others were buying just a handful of months earlier – with a relatively small difference in maturity.   This put the value of those bonds underwater, but that’s not what caused the problem.    If SVB had been able to simply hold those bonds to maturity, there would have been no loss.  However, after some prominent VC’s yelled fire in the theatre & sparked a run on the bank with depositors to pulling money out, SVB quickly tried to raise capital to cover those withdrawals, and when they couldn’t raise money, they were forced to sell those underwater bonds to cover the withdrawals.   Yes, there are some things SVB should have done differently, like fill that Risk Management Officer role that sat vacant tail end of last year, and hold less in such low yield bonds, but it was the Fed’s concentrated rate hikes that pushed those low yield young in maturity bonds underwater.   The bank failure was backstopped by the Federal government working with FDIC to use funds from the FDIC insurance pool to guarantee all depositors would be made whole.   No tax payers dollars were used for this bail out, bank executives are being held accountable for poor risk management, and many who are often most critical of government intervention in markets agree, the administration & FDIC did an excellent job solving this potential crisis.

With respect to how all this this impacts mortgage rates, US bonds & treasuries are still the world’s safest parking for money, so SVB inspired concern surrounding regional banks has created a flight to safety with investment capital going into bonds, that demand pushes bonds prices up & yields/rates down.  As a result, the past week has seen the most significant improvement to mortgage rates since the November & December CPI (inflation) reports came in lower than expected.   Last week’s (3/14) CPI report came in exactly at market expectations of 6.0%, which allowed mortgage rates to hold on to gains.  This week’s Fed meeting is another potentially high impact event.  Wild week, but with respect to mortgage rates, they improved a bit last week and we expect inflation to continue gradually decrease and we still expect mortgage rates to be a little lower by end of this year – best guess would be mid/low 5%’.s

This past week, home loan rates improved to their lowest levels in a month in response to the closures of Silicon Valley Bank (SVB) and Signature Bank. Let’s walk through what happened as we approach the Fed Meeting next week.

“Bringin’ on the heartache, Can’t you see?, Can’t you see?” Bringin’ on the Heartbreak? Def Leppard.

SVB Failure and Rates

It’s important to remember that bonds enjoy bad news, so when word broke earlier this week that SVB was shuttered by the FDIC, home loan rates improved to their best level in six weeks. At the same time, the 2-year Note yield, which tracks Fed rate hike activity, plummeted from over 5.00% to under 4.00% in just a couple of days. This was an epic decline in rates not seen even after 9/11 or the Great Recession.

The good news (in the case of SVB and even Signature) is that bad management, failure to manage interest rate risk and a widespread desire for depositors to gain access to their funds (bank run) is what caused these banks to shutter.

In response, the Federal Reserve immediately created a line of credit and an implicit backstop to protect any depositors from any losses. This was good news and will hopefully limit any further fallout in the banking sector.

So, what does the Fed do with rates now that we have high uncertainty and contagion risk in the banking sector?

Stability > Inflation

Seeing that one reason SVB failed was in response to a rapid rise in interest rates, there is increased pressure for the Fed to limit rate hikes going forward and regain stability in the financial sector.

Just last week there was a high probability the Fed would raise rates by .50. Now just days later, there is a 75% chance of a .25% and a 25% chance the Fed doesn’t hike rates at all.

Next week’s Fed Meeting and press conference will hopefully have the markets feeling that the Fed is going to take every measure possible to ensure stability while they closely watch the pace of inflation decline.

Housing Numbers OK

It wasn’t all bad news this week. Housing numbers for February highlighted the little rate relief we saw in January and brought some optimism into February. Both Housing Starts (which is putting the shovel in the ground), and Permits (a leading indicator of future building), came in better than expectations.

This bodes well for housing in the months ahead, especially combined with the rate relief we are experiencing.

Bottom line: This week’s news in banking has changed everything as it relates to the Fed and rate hikes. The markets are suggesting the Fed will be cutting rates in the second half of the year which is a big change from the rate outlook just days ago.

Looking Ahead

Next week brings the Fed Meeting and monetary policy decision. As we shared, it appears the Fed is only going to raise rates by .25%, rather than .50% to foster stability in the financial markets and avoid contagion in the banking sector. What the Fed says will be important in bringing calm to the markets during this uncertain moment.

Good Economic News is Good News

Posted on by Liza Muhl

Interest rates hover near the best levels since September, despite several good economic readings reported. Let’s discuss what happened and see what is coming next week.

“Hey, alright now And don’t it feel good” – Walking on Sunshine by Katrina and the Waves

BY TERESA O’DETTE & EPHRAIM SCHWARTZ
O’Dette Mortgage Group
January 30, 2023

Economy Grew to Finish 2022

Gross Domestic Product, a measure of economic growth, for the Fourth Quarter 2022 showed the economy expanded at a 2.9% annual rate, down slightly from the 3.2% rate in the Third Quarter 2022. Seeing the economy grow in the back half of 2022 after negative growth in the first half of 2022 is good news.

This positive reading elevates the chance of a “soft landing” by the Fed, where they hike rates to slow inflation but do not slip us into a recession.

Unemployment Line is Historically Short

Initial Jobless Claims for December came in at 186,000…the lowest reading in 9 months. This is also good news as it tells us the length of the unemployment line. If the amount of people signing up for first time unemployment benefits remains near historical lows, it further lowers the chance of a recession. Moreover, it highlights the continued strength in the labor market, and this is paramount as jobs buy homes. Yes, we want interest rates to move lower but if someone doesn’t have a job or is in fear of losing their job, they can’t commit to a home purchase. Let’s hope the labor market remains strong as the Fed continues to hike rates to slow demand and lower inflation.

New Home Construction Costs Coming Down

The National Association of Homebuilders reported that building materials costs, less energy, are up 8.3% which is a big increase annually. However, the price growth is down a staggering 60% as input costs increased over 16% in 2021.

We should expect input cost growth to slow further in response to slower demand and further reopening of supply chains. This is another positive theme as we move through 2023.

Smaller Fed Rate Hike Still Priced In

One of the headwinds to the economy is the threat of higher short-term rates by the Federal Reserve. The good news there? After four consecutive .75% rate hikes, followed by a .50% hike in December, the financial markets are fully pricing in a smaller .25% hike at next week’s Fed Meeting.

The markets also believe the Fed will raise rates by another .25% in March and then pause to allow all the hikes that date back to last summer to seep into the economy.

This means the Terminal Rate, or the fancy way of saying the peak in the Fed Funds Rate, is going to be in a range of 4.75- 5.00%. From there we will have to continue to watch the standoff between the Fed who says they want to keep rates higher for longer. Additionally, with no rate cuts this year versus the financial markets, which are starting to “price in” as many as two rate cuts later this year.

Bottom line: The economy is showing mixed signals, but the labor market remains strong, and we are nearing the end of Fed rate hikes. So, the plan to land the U.S. economy softly and avoid a deep recession remains very much in play. That is good news for housing and the economy.

Looking Ahead

Next week is Fed week. As of this moment, the markets fully expect the Fed to raise rates by .25%. Anything other than that would be a surprise and generate a lot of market volatility. The Fed generally looks to avoid sending the market mixed signals but the markets will be on edge.

The Winds of Change – 2022 Year in Review

Posted on by Liza Muhl

Change is the only constant in life. After two years of a COVID-fueled buying frenzy that produced stratospheric price spikes across all segments of the market, 2022 brought a bucket of icy lake water on the head. A dramatic reversal of economic conditions fueled by the Ukrainian conflict, historic interest rate hikes, a crypto collapse, and the erosion of equities rippled through Tahoe real estate. For the first time since COVID, we saw a noticeable lack of urgency as buyers were willing to wait on investing in vacation homes. By mid-summer, both supply and days-on-market had distinctly increased. Gone were the days of multiple offers within days of listing homes and the manic-ness we experienced since the pandemic onset. By the third quarter, we saw a palpable calm in luxury real estate sales. In fact, only 11 single-family lakefront homes between Rubicon Bay and Incline Village sold all year, the lowest we have seen since before our reporting began in 2006. Yet, median price has been slow to respond. As a result, in 2022, each micro-region (with the exception of lakefronts due to small sample size), saw median price reach historic highs, while sales volume decreased significantly. The disparity between median price and demand, alongside uncertain market conditions, continues to contribute to buyers willing to remain on standby, waiting for market corrections and for economic indicators to improve confidence.

As sellers reset to the new normal, we expect buyers to start to again pull their paddles from beneath their chairs in 2023. For buyers who have been patiently awaiting value opportunities, 2023 should present well. While the selling environment is not as favorable as it has been over the past few years, sellers can still take advantage of the historic run-up in pricing from COVID. However, it will be imperative that sellers adjust expectations on pricing and time on market. As we close the chapter on the COVID-driven real estate binge, the winds of change will still blow in opportunities around Lake Tahoe.

Points of Interest: January – December 2022

  • Single family homes sold decreased 19% year over year.
  • Median price increased 7% year over year and is on a 7-year growth trend.
  • Sales volume reached a 8-year low. Median price reached an historic high.
  • 210 of 903 homes (23%) sold over $2 million.

Points of Interest: January – December 2022

  • Single family homes sold decreased 10% year over year
  • Median price increased 24% year over year and is on a 5-year growth trend.
  • Sales volume reached a 6-year low. Median price reached an historic high.
  • 210 of 903 homes (63%) sold over $2 million.

Navigating the Path to Homeownership

Posted on by Liza Muhl

UPCOMING EVENT

Want to buy a home in Tahoe/Truckee but not sure where to begin? Join Amie Quirarte with Tahoe Luxury Properties and Chelsy Delia with The Rice Team at Guild Mortgage for an informative presentation on Navigating the Path to Homeownership from two home-buying experts who will guide you on a path toward buying your first home.

BEST LAKE TAHOE SKIING: WHAT RESORT IS RIGHT FOR YOU

Posted on by Liza Muhl

Play, Stay & Enjoy Lake Tahoe this Winter

Whether your getting out on the slopes for a short weekend getaway or a day trip, Lake Tahoe is famed for our expansive selection of downhill ski resorts boasting a variety of terrain, from some gentle broad slopes, some hilly hills and forested slopes or cross country. If you love the outdoors and are a fan of winter’s snow and cold, nothing beats skiing in Lake Tahoe. We have provided our favorite insider’s tips below to help you choose where to ski this winter.

Best Lake Views

Homewood Mountain Resort: Located on Tahoe’s magical West Shore, Homewood is a laid-back mountain that is known for its deep powder, well-spaced trees, and panoramic views of Lake Tahoe. With a mix of gentle beginner slopes to more intermediate and advanced runs, there’s something for everyone at Homewood. It’s certainly a hidden gem, not only for its lake views, but also its secret powder stashes on a snow day.

Diamond Peak: This family-friendly resort in Incline Village boasts world-class snowmaking and grooming, fun events for the whole family, and comprehensive lesson programs. Drink in dramatic views of Lake Tahoe from the sun deck of the Snowflake Lodge. Diamond Peak’s mid-mountain bar and eatery.

Plenty of Beginner Terrain

Boreal: Take 3, Ride Free at this small mountain with a big attitude on Donner Summit. When you purchase three lessons, you get a free season’s pass. Boreal is the only mountain in Tahoe/Truckee that offers night skiing. The onsite Woodward Indoor Park offers 33,000 square feet of ramps, foam pits, and trampolines; perfect for honing those ski and snowboard skills out of the elements.

Donner Ski Ranch: This historic mountain is family-owned and operated, and boasts some great terrain as well as affordable rates and a variety of lesson options. First time bringing the little ones out to ski? Take advantage of their $15 magic carpet pass with a $15 equipment rental to get the kiddos used to the sport.

Tahoe Donner Downhill Ski Resort: Tahoe Donner knows families. From affordable beginner packages to a helpful staff, Tahoe Donner knows how to make learning to ski and ride a family-friendly experience. It’s known as the best place to begin, with impeccable grooming, wide open slopes, and great beginner programs. Also, onsite are a number of eateries, weekly events, and a snow play area.

Advanced Terrain

Northstar California: Fun off-piste terrain, world-class terrain parks, and wide open groomers make Northstar a great destination for all levels of skiers and riders. The bustling village offers plenty of apres-ski events and specials – you may never want to leave!

Palisades Tahoe: Host to the 1960 Olympics, Palisades Tahoe is renowned for its varied terrain. Once two mountains, now merged, the resort offers a combined 6,000 acres of terrain. From wide-open bowls in the side-country to inbound cliffs and technical tree runs, advanced skiers (beginners and intermediate, too!) will love exploring this resort any day.

Sugar Bowl Ski Resort: Sugar Bowl is another family-owned and operated ski resort located on Donner Summit. Its high elevation means huge amounts of snowfall, and the uncrowded slopes and short lift lines make it a local’s favorite. The terrain varies from beginner to advanced. Intermediate and advanced skiers and riders will enjoy 1,650 acres of wide-open bowls, long groomers, and inbound cliffs and features that make this mountain unique.

Mt. Rose Ski Tahoe: Experience beautiful Lake Tahoe views, tons of powder, and over 1,200 acres of 70% intermediate-to-advanced terrain at Mt. Rose Tahoe. The base elevation of this mountain, which is conveniently located between Incline Village and Reno, is 8,250 ft. – the highest in Tahoe. High elevations means good snow in Tahoe, and Mt. Rose is fun for powder-hounds and groomer-heroes alike.

2022/2023 Resort Winter Skiing

Posted on by Liza Muhl

The Lake Tahoe 2022/2023 ski season is here! While ski resort opening dates are always subject to weather and conditions, it sure does give us something to look forward to. As the nights get chillier, we start to envision our ski season ahead. So get your skis waxed and your gear ready because powder days are ahead!

Ski Resorts

Boreal Mountain Open Now

Experience the magic of Boreal’s sunset session every night! The Night Pass gives unlimited access to the mountain from 3:00pm – 8:00pm.

Mt. Rose Ski Tahoe Open Now

New this year: Estimated to be the largest capital improvement project in the resort’s history, the new Lakeview Express chairlift will be a key piece of Mt. Rose’s effort to enhance the overall experience in the “Lakeview Zone.” The plan includes trail additions, existing run improvements, and new skier traffic patterns, offering even greater access to beginner, intermediate and advanced terrain and help give skiers and snowboarders of all ability levels a more enhanced mountain experience.

Stay nearby

Northstar California & Heavenly Open Now

New this year: Celebrating their 50th anniversary, Northstar will open with the newly upgraded Comstock Express lift, now a high-speed 6-person chairlift. New passholder perk: With early lift access every Monday, Northstar passholders can load chairlifts at 8:30am for First Tracks on Monday, starting in December.

Stay nearby Northstar   Stay nearby Heavenly

Palisades Tahoe Open Now

New this year: A base-to-base gondola connects Palisades and Alpine. Guests will enjoy easy access to 6,000 acres of terrain. The 2.4 mile gondola ride will transport guests between The Village at Palisades Tahoe and the Alpine Lodge in 16 minutes, with the option for expert skiers and riders to unload at the KT-22 mid-station. The gondola is expected to be running by mid-December, weather permitting. Red Dog chairlift is replaced with a high-speed 6-seather and also is expected to open in December, weather permitting. Expanded mountaineer operations, plus snowmaking and lodge enhancements.

Stay nearby

Sugar Bowl Open Now

New this year: Sugar Bowl joins the Mountain Collective. The Sugar Rush snowtubing park will have a 400′ magic carpet accessing 10 lanes of tubing, plus a sweets station for kids and a bar for adults, open on weekends and holidays and some evenings.

Stay nearby

Diamond Peak Opens Thursday, December 8

New this year: New surface lift for the Child Ski & Ride Center, relocated terrain park, new RFID access gates, and guided after-hours snowshoe hikes.

Stay nearby

Homewood Mountain Resort Opens Friday, December 9

See first-hand why Homewood is “Where the Mountains Meet the Lake.” Two hundred eight steps from lift-to-lake gives Homewood an unbeatable lakeside skiing experience.

Stay nearby

Tahoe Donner Downhill Opens Friday, December 9

For nearly 50 years, Tahoe Donner Downhill Ski Resort has provided families a unique and affordable ski experience. Committed to being “the best place to begin” and offer ski instruction for children as young as 3 years old. Enjoy wide-open bowls, uncrowded slopes, gentle beginner terrain, and excellent grooming.

Stay nearby

Happy Skiing!