Short Sales and Foreclosures a Thing of the Past
While driving through our community I noticed that one of the local real estate offices had a big sign out front promoting their free short sale and foreclosure list. What a short list it must be. After the remarkable turnaround that the Incline Village / Crystal Bay real estate market has made during the past two years it was quite a surprise to see anyone advertising the notion of distressed properties. With only one single-family home currently on the market offered as a short sale and not a single bank owned property listed on the Incline Village MLS as of the third week of February, it looks like distressed properties are going the way of the dinosaur on the Nevada side of North Lake Tahoe.
Over the 7 or so decades that real estate transactions have taken place in our community, historically there have been only a handful of distressed properties (if even that) in any given year. Property owners have bought and sold houses and condos rather freely, especially from 1995 through 2007. But the financial crash of 2008 – 2009 changed the equation for a few years as the market regrouped during times of economic uncertainty.
In the latter stages of the real estate boom, many people who would never have dreamed of owning property at Lake Tahoe stretched their finances to purchase properties that were sometimes beyond their reach. While Incline Village and Crystal Bay did not get hit nearly as hard as communities in the California Central Valley and elsewhere, there was still a shakeout in the local real estate market.
As of this writing, there are 178 houses, condos and freestanding condos for sale and only one of them is a short sale. Even more striking, there is not a single bank owned property listed for sale on the Incline Village MLS as of this writing. With just one lonely house out of all the properties currently for sale falling into the distressed property category, buyers can no longer try to bargain from the perspective that there is a lot of inventory being held by sellers who need to bail out quickly.
We have clearly made the transition from a buyer's market to a seller's market since coming off the bottom in January 2012. The inventory of properties for sale is at its lowest point in nearly 8 years yet demand remains strong for properties in all price ranges. Many properties that did not sell during 2013 and that are currently off the market for a wintertime hiatus will come back up for sale with asking prices between 5% and 10% higher than before.
So it is with much joy and happiness that just about everyone connected to the real estate world can say goodbye to short sales and bank owned properties in Incline Village and Crystal Bay. While there will be the occasional stray transaction in the distressed property sector, these sales will make up a tiny fraction of market activity in 2014. There are a couple of groups of people who will be upset to see this part of the market dry up, but the negotiators and other intermediaries who placed themselves between property owners and lenders for the most part did not contribute anything in the way of significant value to the real estate transaction.
In the earlier stages of the short sale business some of these people posing as negotiators were nothing more than parasites trying to extract money from distressed property owners, anxious buyers, lenders, real estate agents and anyone else connected to the transaction. While the original Wild West style of short sales and bank owned transactions was eventually replaced with a more regulated system, nontraditional property sales continued to consume a disproportionate amount of time, energy and resources. Agents who re-branded themselves as distressed property experts during the downturn will have to reinvent themselves again if they wish to compete in a real estate market that has returned to more normal times.
Having a healthy real estate market with a long-term historical uptrend in prices and demand provides excellent benefits for the overall economy at North Lake Tahoe. Every type of business affiliated with the world of real estate is seeing a general increase in income and profitability. As a community we can basically say good bye to distressed property sales and look forward to a positive future for real estate in Incline Village and Crystal Bay.