Why are there Distressed Properties in Lake Tahoe?

The number of distressed property listings in the Lake Tahoe area is continuing to increase. Due to the ongoing decline in property values, more and more property sellers are being faced with the realization that their properties are not going to sell for the amount of their existing loans. Additionally with so many property owners under water on their loans many homeowners faced with foreclosure are simply walking away from their mortgage obligations.

Although the foreclosure rate of the primarily vacation home driven market of Lake Tahoe is not nearly as high as the numerous areas of California, Nevada, Arizona and Florida, there are a fairly large number of distressed property listings, either short sales or REOs. Whereas in many high foreclosure areas the problems are mainly due to the excessive development and suspect lending practices, the vacation home driven market place has faltered for other reasons.

During the first part of this decade I observed many homeowners (1st as well as 2nd) take out multiple loans and lines of credit based on the perceived, over inflated, values of their homes. Now, over the past 3 years we are seeing the devastating effect of the 1-2 punch of a downturn in the economy and the rapid depreciation of real estate values. Specifically, homeowners who were leveraging their homes are no longer able to make the payments due to all of the varying economic, employment, spending and other factors. One of the first steps towards cutting back on one’s expenses is liquidating that vacation home. However, with the limited number of demand for such property, the market has become saturated hence values going down. Into the vicious cycle we go!

There are currently 1,791 properties for sale in the Tahoe Sierra MLS, of these, 245 are distressed (short sale or REO offerings) and 1,546 are standard listings. A 16% distressed property-listing share of the market.

Please find additional information about these distressed property listings and more at the following pages: http://www.realestate-laketahoe.com/Short%20Sales.htm, http://www.realestate-laketahoe.com/truckee-shortsales.htm, and http://www.realestate-laketahoe.com/Foreclosures1.htm