Where readers ask and we try to answer:
How do you think this new economic plan will affect Californian’s second-home purchases in 2008?
Damn good question. Anyone?
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Where readers ask and we try to answer:
How do you think this new economic plan will affect Californian’s second-home purchases in 2008?
Damn good question. Anyone?
I don’t think it will do much of anything frankly. The second home market at the mid and lower and of the spectrum will not be helped by the rebate or the raise in conforming loan ceiling. People in these markets will be more concerned about their first home. At the upper end of the spectrum, these buyers will be unaffected.
At the most, with regard to housing in general, by raising the conforming loan limit, this will lessen some of the downward trend at the bottom and middle end of the market (likely to be addressed by this new conforming loan). It’s the story of cheap money. If your money costs less you can bid more. I wouldn’t say it would be dramatic in the short term though.
My thought is that this will actually increase the number of second home purchases. If a buyer can get a significantly lower rate with a conforming loan I would think they would be more likely to buy speculative property (I refuse to call it investment property) since the opportunity cost of the funds is lower.
I’m hearing the Tahoe market is heating up, especially in North Tahoe. I know a couple condos at The Resort at Squaw Creek sold recently (www.squawcreek.com). Maybe it’s b/c this winter has been fantastic! 2-4 feet this weekend and I’m up here now :)
This subject was custom made for you to spam, wasn’t it Resort?
Yeah the Tahoe market is “heating up”. I sure hope so, with 12 months of inventory, sales volume at an all time low, prices down, and realtors openly announcing that 50% of their listings won’t sell within the next calendar year, it’s hard to imagine the Tahoe market getting any colder.
Yeah, I dunno. I have seen Truckee undergo a real change in valuation, perception and fundamentals in the last two or three years.
I think people are still far too skiddish about recession to spend their cash on an unneccesary purchase like a second home. Especially one in a vacation destination like Tahoe.
My non-retirement dollars are mostly in CDs, metals, etc. atleast until this summer/fall.
Not really surprised by RSCs answer. Must be a realtor there or something.
Well, there’s no secret that I love Tahoe. :) I always buy when others say “market can’t get any colder” and things of that nature. I’ve done very well ove the past 16 years implementing contrarian investing.
At the end of the day, it comes down to what your cash flow/rental yield is on your property. I am getting 6.5% rental yield on my vacation property now, and get to enjoy it for “free”. If I rented out the place myself, I could lift that yield to 10%. Compare with 3.5% on the long bond, and i’m very happy.
Life is about living. But again, it’s your perogative for renting and saving as much as possible. For me, I work had for my money, and I want to enjoy life as much as possible. Buying a vacation rental is a different animal. The #1 focus is not on making money, it’s about lifting the quality of your life. At the end of the day, all you have are memories. I’ve had some of the best memories skiing down powder days at The Resort, and relaxing in the hot tub right after. These experiences and memories are priceless. If the value goes up, so be it, but i’m own my Resort condo for lifestyle.
I can’t wait for conforming loans to each 625K. Another $300/month is savings, while Resort rates keep going up.
Off to the slopes I go! It’s absolutely SICK up here!
RSC
[Editor’s note: We do appreciate when all readers pick one “handle” and stick with it. We get to know each other that way. IF you feel you must change names, by all means, go ahead, because as you all know, we’re taking a step back from moderating.]
RSC
I can hear a harmonious STFU from everyone on this site directed at you. Nobody cares about your condo, lifestyle or powder days. I just got back from my condo at Whistler. You think the snow at Squaw is good? Now lets talk about real estate like the authors of this blog intended.
Life is about “living” and living means trolling every real estate forum to post about the Marina and Resort at Squaw Creek under numerous handles 24/7. Nice.
Why so much jealousy over RSC Wanda and NotsoPrime? Just because he loves to ski, and owns a vacation property, no need to be nasty and jealous. It’s as if he has a following or something!
At the end of the day, the economic stimulus plan is greasing the system, and will result in more second home sales, and probably continued likely prices. Furthermore, homeowners are going to rationally refinance at lower rates.
I think there are a lot of people waiting, and the pent up demand is seriously entering back in.
Jimmy
rsc represents an interesting trend i’ve noticed over the past few years. how many people do you know that moved to the foothills or tahoe and bought but still work here in the bay area? they did it since they couldn’t afford to buy here but they commute back when need be to make a buck. i feel bad for them having to drive that much but i understand wanting to own and why not own in a beautiful place, of coure beauty is in the eye of the beholder and places like truckee or el dorado hills where you have mcmansion after mcmansion and you can’t escape your neighbors view into your place form their windows 4 feet away from yours.
;)
According to RSCs many handles, he not only owns in Squaw Creek, but he owns in “prime” Marina as well. The Front Steps isn’t the only forum he spams for these properties. I just saw him posting over on SFGate in the article about foreigners buying up SF real estate:
“There are LOADS of foreigners from Asia and South America who are looking, and who have bought in DISTRICT 7 (Marina, Pac Heights, Cow Hollow). Also, I’m seeing a big pick up in foreign buyers at THE RESORT AT SQUAW CREEK (www.squawcreek.com) for example. A Brazilian couple just bought a 2/2 for $800,000 four weeks ago. Condos in SOMA ie Millenium Towers also gaining a lot of interest. Foreigners are moving in, and locals on the sidelines keep on getting pushed aside. Sad.”
RSC – I think you have an obsessive stalker. Watch out! Do you own or rent Notso?
I’m personally waiting to see the gov’t put into law the conforming loan limit to $625K or more, and then look. It’s either a vacation property for me in North Tahoe, or maybe a place in Napa/Sonoma.