Jumbo loans are a different story.  One year ago, a 30-year fixed jumbo was 7.875%.  Today, it’s 5.75%, a 2.125 point drop.  The median price of homes in the jumbo arena dropped over 6%, so with both interest rates and value of those homes down, Buyers can buy much more than they could have a year ago.  So those who decided to “wait and see” made a good decision. 

HOWEVER, neither the interest rates nor the home prices will stay this low.  We certainly hope that Buyers trying to outsmart the market won’t be left out in the cold.  Literally.

In a slower real estate market, homebuilders are especially sensitive to incentives that catch potential buyers’ interest. Buyers have been showing up at new home open houses where the homes feature solar power. Part of the response is curiosity; part of it is a growing desire to decrease energy costs in their new homes.

Retrofitting a home with solar power equipment is costly, of course, even though it holds out the eventual promise of paying for itself (often in roughly 20 years) and providing the homeowner with the pleasure of selling electricity back to the local utilities.  In many cases, the cost of purchasing of solar power equipment is reduced by local, state and federal energy-saving programs.

The possibility of buying a new home that is fully equipped for solar power, though, lessens the sense that the buyer is paying a premium for the equipment. Some builders are using the equipment as much as they use incentives like free landscaping—and buyers are responding with great interest.

The thought at the outset was that the buyers of these lots would be able to turn the lots quickly, take a profit and leave.  As is the case with many people in this critical economy, that did not happen and now the sellers are trying to recover as much of their assets as they can. 

These lots are beautiful at 1/3^rd of an acre to over an acre, many in picturesque locations.  Most have breathtaking views of the mountains with close access to pristine lakes such as Boca, Prosser and Stampede as well as the Truckee River. 

Most of the Truckee subdivisions find themselves in much the same situation, with lack of sales and declining prices.  It is not unusual to find lots in the low $100s with some even lower.  We don’t think we will see opportunities such as this much longer. 

If you are looking for a transaction where you buy today and sell in a few months at a profit, those days are over and gone.  But, if you take the longer view on a purchase, we see the market recovering and rewarding forward-thinking individuals.  The question is, why and how?  The main reasons for the why?: we are a drive-to area with 15 million people loving to vacation here . . . skiing, boating, hiking, mountain climbing.  This summer and winter vacation spot is within 3 to 4 hours of the Bay Area and its surroundings.  Truckee is still priced considerably less than Utah, Colorado and other popular resort areas.  Thus, as more people find their way here, property values, along with prices, will rise to the next level.  In the end, we will not have the properties to support the projected demand.

This market condition is not just limited to lots, but carries through to homes.  It brings up an experience I have had all too often in my 22 years here with people who decided not to buy when the price was right, saying,” I wish I would have bought then; now, look at the prices”.