North Lake Tahoe- Real Estate Market Update

For the first time in two years pending home sales in July reached their highest point.  Closed sales continued on an upward path as a result, in June 3.8 million properties were for sale nationally compared with the 4.5 million properties last year.  This is another indication that the economy is becoming stronger particularly in regards to real estate.  The stock market has been rising, exports have been rising faster than imports and durable goods orders have risen for the third month straight.  The National Association of Realtors are forecasting higher home sales and stabilizing prices in the year ahead.

As good as these things sound there are a few things to be concerned with.  One is that even with inventories improving, it’s possible that many owners want to put their house on the market but are waiting for conditions to improve; banks could be sitting on the fence as well with foreclosed properties.  This could change the numbers next year flooding the market with inventory as the market recovers.

Second, there are economic factors that could hold back the economy recovering such as a large looking term budget deficit.  That could make higher mortgage rates which can hurt the real estate market making loans and property less affordable.  Also if gas and unemployment continue to rise foreclosures will rise through the remainder of the year.

I feel relatively confident looking at some of these indicators moving into the last quarter of the year with homes sales up and inventories shrinking and prices stabilizing.  These are all important conditions for the economy to grow and once that happens more jobs will be created and unemployment will drop.