Thursday, November 24, 2016

The Lake: Your 2017 Lake Tahoe Real Estate Report

How is the real estate market in Lake Tahoe? That question defies a simple answer probably more than any area of the country, thanks to many contributing factors such as South Shore or North Shore, California or Nevada, condo or single family home, lakeshore or non-lakeshore, etc.

Luckily, we have plenty of data about the various micro-markets in Lake Tahoe, from which we can extrapolate an accurate picture of home sales in one of the nicest places on earth.  

What stands out? Which homes are selling fastest? Should you buy a condo or a home? What’s the real value to buying lakefront? Is the luxury market softening in and around Lake Tahoe? In what areas have prices dropped so we’re seeing great investment opportunities?

You’ll find all of the answers here, but you can contact us if you’d like a summary or our interpretation.

This data is based on the most recent findings of Sotheby’s International real estate report and encapsulates 2016 through Q3, as well as comparisons to the same conditions one year ago.

If you have any questions about buying or selling in Lake Tahoe – or would like to see more data on other micro-markets like Reno, Incline Village, Tahoe Keys, etc., please contact us anytime.


Monday, November 21, 2016

Kanye West walks out on Sacramento, but let's go backstage with the big-earning concert industry.

Last Saturday marked iconic and controversial rapper Kanye West’s first performance at the new Golden 1 Center in Sacramento. So how did it go? 

You've probably heard by now that he came out an hour and a half late, played three songs, brought out Kid Cudi, went on a nearly-nonsensical rant that has Snoop Dog even scratching his head, and then left the stage. 

When the lights came on, leaving thousands of concertgoers angry and bewildered, it ignited a firestorm of backlash against West, who also canceled a subsequent show in Inglewood and then the rest of his tour.

But it also raises the question: just how much do top music artists like West earn for one show?

Here are some estimates from 2015’s top-grossing live rap acts:

Kendrick Lamar: $125k+
50 Cent: $150k+
Nicki Minaj: $250k+
Lil Wayne: $300k+
Drake: $350k-$600k
Macklemore: $350k-$700k
Kanye West: $500k+
Jay Z: $1,000,000+

But those artists’ paychecks are dwarfed by BeyoncĂ©, who reportedly earned up to $4 million per performance for her On the Run tour.

These numbers are based on 2015’s concert stats, so a lot can change in one year as some artists become more popular and command even larger fees, while others drop out of favor.

Just how much did Kanye West get paid?

While it hasn’t been publicized how much Kanye received for his performance at Sacramento’s Golden One Center, if we assume he earned at least his standard $500,000 per show fee, that means:

3 songs/$500,000 = $166,667 per song

Or 30 minutes (of singing and ranting)/$500,000 = $16,667 per minute

The good news is that for the 15,000 Sacramento fans that had their time wasted by Kanye, StubHub is reportedly going to refund the cost of tickets.

But Kanye’s now famous lack-of-performance at the Golden One Center highlights the financial aspect of concerts and live music. So just how much money are we talking about?

Backstage with the financial details of the concert industry:

The live music and entertainment industry reportedly generates $25 billion a year in ticket sales.

2016 has been a banner year for live music and concerts, with 5.1% annual growth compared to the same time in 2015. That comes at a time when record sales have dipped significantly (in large part due to the digitalization of music and availability online).

The top 100 tours from the North American concert business alone raked in $3.12 billion in 2015, which is a major 14% increase from 2014.

That means we bought 42.08 million tickets to the top 100 live shows and concerts in North America that year, up 10% from the previous year and setting a new record.

The global concert business was also booming in 2015, with the top 100 tours grossing $4.71 billion, up 11% from 2014.

Global ticket sales for the top 100 tours were up 16% in 2015, with 59.78 million ticket sales The total tickets sold worldwide by the Top 100 was up that same 16% to 59.78 million sales.

Those numbers may be huge but they’re still shy of the record $5 billion profit and 63.34 million tickets sold in 2013.

The Concert and Event Promotion industry includes concerts but also dance performances, circuses, talent acts like the Blue Man Group, and even sporting events. But live music in concert still accounts for 58.55% of total industry revenue.

Kanye West not withstanding, every year, live music and concerts employ an estimated 221,795 workers and staff.

The most comprehensive data on the live music industry comes from Pollstar, which issued its annual state of the live music industry report in mid-2016.

According to that Pollstar report, the top 50 tours in the world had already earned just under $2 billion mid-2016, with six months to go.

That’s up 14% from the top 50 tour earnings at the same mid-point in 2015.

In that same six-month period to start 2016, those 50 world tours sold 22.6 million tickets sold, a 13.5% increase from 2015.

When we look at just North America’s concert earning figures, the top 100 tours generated $1.48 billion in the first part of 2016, up 3% from the same period in 2015.

The average concert now generates $32,000, which is a 5.4% increase from 2015. That number seems notably low, but remember that there are thousands of music artists and bands playing live shows and touring, and not everyone earns top dollar like Kanye West.

Ticket prices

Adjusted to real dollars, the average concert ticket price between 2011 and 2013 was $78. But that jumped to $82.07 in 2014. (If that sounds like an insignificant increase, multiply that by millions of ticket sales!)

However, following a well-planned trend in the live music industry, ticket prices are actually on the decline again in 2016. In fact, the average ticket price dropped by declined by 4% to $78.77.

The top grossing music acts:

Between 2000 and 2015, the top grossing music act was the Irish rock band US. They went on world tours in 2001, 2009, and 2011, and their 2011 tour was the highest grossing North American tour ever, generating $156 million.

Taylor Swift was a huge hit in 2015 with her massive world tour, bringing in more than $250 million in ticket sales and playing in front of 2.3 million fans.

$199.4 million of that was from concerts in North America alone, eclipsing the previous record of $162 set by the Rolling Stones on their epic 2005 tour.

But the band One Direction was the top global attraction last year, selling an industry-leading 2,364,390 tickets, but grossing “only” $210.2 million (just shy of Swift’s purse.)

In 2015, AC/DC’s word tour brought in $180 million, the biggest payday that band has ever seen.

Other top ticket sellers included:

Ed Sheehan 1.578 million tickets
Foo Fighters 1.365 million tickets
Kenny Chesney 1.363 million tickets
Luke Bryan 1.23 million tickets
Maroon Five  875,000 tickets
Ariana Grande  790,000 tickets
Dave Matthews Band 760,000 tickets


Look for part two of this blog where we cover more of the secret finacial reality of the worlds top music artists! 

Thursday, November 17, 2016

25 Interesting, Helpful...and Sometimes Gross Facts About the U.S. Hotel Industry.

Are you traveling to visit family this holiday season and will be staying in a hotel? Or are you and your loved ones heading somewhere warm and fun for a great winter vacation? Maybe you just travel out of town on business often? No matter what the circumstances, the average person stays in a hotel at least a handful of times every year. So we thought we’d put together some interesting, helpful…and even gross…tips about the U.S. hotel industry.

U.S. hotel industry by numbers-

1.   In 2015 the hotel industry generated a staggering $176.7 billion in revenue. Comparing this to the industry’s worst year in the last 15 years, where the industry made “only” $115 billion.

2.   The occupancy rate is at an all-time high at roughly 65%. Good news for the hotel industry compared the lowest point in the last 15 years that came in 2006 (52.6%).

3.   The average daily rate throughout the U.S. is now a record $121.37. The cheapest average in the last 15 years was in 2002 ($82.53).

4.   New York City, NY is the most expensive city to get a hotel room, with an average cost of $271 per night. Whereas Anaheim, CA is the cheapest, with the average being $144.

5.   New York City, NY also has the most hotels out of any city. The number currently being at 667, which is minuscule compared to the Beijing (4169).

Fascinating Trivia-

6.   Unsurprisingly, Las Vegas boasts the largest hotel in the U.S. The MGM Grand is the third largest hotel in the world, with 5,690 rooms. What’s more, 23 of the largest 35 hotels in the world are located within the same two-mile radius in Las Vegas.

7.   In 1910, the American Hotel Protective Association, or AHLA, was founded. At that time, they discovered that the U.S. hotel industry was made up of 10,000 hotels, 1 million rooms, and roughly 300,000 employees. At year-end in 2012, there were 52,529 hotels, 4.9 million rooms, and the hotel industry employed 1.8 million people. In 2012, hotels employed six times as many people as they did in 1910, but there are only 42,529 more hotels. In 1910, on average, each hotel only employed three people. Now, the average is about 34 people per hotel.

8.   The first official hotel in the U.S. was the Union Pacific Public Hotel. It was built in 1793 in Washington, D.C. In 1929, Western Hotels, which we now know as Westin, started their brand with 17 hotels in the Pacific Northwest. They established the first hotel management company in the country.

9.   Standing at 1,389 feet tall, the Trump International Hotel & Tower Chicago is the tallest hotel in the U.S. at 92 stories high. It’s also the fourth tallest building in the U.S.

10.   $2.1 billion of the $176.7 billion that is generated from hotels come as fees and surcharges. According to the U.S. Travel Association, “Each U.S. household would pay $1,060 more in taxes without the tax revenue generated by travel and tourism.”

Hotel Hacks-

11.   Once you've got a specific hotel or chain in mind, bypass calling the 800-number to make a reservation. Instead, do some research about their published rates, and then call the hotel front desk directly to ask what specials they have.

12.   If you haven't made a reservation, you might be able to score a lower rate if you time it just right. A little after 5 or 6pm, you have a shot at getting a cheaper room, or at least a better room for a standard price, if the hotel still has vacancies.

13.   If you have a mediocre experience at a hotel, call or email the General Manager and explain your stay to them. This will almost guarantee you to be at least upgraded each time you stay. To be on the safe side, build up a good relationship with the GM by calling them before your planned stays in the future, to let them know you are arriving. This will also usually get you an upgrade.

14.   If you’re staying somewhere for more than one week, contact the hotel directly to negotiate a lower rate. You can often negotiate up to 75% on nightly rates since it’s much less work for the hotel to keep one customer than to turn over the room constantly.

15.   If you have security concerns because your motel door directly opens outdoors where anyone can access, or the hotel is just marginal and you’re worried about break-ins, hang your ‘Do Not Disturb’ sign on the door and crank up the TV when you step out to give the impression that you’re still inside.

Gross Stuff-

16.   In 2007, Fox News reported that a hidden camera investigation of several hotels in Atlanta revealed that glasses often go unwashed, or are treated with potentially harmful substances.
17.   Bed bugs are on the rise. These pervasive insects are causing major problems in hotels. Just because a hotel is expensive, it doesn't mean it's bed bug free. Bed bugs are difficult to spot, and they spread quickly.

18.   E. Coli has been found on 81% on surfaces in hotels- like the telephone, bedside lamp, and the dirtiest of all things in the hotel room… the TV remote control.

19.   There have been eight dead bodies found under beds in hotels in the U.S. over the last 30 years.

20.   We’ve all seen the cult horror classic ‘Psycho’, right? Well, peepholes are as commonplace as they’ve ever been, and there are plenty of modern-day Norman Bates’ out there. Check for tampered peepholes on your door, as they can be reversed to look in, instead of out.

Coolest Hotels-

21.  TreeHouse Point- Located only 30 minutes outside of Seattle, this awesome hotel offers many different options for your vacation. Each option allows visitors a tranquil private home to enjoy the ambience of being in the treetops.

22.   The Saguaro- This 1950’s Technicolor time capsule in the middle of the desert city of Palm Springs, California, is a great place to spend your vacation. Its simplicity and charm offer a certain joie de vivre experience.

23.   Ultima Thule- This luxury lodge in Wrangell–St. Elias National Park and Preserve, Alaska, is 100 miles from the nearest road, and is only accessible by private plane. Here you can sit in the middle of the largest swath of protected land on the planet. After a hard day of fun outdoor activities, your hosts cook up a meal of epic proportions that you can chow down on, before retiring to your quarters.

24.   Beckham Creek Cave Lodge- This is a hotel in a cave, in Arkansas. Need I say more?

25.   Jules’ Undersea Lodge- Situated 30 feet below the surface of the water at Key Largo Undersea Park in Florida, this cool place is America’s one and only undersea hotel. You can spend the night sleeping with Florida’s marine life.

12 Ways President Trump may affect the real estate and housing markets.

When Donald Trump was officially declared the winner of the 2016 presidential race and our next POTUS, the Electoral College had selected one of the most iconic, controversial and shocking leaders in American history. Whether you voted for him or now, it’s now time to take stock of the policies decisions he may be making once he is sworn in as the 45th U.S. president. In particular, many of us are wondering what impact President Trump will have on the real estate, mortgage and housing market.

As Trump has never served in public office before, many of his policy decisions and stances remain a mystery. However, he did make a considerable fortune as a real estate mogul and is on record about our housing market far more than any other issue. We polled credible sources, economists and experts from the field and assembled this consensus of analysis – although it’s important to mention that some of it is still speculative, like any discussion about the economy.

Here are 12 ways President Trump may affect the real estate, mortgage and housing markets:

1. Trump’s proposed tax cuts will allow more people to spend more on housing
A big part of Trump’s campaign platform was his promise to cut taxes. In fact, the New York City real estate billionaire has pledged to reduce the number of tax brackets from seven to three, saving the average American consumer far more with significantly lower rates of 10%, 20% and 25%. Ostensibly, that would free up income that would help more people qualify for mortgages, take out bigger home loans, and invest more into their real estate spending in general. Experts predict it would also give a big boost to the cooling luxury home market.

However, in the short time since he was elected president, Trump’s plan is being called too expensive by financial analysts, who estimate the cost in lost tax revenues between $6 and 7 trillion. A watered-down version of Trump’s tax plan is being bandied about the House of Representatives that would bump those enticingly low tax rates to 12%, 25% and 33%, respectively. Will this pass? And how soon? One thing is for sure is that we’re all interested in paying less taxes if that’s economically feasible.

2. The property tax advantages of homeownership could be endangered 
But before homeowners get too excited about saving more money on their income taxes, President Trump may well be cutting the profound tax advantages of owning a home. It’s expected that the mortgage interest tax deduction for homeowners could be in danger of being eliminated or at least significantly rolled back. Likewise, look for less allowable exemptions on capital gains from the sale of a home. Even commercial real estate investors that have enjoyed the like-kind exchange tax deferral known as a 1031 exchange could go away.

Will eliminating the mortgage interest deduction take away one of the major incentives to home ownership?

3. Fannie and Freddie a thing of the past?
Trump is on record during his presidential campaign as wanting to eliminate Fannie Mae and Freddie Mac, referring to them as “corrupt” and stating that they allow “shareholders and executives to reap huge profits while the taxpayers cover all losses.”

However, while his disapproval with the governmental agencies that secure mortgages was clear, he didn’t disclose to what extent they’ll be dismantled, when, or what he has planned to replace them.

But since the election, he’s said that he would “reach a bargain” on Fannie and Freddie, rhetoric the stock market saw as a positive sign that they would survive Trump’s chopping block, pushing common shares in the two mortgage giants by up to 70% since the election.

Reform would be welcome by many interests on both sides of the aisle. Fannie and Freddie made some highly questionable decisions about buying subprime mortgages and creating an “internal hedge fund” that led to their near-collapse during the mortgage bust almost a decade ago, saved only by a $188 billion US Treasury bailout. But since then, they’ve fully recovered paid back taxpayer investments and have been hugely profitable.

If Trump does knock out Fannie and Freddie, expect the cost of the typical mortgage to jump amid a void in government guarantees.

4. Homeowners in flood zones or natural disasters may be left treading water
Government under President Trump will most likely offer less direct relief to homeowners in flood zones or those who suffer natural disasters. That’s because the federal program that assists homes damaged by earthquakes, wildfires, hurricanes and flooding is operating in a $24 billion deficit. It’s hard to envision Trump writing more blank cheques for that agency, and analysts expect that the burden for funding natural disaster damage will fall squarely on the homeowners. Under a smaller and less regulating government, homeowners may see their bills for flood and property insurance go up, but also there have been calls for insurers to accurately assess risk so the agency will be indemnified, including redrawing the antiquated federal flood maps.

5. Will the Federal Housing Administration survive Trump?
In part of his push to reduce government, strip regulations and get to a leaner, more cost effective version of government, Trump has also pledged to eliminate the Department of Housing and Urban Development, the overseers of the popular FHA home loan program that allows many first-time buyers and consumers with low down payments or below average credit scores to achieve home ownership.

Even if the FHA is just reformed, not cancelled, Republicans will look to stop the FHA from providing taxpayer-guaranteed mortgages to wealthy homebuyers, and FHA insurance premiums are expected to be brought in line. To read a great (but extremely technical) article about what might happen to the FHA under President Trump, visit National Mortgage News here.

6. Repeal the Dodd-Frank Act
The Dodd-Frank Wall Street Reform Act was passed in 2010 to address the issues that led to the 2008-2009 financial crisis. But Trump is a vocal proponent of repealing the act, citing the burden of far too many regulations within its 2,300 pages of law. That’s not a surprise, considering that the law was originally written primarily by Democrats, and hence named after Senator Chris Dodd and Representative Barney Frank at the time. The Trump team calls the act a failure because under the law, "big banks got bigger while community financial institutions have disappeared at a rate of one per day, and taxpayers remain on the hook for bailing out financial firms deemed 'too big to fail.'

But far more likely than all-out elimination is sweeping reform, reworking the fundamental structure of the Dodd-Frank Act and stripping back some of the thick and complex regulations.

Look for part two of this blog with the remaining six more ways President Trump may affect real estate and housing!

Friday, November 11, 2016

15 Ways we can get your purchase offer approved - even if it's not the highest price.

When I write purchase offers for my clients, I encourage them to come in with highly competitive, fair pricing that is a win-win for everyone if accepted. But I also share with them these 15 strategies that will help get their purchase offers accepted, even if they aren’t offering the highest price:

1. Reply to counteroffers ASAP.
Time is of the essence for most sellers so it’s important to strike while the iron is hot if you want your offer accepted.  Submit a great offer as soon as possible when you know you want the home, and we’ll respond to any counteroffers the same day if possible. That momentum will keep the deal alive and give you the best chance of getting into escrow.

2. Get preapproved for a conventional loan.
Go for a conventional loan first. While government-backed loans like FHA, VA, and down-payment assistance programs are still useful, they may be seen as a liability from the seller’s perspective. Extra conditions, regulations and procedures can slow down your loan, delay the closing – or possibly kill the deal altogether.

3. Keep your contingency periods short.
Most real estate purchase contracts have a standard 17-day contingency removal period, during which the buyer can conduct his or her inspection, review disclosures and reports, get an appraisal, and request repairs. To sweeten the pot for a seller and show them that you are ultra-efficient and motivated, we can offer a shorter contingency period. You can still perform the same due diligence; just turn it around faster.

4. Increase your down payment.
By putting down 20% or more down payment, your offer will be much more attractive to the seller. As a general rule, the bigger the down payment, the more invested and stable a homebuyer appears.            

5. Bump your earnest money deposit.
Alternatively, a great way to get your offer noticed is to increase your earnest money deposit well above the standard. Remember that if you find an issue when you do the home inspection and appraisal, you don’t have to move forward with the purchase. You’ll still be able to do that before you remove contingencies – and get your deposit back.

6. Leave a ‘Thank You’ note.
It’s a tiny touch, but so important. Think about it: a homeowner probably feels pride and strong emotions about the home, and by leaving a quick Thank You note when you view a property you really love, you’ll validated those feelings. Thank You notes are a great way to show the seller that their home will go to a great new owner.

7. Discover the seller’s priorities.
I can communicate through the seller’s agent to find out the most important factor in the sale, above and beyond price. Maybe they need a quick close so they can move out of town or want to get it sold before holidays? Perhaps, they’ve had deals fall through in the past or ask for too many repairs and just want to know that you’re truly interested? If we know their “hot button” it can go a long way to getting your offer accepted.

8. Offer a quick close.
Waiting around until the deal closes and their check clears is uncomfortable, so offer to close early. As long as we are organized with your loan and paperwork and no unexpected issues occur, most home purchases can be closed in 30 days or less.

9.  Make an all-cash offer.
Cash talks. Nothing gets a seller’s attention like an offer to buy their home without a mortgage loan involved. If that’s possible, it sure can streamline the process.

10. Submit a non-contingent offer.
If a seller sees that your offer is contingent on selling your home first, your chances of acceptance are greatly reduced. Talk to me about selling your home first, and then move on as a strong, perfectly positioned buyer. 

11. Write a personal letter to the seller.
A real estate transaction is paperwork heavy, with legalese and big numbers flying around. But you can humanize your offer and appeal to the seller’s emotions by writing a polite personal letter explaining who you are, why you love their house, and revealing some details about your family.

12. Submit a strong lender letter.
Other than the purchase, price, one of the first things a good Realtor will review with their sellers once an offer comes in is the terms of financing. By getting you preapproved ahead of time, you will be able to submit a rock-solid lender letter illustrating what a great loan candidate you are.

13. Get all the required paperwork in order from the get-go.
Showing bank statements, credit report and proof of funds is always welcomed by a seller (and their Realtor), displaying your strong financial position. Sharing these financial documents (of course with the sensitive data blacked out) will reinforce your offer.

14. Consider Adding an Escalation Clause.
This rarely used tactic shows sellers that you are very serious, and gives them incentive to consider you first no matter what kinds of bidding war ensues. I can write a clause into your offer that states you will “escalate” your offer above all others to a certain point, for example, increasing your offer by $500 over any others up to $250,000, eliminating the need for counteroffers.

15. Write up a “clean” offer.

We won’t cloud your offer with a bunch of unnecessary concessions and requests. Getting money credited back towards closing costs, asking the sellers to pick up fees and costs that are typically associated with the buyer, asking for appliances to be left and excessive repairs to be made can slow the deal. Keep it clean and simple for the sellers – giving them a compelling reason to choose you.