Reno Home Blog

Not a total loss...-Part 2 of 'Bleeding in the Reno Sparks Home Market' By: Joe Salcedo

My recent post "Bleeding in the Reno Sparks Home market" might cause me some enemies and people saying, "Your looking at the glass half empty!"

I beg to differ. I see multiple opportunities on the buying side of the Market, allow me to explain.  If you are a buyer now (first time,repeat,investor) I don't think I need to tell you about all the inventory that is out there and the number of sellers that are ready and willing to negotiate {more so the builders, Who are now paying commission to Outside Agents (they never use to) and giving unbelievable incentives just to close the deal.}.

Great Deals are out there to be made in this market. You just have to know what you are trying to accomplish and what is your top priority. You must negotiate.  Below is an article about this one specific necessity to get that best deal for you in this market.

But before reading that,I just wanted to expound on the point that, "You have to know what you are trying to accomplish,your top priority".  If you're thinking on buying a home (because it's so much cheaper compared to the precious years) and then 'flipping' it within the next few years. I don't think that is a good idea.

The market based on statistics, is still in a downward trend. I stated this on my last post, 'bleeding', But if you're thinking of staying in the house for the long run( at least 10 years) then that's a different story.

The opportunity that I'm talking about lies in the incentives of the builders and resales is giving you.  They are definitely in the mood for negotiations.  But 'Joe it'll only get worse and cheaper" yeah could be, but not necessarily.

The home builders in the Reno Sparks area are severely cutting down their inventory. They're not building half as much as they did a few years ago. I have Statistics to back this up.

Daily Real Estate News  |  August 21, 2007

Negotiators Miss Out By Accepting Deals too Fast
Most people — even those who think they have great negotiating skills — accept the deal too quickly, according to a study on how far both buyers and sellers are willing to go in a negotiation.

''Even experienced negotiators are not immune,'' says study co-author George Wu, a professor at the University of Chicago's Graduate School of Business. ''People almost always underestimate'' how far they can get the other side to go.

Rick Larrick, associate professor of management at Duke University's Fuqua School of Business and another co-author of the study, offers this advice for those who want to be a better real estate negotiator:

• Weigh your alternatives. ''The only time you should be concerned about the other side walking away is when you don't have good alternatives,'' Larrick says. "If you're buying a house, you should know if there is another one out there that you would be happy to buy if you couldn't get this one at a certain price. If there is, you can make the other side sweat.''

• Know the value. Whether you’re the buyer or the seller of a home, know the value of the property. "Look at everything in that range and know what else buyers interested in your home might be seeing,'' advises Fran Vernon, an associate with Dilback REALTORS® in La Canada, Calif.

• Have patience. A buyer or a seller who is not in a hurry can rise above other buyers or sellers in the same price range.

• Learn from your deals. Just because you walked away feeling like a winner doesn’t mean you were, Larrick says. Pay attention to subsequent similar sales, so the next time you can do better.

Source: Tribune Media Services, Kathy Kristof (08/19/07)

Bleeding in the Reno Sparks Homes Market

Two Nights ago my three year old boy woke me up crying about his nose bleeding.  Being the super dad that I am, I calmly told him, "Don't worry the bleeding will stop."
It took about five minutes before it totally stopped and sure enough I was the hero in my boy's eyes after which he said, "You're smart dad, you know everything".

Basing it on my past experiences with nose bleeds, I knew for sure that it will stop. I just could not make it stop right there and then when my son demanded it.

It's pretty much the same with the Reno and Sparks home Market . We know the real estate bleeding will stop, we just don't know when.

Many times I wish I can see the future.  I, being the Super Dad or in this case the 'Super Realtor' would be the hero to assure everyone, "Don't worry the bleeding will stop in____ of this year___...." How i wish... but no, I am just a mere mortal like everyone else.

But here's the thing, the market will give us clues on where it is heading. One of the ways is looking for the existing home sales. Is it starting to go up, are more homes being sold at a shorter period? the average price of homes, is it starting to appreciate? how much compared to the previous year?  We don't have to fly blind. There are ways the we can significantly reduce the risk when buying a home in the Reno Sparks area.

The goal of this blog is to help you do just that.

Please read the article below that I got through my email from Real Estate News Daily which gives one reason on what's happening in our market, and why it will continue.

Daily Real Estate News  |  August 22, 2007

Mortgage Crisis: What Went Wrong?
Nearly 2 million mortgages are scheduled for rate increases this fall, which is expected to send foreclosures soaring.

President Bush has blamed the failure of borrowers to read the fine print. But many experts say the problem runs much deeper. The mortgage business has long been a tug of war between a social commitment to broad homeownership and the efforts of private financial operators to earn money.

Robert Kuttner, co-editor of The American Prospect and a senior fellow at Demos, a New York-based think tank, says the government should resume directly subsidizing starter mortgages and construction of homes for moderate-income buyers. He says these programs need to combine careful credit assessment with counseling, rather than relying totally on the private mortgage industry. He says he also would prevent irresponsible, speculative lenders from selling mortgages in the secondary market.

“We've now had an experiment in the claims made for mortgage deregulation, extending over three decades, and deregulation flunked," Kuttner says. "America needs to restore a system in which government supports homeownership — and makes sure that mortgage lenders serve as responsible creditors, not predators.”

Source: The Associated Press, Nathan K. Martin (08/19/07)

Reno-Sparks Market back to the future:2005

What was the Reno-Sparks market Doing in 2005?
How much were houses then?
How many homes were selling?

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Raw data Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Reno-Sparks Market back to the future: 2004

What was the Reno-Sparks market Doing in 2004?
How much were houses then?
How many homes were selling?

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Raw data Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Reno-Sparks Market back to the future: Year 2003

What was the Reno-Sparks market Doing in 2003?
How much were houses then?
How many homes were selling?

 

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Raw data Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Reno-Sparks Market back to the future: Year 2002

What was the Reno-Sparks market Doing in 2002?
How much were houses then?
How many homes were selling?

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Raw data Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Reno-Sparks Market back to the future: Year 2001

What was the Reno-Sparks market Doing in 2001?
How much were houses then?
How many homes were selling?

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Reno-Sparks Market back to the future: Year 2000

What was the Reno-Sparks market Doing in 2000?
How much were houses then?
How many homes were selling?

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Reno-Sparks Market back to the future: Year 1999

What was the Reno-Sparks market Doing in 1999?
How much were houses then?
How many homes were selling?

Notes:

Data includes all single family stick built homes,condos,and manufactured home sales in the MLS database.  It does not include sales made " By owner" or most new home sales,which do not participate in the MLS system.

Provided by:

Nevada Small Business Development Center,
University of Nevada, Reno

Introduction to the "Reno-Sparks Back to the future" 8-part series

I just had to name this series " Reno-Sparks Market back to the future"
First, i love that movie.  Second, when it comes to investing I deeply believe that in order for us to make the most educated guess, (which is what investing is all about) we can never forsake the lessons of the past.

In my opinion, the past 8 years have been the top 2 craziest times for Real Estate in our country.(the other one is the Great Depression). I often hear people talking about the future of Real Estate as if it will just repeat what it did in the past 5 years-"It won't happen buddy" is what i silently tell myself.

I created this 8-part series  posting  to  answer questions like,"How much has the Reno-Sparks Real Estate appreciated  in the past,say, 5 years? or When did the Reno-Sparks market start to really go up in value?(more than the average of 7% every year)
When did we reach the absolute top? or  how much were the houses back in 1999? How many homes were selling in 2005? how much was the median price of homes in 2005? (the year that the market reached its absolute top) 

I hope to answer these questions by the posts. 

I will post a blog every business day (Mon-Fri ) from Aug 21- Aug 31. In each posting you will see 2 graphs- Home resales in that year & Median prices of homes in that same year.

Joe and I believe that after studying this, you are well on your way to truly understanding the Reno-Sparks Real Estate Market. Feel free to post your questions,comments even violent reactions.

For this always makes our learning even more exciting.