Reno Sparks Real Estate Today

Reno Sparks Real Estate Market Update

The Reno real estate market and Sparks real estate market continue their winning ways.  As always it depends on what’s considered “winning?”  The rising median price and lower inventory trend continues. The fisrt chart is most tells the stroy.  At the end of February there was only a 3.9 month supply of homes on the market. Inventory below 6 months is considered a sellers market, inventory below 4 months is a STRONG sellers market.   I expect inventory levles to improve (increase) over the next 3-6 months as banks release some of thier inventory of properties.  Low interest rates, improving job numbers, improving economic conditions, increased investor activity,  and people migrating to the area are creating strong demand for housing. All of these conditions should continue for the foreseeable future.  

 

 

 

 

 

 

 

 

 

 

 

Interest Rates.... Heading Up Or Down?

Sparks D'Andrea Golf Course Sells For 1 Million

Prospective buyers gathered at the Washoe County Courthouse Tuesday for a chance to own the foreclosed D'Andrea Golf Course in Sparks.

The 11am public auction took place on the steps of the courthouse, located at the corner of Virginia and Court Streets in downtown Reno.

It took less than two hours for the course to sell for $1 million to In Symphony Private Capital, LLC.

Court documents say the 18-hole public course is $4.8 million behind in payments, along with interest, late charges, advances, interest on advances, foreclosure fees and costs.

D'Andrea originally shut down in March of 2012 after a majority of homeowners voted down a fee increase

to help keep the course open.

The golf club lost money in seven of the last eight years, and needed an extra boost from residents just to stay afloat.

Some Year End Stats - The Recovery Continues

 

 

 

 

 

Reno Sparks Real Estate Market - Quick Update

October 2012 Numbers

Reno recorded a modest growth in homes sales with 338 homes sold, which was 2 percent more than last year and 9 percent more than September.

The median sales price jumped 23 percent from 2011 to $185,000. It was a 1 percent decrease from September.

In Sparks, which includes Spanish Springs, 170 transactions were completed. The median sales price was $174,950, which is 19 percent more than the same period a year ago and 9 percent more than September.

Condos and townhomes in the area followed the trend of better median sales prices. Washoe County showed a 58 percent boost from October 2011 to $71,000 in October 2012.

Reno had the highest median sales price of $85,000, a 53 percent increase. Meanwhile, Sparks was $64,000, up 39 percent from last year.

Improving Real Estate Market - More Visual Evidence

Cost Of Home Ownership Continues To Fall

Reno Sparks Real Estate Market - Visuals

I received a lot of feedback on the article I wrote back on September 13 regarding the real estate market.

To support my points I thought it would include a few charts for you to review. 

As you can see from the chart below the median home price in the Reno Sparks area peaked in the fall of 05. That was followed by a long drawnout pullback for about three years until the fall of 08.  From the fall of 08 to early 2012,  the market was stuck bouncing along what appears to be the  bottom in terms of prices.

As you can see, starting in early to mid 2012 we're seeing a break out. As stated in my previous article I expected this breakout/price rebound to continue for at least the next 12 to 24 months.

Below is an inventory chart from 05 to present. The numbers on the right side are months of inventory on the market. Monthly inventory levels of between six and eight months is considered a "stable market." Monthly inventory levels of six months and below are considered a "sellers market" and monthly inventory levels above eight or nine months are considered a "buyers market."  

As you can see below, inventory levels have dropped into the "sellers market" territory for the last 5 to 6 months. Right now our inventory levels are roughly a 4 1/2 months supply.

 

 

 

 

The Best Time In History To Buy A Home

I am not one of these real estate agents/companies that’s constantly telling you to buy a home regardless of market conditions. As a matter fact, I have been very critical of the real estate industry as a whole for their buy buy buy message. Up until the last 6-12 months, it’s been tough to recommend purchasing a home. 

Not anymore.   I am here to say, this is one of the best times in AMERICAN history to buy and own a home.

Here’s why…..

1.	Housing prices have dropped more than they ever have in our lifetimes – by far. Today, houses are selling for well below replacement cost.
2.	Meanwhile… housing prices are up for six-straight months. The bottom is here.
3.	Mortgage rates are at record-lows – around 3.5% today. With low home prices and low interest rates, houses are more affordable than ever.

But the story gets better…

You have a huge "tailwind" for rising prices, courtesy of the government.

First, Fed Reserve Chairman Ben Bernanke will not raise rates for years, 2015 or later.

You see, he will only raise interest rates when inflation gets too high or when the economy is booming (specifically, when the unemployment rate falls too far). We are not in danger of either of those things happening right now – and we won't be in danger for a couple years.

So interest rates will stay low for longer than anyone can imagine… And these record-low interest rates should be like lighter fluid on a fire. It's taken a while to get started… But with higher home prices over the last five months, the fire is now lit.

Second, I can't think of an asset that has more government incentives than the home you live in.  

Let me show you what I mean…  

You can deduct the interest on your mortgage off your taxes. You get to keep up to $500,000 in capital gains on your home without having to pay any capital gains taxes. And on roughly 90% of home loans, the government has literally made those loans possible (through government-sponsored entities like Fannie Mae and Freddie Mac).  

In short, the government wants you to own a home… This is simply adding more fuel to the fire.

And for most regular people, your home is a much better use of your savings than stashing your money in stocks…

Buy what you understand. When you own a home, you know what you've got – the earth under your feet isn't going out of business. But you could easily buy shares of a company that goes out of business. So today, I suggest putting your savings into your primary residence.

In sum, I believe that starting today, single-family home prices will soar higher than anyone can imagine in the next couple years.

The gains in housing prices will surprise everyone – and you certainly haven't missed it yet. This trend is just beginning. And it will last for years to come.

Government & Housing - It's Insane!

The definition of insanity is doing the same thing over and over again but to expect a different result. With that in mind, our economic policymakers are clearly off their rocker. 

They reduce interest rates. It does nothing. So they cut again and again. They indebt future generations to 'stimulate' the economy. It does nothing. So they stimulate again, and again.

Nothing that central bankers or politicians have done since the financial crisis began in 2008, has fundamentally changed economic conditions. Yet they keep applying the same remedies, drawn from the same old economic playbook.

The false idea which guides their decisions is that we can all grow wealthy by borrowing and consuming, instead of by producing and saving. People have been sold this lie for more than a generation. It is embedded in social DNA.

In our current economic system, you are rewarded for going into debt with all sorts of tax deductions. Save money, on the other hand, and you are punished through taxation and inflation.

The incentives are bass ackwords; it's no wonder Americans have over-borrowed and overspent given that the system is so blatantly slanted to reward this behavior.

Housing is one of the most interesting examples of distorted incentives: tax policy in the US encourages people to take out huge mortgages, and governments end up with a moral imperative to ensure home prices continue rising.

Am I the only one that finds this crazy? You'd think people would want housing costs to stay low and affordable, not rise. I don’t hear anyone getting excited about the price of healthcare going up? I don't have a parade when the price of food goes up in the grocery store. Gas prices rise and all hell breaks loose. 

Why should housing be any different?

For the vast majority of people in the US a house isn't wealth, it's an expense. And wishing for this expense to increase is crazy and destructive. Yet the bureaucrats keep trying to figure out ways to 'prop up the housing market' and distort prices, often through policy that is very unfriendly to homeowners.

The Federal Reserve keeps ratcheting down long-term interest rates and scooping up mortgage bonds in an attempt to re-inflate home prices.

If our government and policy makers can’t admit we have a problem, we are long long way from fixing it.