Reno Sparks Real Estate Today

Mortgages are Going Green

A sign of the times is the increased awareness of the World's finite resources and a focus on how to be good stewards of these resources by "going green."  So it may be no surprise to find out that the Federal Housing Administration (FHA) has rolled out a new loan program called FHA Energy Efficient Mortgages (FHA EEM). 

The FHA EEM loan program helps current or potential homeowners significantly lower their monthly utility bills by enabling them to incorporate the cost of adding energy efficient improvements into their new home or existing housing. This FHA program eliminates the need for homeowners who are interested in making their home more energy efficient to take out an additional mortgage loan to cover the cost of the improvements they intend to make to their property. The program is available as part of a FHA insured home purchase or by refinancing your current mortgage loan.

It is our government's goal to make energy efficiency and conservation a way of life. The FHA EEM program contributes to these efforts by providing better housing and creating a way for homeowners to make valuable improvements to their homes at a relatively low cost. The Joint Center for Housing Studies has reported that by considering the amount of monthly savings on utility bills when determining the amount of the mortgage, over 250 thousand more homeowners could feasibly qualify for a home loan.

Jeremy Packer, an Architect at Cathexes in Reno, says that 100% of their current projects incorporate green building practices into their plans.  These sustainable practices may be as small as energy efficient windows and insulation or as large as entire walkable community developments, which are currently in the works for the Truckee Meadows area.  Jeremy thinks that these new mortgages will allow a greater percentage of homeowners the ability to include these energy efficient upgrades into their homes.

The FHA EEM mortgage will enable people to more easily incorporate sound building practices into their purchase or refinance without the hindrance of coming into closing with all of the expenses associated with a remodel.  A client, Nancy in Wingfield Springs, added solar panels to her home that cost $8,000.  Had Nancy paid for this expense out of pocket it would have taken her over two years to recover her initial investment based on her energy saving of $300 a month.  Since Nancy was able to finance this expense into her current loan which she pays less than $50 a month for this improvement (which a portion of is tax deductible), she still retains her $8,000 in her savings account and still benefits from the $300 savings on her monthly power bill.  She also has a direct savings from Sierra Pacific Power Company for "renewable energy certificates" of approximately $1,500 a year that are fully transferable with her home should she ever decide to sell.  In this example Nancy's monthly benefit exceeds a $389 savings all because she has chosen to Go Green!     

Jason Norris, MBA, CMPS, President MFG Mortgage Services, LLC 1.775.322.0496

   
 

Don't forget your Drive Score

A reader made me aware of a drive score site. Same idea as the walk score but gives the address/property a score based on drive distance. The Reno Sparks area is more car centric, at least for now, so this may be more useful tool. Thanks for the heads up Nikki

Below is a sample. Or visit www.drivescore.fizber.com

Widget provided by For Sale By Owner website Fizber.com

What is your Walk Score?

With gas prices on the rise some house hunters are looking to move closer to work and other services. Homeowners are breaking out the walkin shoes, bikes, and mopeds to get where they need to go. I found a website that will give you what they call a walk score. A walk score is given based on the walking distance to shopping, restaurants, and other services. The higher the score the closer you are. Let’s face it, gas prices aren’t coming down anytime soon so being closer to service becomes very valuable. Besides the gas savings, walking/biking is healthier and better for the environment. Get your score at www.walkscore.com. Below is a sample from the web site.

102% Financing- Rural Housing Opportunities

An outstanding loan opportunity for individuals in the greater Reno/Sparks area is the Rural Development (RD) or Guaranteed Rural Housing (GRH) loan.  This loan is qualified for people that meet moderate income limits and have property located in previously "designated" rural areas(http://eligibility.sc.egov.usda.gov).  The program is designed for people looking to purchase or individuals with qualified properties that are looking for a rate deduction on their current primary residence of at least .5% off their current mortgage rate. 

For individuals looking to purchase there is no maximum for seller concessions.  This is an amazing opportunity given our current market and the ability to negotiate with motivated sellers.  These concessions may be used to buy-down the interest rate or towards buyers closing costs.

Qualified "rural" properties are located throughout the Truckee Meadows; prime examples may be found in the following areas:  Spanish Springs, Palomino Valley, Red Rock, Fernley, Dayton, Cold Springs, Lemmon Valley, Golden Valley, Stead and Washoe Valley to name a few. 

If you have questions in regards to qualifications for this loan please post a response or call directly.

Jason Norris, MBA, CMPS, President MFG Mortgage Services, LLC 1.775.322.0496

Reno Sparks Sales Numbers ...Have we touched bottom?

Below are charts with sales numbers broken down by price range for the Reno/Sparks area. I compared January-May 2007 with January-May 2008. In the coming weeks I will be breaking down different areas but I thought I would start with a general overview.  I am also going to go back and look at “pre-boom” numbers to find out how these numbers compare to a “normal” market.

As one would expect, prices are holding for homes under $200,000 and sales are strong – up 18%.The hardest hit price ranges for sales are those in the $300,000 plus range.   Prices have stabilized but the number of sales is still way down (over 48% on the average).

I believe this market is trying to find the bottom but we won’t know for sure for at least a couple more months.

Homes Sold Under $200,000 (current Active = 978: ¯22%)

SOLDS	January – May	Market Time	Average Sales Price
2007	265	119	$155,483
2008	314	120	$152,138
% change­¯	18% ­	1 more day	2% ¯

Solds Between $200,001  and $300,000 (current Active = 1542: ¯ 49%)

SOLDS	January – May	Market Time	Average Sales Price
2007	835	130	$257,758
2008	606	132	$249,519
% change­¯	27% ¯	2 more days	3% ¯

Solds Between $300,001  and $400,000 (current Active = 783: ¯ 66%)

SOLDS	January – May	Market Time	Average Sales Price
2007	460	129	$343,015
2008	264	165	$343,530
% change­¯	43% ¯	36 more days	0% ¯­

Solds Over $400,001  and $500,000 (current Active= 323: ¯ 73%)

SOLDS	January - May	Market Time	Average Selling Price
2007	175	124 days	$443,660
2008	75	177 days	$446,755
% change­¯	57% ¯	53 more days	1% ­

Solds Over $500,001  and over (current Active = 611: ¯ 68%)

SOLDS	January - May	Market Time	Average Selling Price
2007	231	168 days	$847,952
2008	130	190 days	$881,070
% change­¯	44% ¯	22 more days	4% ­

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Data was collected from the Northern Nevada MLS.  Parameters: Residential properties (Condos, Townhomes, Single Family Homes.  All areas except areas 138,176,177 and InclineVillage. Comparison periods are January 1 to May 31 for 2007 and 2008. Disclaimer required by MLS: While data is deemed reliable, no warranty for accuracy is implied.  Data may not include all sales activity. Sales were made by all participants of MLS.

Fed Rate Cuts Don't Mean Lower Mortgage Rates

Last week a client from Palomino Valley informed me that he had recently watched the news and heard that, Ben Bernanke, the Chairman of the Federal Reserve planned on keeping an accommodative stance in regards to interest rates.  Mr. Bernanke's stance was that the Fed would neither lower nor raise interest rates.  My client was extremely pleased with this knowledge until he called and found out that since the June 3rd announcement mortgage rates had increased from 5.75% to 6.625% while mortgage backed securities lost 154bp (mortgage rates are inversely related to the price of mortgage bonds/mortgage backed securities).  So the question should be asked, is a Fed rate cut really good news for mortgage rates?

The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates.  A mortgage rate can be in effect for 30-years while a rate set by the Fed can change from one day to another.

It is often said history repeats itself. And if history is any teacher, we can learn from what happened to mortgage rates the last time the Federal Reserve was in a rate-cutting cycle.

The last time the Fed was in a lengthy rate cutting cycle was back in 2001 from January 3, 2001 to December 11, 2001. In the span of 11 months, they cut the Fed Funds rate 11 times with eight of those cuts by 50bp. This resulted in a total of 475bp or 4.75% in short-term interest rate cuts taking the Fed Funds Rate from 6.00% down to 1.75%. Now most uninformed people would naturally think because the Fed cut rates by so much during this time that mortgage rates would follow suit and trend lower as well. Not so.  Mortgage rates actually moved higher during this time of significant rate cuts because inflation, the arch enemy of bonds, gradually rose similar to what we are experiencing today.

Now let’s take a look at what happened with the Fed’s most recent cutting cycle, the first since 2001. On September 18, 2007 the Fed cut the Fed Funds Rate by 50bp. The mortgage bond market briefly enjoyed a “knee-jerk” reaction to the Fed move by closing higher that day, but lost 140bp over the following two sessions. Then on October 31, 2007 the Fed lowered the Fed Funds rate by 25bp. The mortgage bond market responded by losing 78bp over the following five trading days. On December 11, 2007 the Fed once again lowered rates by 25bp and the mortgage bond market lost 88bp in the next three days. So far this year, the Fed delivered a surprise 75bp rate cut on January 22, 2008 and mortgage bonds lost a whopping 144bp in just 2 days. Eight days later and as widely expected, the Fed cut rates by 50bp. Within 13 days from that 50bp cut, mortgage bonds lost 269bp. On March 18, 2008 the Fed cut by 75bp and mortgage bonds lost 113bp in 6 days and 214bp in 22 days.

I really hope that this information helps dispel some myths and misconceptions.  The lesson in this data is that it is important to seek the opinion of an industry professional in your local market.  My Reno client would have benefited greatly from this advice by saving over $300 a month on his mortgage payment.

Jason Norris, MBA, CMPS, President MFG Mortgage Services, LLC 1.775.322.0496

Flying J Truck Stop to present at the Planning Commision

Many in our community may not be aware that one of the largest truck stop companies in the world, Flying J is working on moving to Reno.  They are seeking approval to build a truck stop at the Robb Drive interchange in NW Reno.  They will be taking the first step in the approval process tonight, Jun 18th, at the Planning Commission meeting at 6pm at the City Council chambers.  There are many different points of view on the pros and cons of this site being utilized for a truck stop but making the gateway into our city a truck stop just doesn't sit well with many in Reno.  Citizens and property owners in the area don't feel that this area is the right spot for a truck stop.  This interchange was not designed to handle the amount of traffic a truck stop would bring, let alone the noise and air pollution.  We all have very busy schedules but this is your chance to come and speak your mind concerning a truck stop moving into town.  The more voices at this meeting the better the chance we will be heard.  As the song says, "They paved paradise and put up a parking lot".   

The Three "R"s: Reduce, Reuse, Recycle

Did you know that the United States only makes up 5% of the worlds population but uses 25% of all natural resources.  80% of what Americans throw away is recyclable, yet our recycling rate is just 28%.  Protecting the environment is on everyones mind and is now becoming a key factor in all areas of real estate.  It is inspiring home buyers, architects and builders to re-purpose or reuse older structures and materials.  Everything from reusing doors and lights fixtures to recycled products such as mantels, salvaged wood, tiles and flooring products.  Outside the house, xeriscaping is taking over as the preferred landscaping technique preserving our local water resources.  Utilizing native plants and water wise landscape designs that optimize local conditions held reduce the need for watering, prevent soil erosion and will lower your maintenance costs.

Here are some simple tips to implement the three R's in your household:

• Buy only what you need and use what you buy.  Our landfills are full of items that still have a useful life.  If you can use it pass it along to someone who can.
• Make wise "package" choices.  Product packaging accounts for 33% of our trash.  Select products that are not wasteful in their packaging.
• "Pre-Cycle" by selecting only products that are packaged using readily recyclable materials.
• Start a garden, food that is grown in your own back yard doesn't have to be processed, packaged and shipped.
• Start a compost pile to go along with your garden.
• E-Cycle.  Discarded electronic equipment is constantly being dumped into our landfills and the speed with which technology is becoming obsolete makes this a major issue.  E-cyclable items include:  televisions, computers, microwaves, telephones, cellular phones, stereos, VCR's and DVD's.

We can all make a difference by taking on the challenge of respecting the environment for the generations to come.  Visit earth911.org for more information on ways to reduce, reuse and recycle.

Kids Fish Free at Sparks Marina Tomorrow June 14th 7-11 am

Here is an event a reader made me aware of at the Sparks Marina tomorrow June 14^th. Sounds like a lot of fun.

Kids Free Fishing Day at the SparksMarina. The Sparks Rotary Club, the Nevada Department of Wildlife and the Sparks Parks and Recreation Department offer this community event for ages 7-17. Kids will fish along the south shore of the Marinafrom 7-11 a.m. Commemorative T-shirts and fishing poles will be distributed at the registration area until supplies run out. There will be games and face painting for all ages and a free barbecue lunch will begin at 9 a.m. with hot dogs, soda, ice cream and donuts for registered children.

Rotary members from Sparks and Reno and staff from the Nevada Department of Wildlife will be on hand to assist those with little or no fishing experience. Fishing equipment will be available for children to use if they don't have their own. Parents must accompany their children.

In addition to the Sparks Rotary Club, NDOW and the City of Sparks Parks and Recreation sponsors enable this free event to take place. Nevada Bighorn Unlimited and the Reno Rodeo Foundation are first-time sponsors this year providing cash donations. Mark Fore and Strike Sporting Goods and Model Dairy have been sponsors since the event began and are returning again to provide the stocked fish and ice cream, respectively.

The Sparks Marina Experience

I have a confession to make. I have lived in Sparks a better part of my life, I drive by the Sparks Marina almost daily, and I have never taken the time to walk around it and check it out. I’ve looked at the homes on the Marina and been to the restaurants and shops, but that is about it.

My wife and I have a new puppy that is full of energy and loves water. A friend of ours told us about the fenced in dog area and said their dogs love it. I thought what the heck we should check it out. Besides, the same walk around the neighborhood gets old after a while.

I must say I was impressed.

The entire Marina area was very well done, and clean. The dog park was great. Fully fenced and room to run. There were several people throwing balls in the water for their dogs to fetch. Dogs of all shapes and sizes were running around and having fun. Outside the dog park and on the paths, there were plenty of people around walking, jogging, and biking so we felt safe.

If you don’t know the history of the Sparks Marina, here is a quick overview. The Sparks Marina was once just a gravel pit, owned and operated by Helms Construction from 1968 to 1995. Helms Construction eventually gave the Gravel Pit site to the city of Sparks. The city needed to do some clean up of the area due to some contamination by some fuel storage tanks near by. In the mean time city officials were trying to decide what to do with the area. Along came the flood of 1997 and the “pit” filled with water and became a small lake. Mother Nature made the decision easy, and the Sparks Marina was born. The city of Sparks should be commended on the development.

If you haven’t had a chance to visit this not-so-hidden gem is Sparks, you should.