We had 55 homes sell in the Carson Valley in April 2010, on pace with the 61 homes sold in March. In contrast, only 38 homes sold in April 2009. We have been seeing this trend for months now and I think it’s safe to say that the volume of home sales is now holding steadily at a more reasonable level. I think the glut of low volume of home sales is behind us.

Here is a snapshot of our market indicators for April:

• 55 homes sold
  
• Median asking price is $244,000
• Median selling price is $215,000
• Median days on market is 118

So what is the absorption rate for the Carson Valley?

• There are 384 homes available for sale in the Carson Valley as of 5/7/2010
• 55 homes sold in April
  
• 384/55 = 6.98 months of inventory

Of the 384 homes on the market, 30 are bank owned, 58 are short sales, and 1 is Subject to Court Approval. That means that 23% of our market is distressed. Our market has also been holding steady at this distress level for several quarters as well. That means that although there is an appetite for buyers to purchase bank owned and distressed short sale homes, they continue to enter the market. Over the lat 10 days, our team alone has received over 10 new REO assignments (listings that are in their pre-marketing stages). For us, it looks like the new wave of REO’s everyone predicted at the beginning of the year is finally starting to hit the market. The question will be whether or not there is sufficient buyer demand to continue to buy them at the current rate. If not, they will put downward pressure on our pricing and the stability we’ve enjoyed over the last few quarters may begin to slide once again.

(Data provided courtesy of the Northern Nevada Regional Multiple Listing Service and excludes manufactured and shared ownership housing for Area 300, known as the Carson Valley which includes Gardnerville, Genoa, Minden, Indian Hills area of Carson City, China Springs, Spring Valley, Topaz Ranch Estates and outlying areas.)

First, here is a technical definition of a Northern Nevada REO: Northern Nevada REO properties, also known as Real Estate Owned properties, are a type of property owned by a lender after an unsuccessful sale attempt at foreclosure.

Why doesn’t every property sell at foreclosure (sell on the courthouse steps?)

The lender typically sets the opening bid at a foreclosure auction for at least the outstanding loan amount. If the outstanding loan amount is more than the Northern Nevada home is worth, then no bids are placed, and the auction sale is unsuccessful. This results in the ownership of the home reverting back to the bank involuntarily, where it becomes another asset in the banks REO (Real Estate Owned) portfolio.

How does a home become a Northern Nevada REO?

Usually, the path to REO begins with a homeowner in financial distress. The Northern Nevada homeowner may have had a loss of income, experienced a layoff, a divorce, a major medical issue where many bills have accumulated, or even a death of a spouse. In some cases, some homeowners who owe so much more than their home is worth because of the timing when they bought, even if they do not have a financial hardship, they stop making payments on the home. This is referred to as a strategic default.

Once the homeowner stops making their mortgage payments, the home goes into a pre-foreclosure status with the bank. This is the time that the homeowner can negotiate several ways to bring the loan back into good standing, and thus “cure the default”. The ways a Northern Nevada homeowner can cure their default are:

• Forbearance. If the loss of income is temporary, meaning the homeowner lost their job but found a new one, the bank may negotiate a forbearance. This means they will postpone the foreclosure action to give the borrower time to make up the missing payments. Depending on the lender, this can be done several ways. Sometimes the missed payments are tacked onto the end of the loan, sometimes they are spread over several months payments. The forbearance available depends on the specifics of the Northern Nevada homeowner’s situation and the lender options available.

• Loan Modification. If the loss of income is long term, the bank may negotiate a loan modification. A loan modification is where the borrower submits detailed financial information, including pay stubs, tax returns, a hardship letter, and other financial documentation, and the bank evaluates the Northern Nevada homeowner’s ability to pay. The government is now sponsoring the Making Home Affordable Program and the bank can receive incentives for completing a loan modification. The end result is the entire loan is recast, taking the principal owed, changing the interest rate, possibly changing the term of the loan, and completely reworking the loan so that the Northern Nevada homeowner has an opportunity to stay in their home with a payment they can afford that is acceptable to the bank.

• Short Sale. If the Northern Nevada homeowner is not eligible for a loan modification for any reason, the homeowner can attempt a short sale. A short sale is when the seller sells the house for less than the seller owes the bank(s), including the costs to sell the home. The entire Northern Nevada short sale process is lengthy, and in order to successfully complete a short sale, the seller must have a valid financial hardship.

• If none of these options are successful, a Notice of Sale is filed, and the home is attempted to be sold on the Northern Nevada courthouse steps at a foreclosure auction.

The home belongs to the bank. Now what?

Once a bank takes ownership of a Northern Nevada home, they retain a group of professionals to determine the home’s status. There is a series of events that occur, including an occupancy status, a rekeying of the locks to secure the home, a trash out if belongings were left behind, and a Cash for Keys negotiation if people are still living in the home to aid them in moving out. All these things occur with the intent to put the Northern Nevada bank-owned home (REO) on the market and sell it to remove it from the bank’s portfolio.

In Northern Nevada, most banks work with Asset Managers who employ established REO real estate agents to list and sell their properties. Many of these homes have deferred maintenance issues, and if your goal is to buy a Northern Nevada REO, inspections are strenuously encouraged. The bank may be unwilling to make repairs. It’s important to find this out up front because certain loan programs will not lend on a home with many repairs to be made.

The distinct advantage to buying a Northern Nevada REO relates to price. When banks have REO homes in their portfolios, they pay great attention to price. Often, REO homes are priced for a relatively quick sale, and they are priced lower than the other homes listed for sale in the surrounding area.

(Bank Owned Open House photo courtesy of Flickr.com – Nick Bastian)

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About The Author

Christianne Gordon, REALTOR®, CDPE, SFR is a Northern Nevada Real Estate Specialist that can assist you with the purchase or sale of real estate in Gardnerville, Minden, Genoa, Carson City, Dayton, and Reno/Sparks.

To search all available homes for sale in the Northern Nevada area, please visit GreatNevadaHomes.com or contact us for a FREE ListingBook account!

Only 16 homes closed escrow in the Dayton Valley in December 2009, compared to 27 sales in November, and 13 sales in December 2008.

The Dayton Valley Nevada real estate market ended the year with 308 sales for all of 2009, substantially higher than the 176 sales in all of 2008. Indicators show that our market has definitively moved through the low point in sales volume. Basic economic models tell us that when sales volume improves and supply diminishes, price appreciation typically follows. We’ll continue to watch 2010 trends closely to see if this indeed is the case in the Dayton Valley.

Here are the statistics for Dayton Nevada Homes Sold in December 2009:

• 16 homes sold
• Median asking price is $129,900
• Median selling price is $127,450
• Median days on market is 92

While volume may have been lower than in previous months, that’s not too particularly surprising. The real estate market often enters a ‘quiet period’ between Thanksgiving and Superbowl Sunday when people focusing their attention on the holidays and traveling to see family over winter break.

So what is the absorption rate for the Dayton Valley?

• There are 109 homes on the market as of 1/8/10
• 16 homes sold in October
• 109/16 = 6.8 months of inventory

The absorption rate fluctuated this cycle because of the decrease in the number of closed escrows during December. Look to the absorption rate to start trending back down in January and be back below 4 months in February if inventory levels remain constant. Dayton’s enduring affordability over neighboring Carson City, Reno, Sparks or the Carson Valley continues to be a big draw for homebuyers.

Of the 109 homes on the market, 27 are bank owned and 35 are short sales.The number of homes on the market continues to hold steady, however over 56% of the market is distressed. So, the message with Dayton is loud and clear: If you’re looking to buy in Dayton, it’s likely a distress sale and will either be a while to get escrow closed, or may have deferred maintenance and you’ll need to do some repairs if it’s bank-owned. However, the market has never been lower and you can buy a fabulous home for less than it costs to build.

(Data provided courtesy of the Northern Nevada Regional Multiple Listing Service and excludes manufactured and shared ownership housing for Areas 420, 416, 414, 412, 410, 402, and 403 known as the Dayton Valley and the outlying areas.)

_____________________________________________________________________

If you enjoyed my blog post, I invite you to connect with me on social networks, subscribe to my blog, and watch my videos?

_____________________________________________________________________

About The Author

Christianne Gordon, REALTOR®, CDPE, SFR is a Northern Nevada Real Estate Specialist that can assist you with the purchase or sale of real estate in Gardnerville, Minden, Genoa, Carson City, Dayton, and Reno/Sparks.

To search all available homes for sale in the Northern Nevada area, please visit GreatNevadaHomes.com or contact us for a FREE ListingBook account!

We had 57 homes sell in the Carson Valley in November 2009, compared to 29 sales in November 2008. With 59 homes sold in October 2009, we’re still selling homes at an even pace, and we’re much improved over the previous year. Sales volume was 193% higher in 2009 than it was in 2008.

Here is a snapshot of our market indicators for November:

• 57 homes sold
• Average asking price is $325,374
• Average selling price is $306,414
• Average days on market is 175

The average asking and selling price for Carson Valley Real Estate continued it’s reasonable and historic average in November.

So what is the absorption rate for the Carson Valley?

• There are 418 homes available for sale in the Carson Valley as of 12/16/09
• 57 homes sold in November
• 418/57 = 7.33 months of inventory

The absorption rate has remained essentially the same in November when compared to the previous month. As of December 16, 2009, we have 113 homes under contract in the Carson Valley. Of the 113 homes under contract, 60 are pending short sales (which are closing at a much higher success rate in the last 60 days) and 22 are bank owned properties.

Of the 418 homes on the market, 48 are bank owned, 49 are short sales, and an additional 3 are either Subject to Court Approval. That means that 24% of our market is distressed.

(Data provided courtesy of the Northern Nevada Regional Multiple Listing Service and excludes manufactured and shared ownership housing for Area 300, known as the Carson Valley which includes Gardnerville, Genoa, Minden, Indian Hills area of Carson City, China Springs, Spring Valley, Topaz Ranch Estates and outlying areas.)

Today, I received a question on my blog asking me about how asking prices have compared to actual selling prices in the Carson Valley for the first half of the year. Since it seems as though the market is moving at drastically different paces depending on price, I have pulled all Carson Valley sales and have broken them down by price to see if my instinct is correct. Here’s the summary:

Price Bracket: $0 – $200,000

• 71 Homes Sold
• Average Asking Price: $166,405
• Average Selling Price: $160,510
• Percentage of Asking to Selling: 96.90%

Price Bracket: $200,001 – $300,000

• 84 Homes Sold
• Average Asking Price: $256,050
• Average Selling Price: $246,692
• Percentage of Asking to Selling: 96.54%

Price Bracket: $300,001 – $400,000

• 37 Homes Sold
• Average Asking Price: $364,331
• Average Selling Price: $342,245
• Percentage of Asking to Selling: 94.66%

Price Bracket: $401,000 – $500,000

• 18 Homes Sold
• Average Asking Price: $489,816
• Average Selling Price: $461,185
• Percentage of Asking to Selling: 94.50%

Price Bracket: $500,001 – $750,000

• 12 Homes Sold
• Average Asking Price: $658,023
• Average Selling Price: $591,486
• Percentage of Asking to Selling: 90.53%

Price Bracket: $750,001 +

• 6 Homes Sold
• Average Asking Price: $1,578,000
• Average Selling Price: $1,287,000
• Percentage of Asking to Selling: 86.98%

What do we see from all this data? It’s clear that the higher the price bracket, the larger the difference between the asking and selling price, and thus, the softer the market. The reason I combined all sales above $750,000 was because there were only 2 between $750,000 and $1,000,000 which made for a very small data set.

I will do this same analysis at the beginning of January and then we can compare the first half of the year to the second half and see if we can find any trends to help us figure out if the market is strengthening or softening. Judy, thanks for the question, and keep them coming!

In the first post, we covered the topics  “Why Should I Own A Home?” and “Why Should I Use a REALTOR®?”.

In the second post, we covered “Real Estate Commissions Explained” and “7 Steps to Prepare for Home Ownership”.

In the third post, we covered “Your New Northern Nevada Home Wish List” and “Tips for Finding the Perfect Neighborhood”.

Whether you’ve owned a Northern Nevada home before, or you are a first time Northern Nevada home buyer, having a Buyer’s Guide can be a very helpful tool before, during, and even after the homebuying process.

Since most people don’t buy and sell homes every month, let alone every year, we have put together a fantastic 36-page “Just For Buyers” Guide.

In this post, we’re going to discuss “Get Your Finances In Order” and “Think Like a Lender: Let’s Do The Math”.

Get Your Finances In Order

Unless you’re independently wealthy, it’s likely you’ll need a loan from a bank in order to purchase a home. Since you’re going to need a loan, it’s a good idea to get your finances in order when you need them to approve you, they will.

• Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

• Reduce your debt. Lenders typically look for a total debt load of no more than 36% of income. This figure includes your mortgage, which usually ranges between 25-28%. You need to get the rest of installment debt – car loans, student loans, credit cards – down to 8-10% of your total income.

• Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

• Increase your income. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.

• Save for a down payment. Although it’s possible to get a mortgage with only 5% down – or even less in some cases – you can usually get a better rate and a lower overall cost if you put down more. Shoot for a 10-20% down payment.

• Create a Northern Nevada house fund. Don’t just plan on saving whatever’s left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

• Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than 2 years may mean you’ll have a higher interest rate.

• Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off balances promptly.

Think Like A Lender: Let’s Do The Math

There are specific math formulas that your lender will use to assure you are qualified to purchase the home that you want. Here’s how to figure them for yourself:

1.    GDS……also known as your Gross Debt Service ratio.

GDS = Annual Mortgage Payments + Property Taxes
Gross Family Income

2.   TDS……also known as your Total Debt Service ratio.

TDS = Annual Mortgage Pmts+Property Taxes+Other Debt Pmts
Gross Family Income

3.    28/36? …………… Calculate your maximum monthly mortgage payment (MMMP). These guidelines are conservative and sometimes can be stretched to 29/41 and are multipliers. The first refers to income only and the second refers to income less debt.

28% MMMP … Total Monthly Gross Income x 0.28 = _________

36% MMMP… (Total Monthly Gross Income – Debt Pmts) x 0.36 = ________

4.     Maximum Mortgage Amount……this is the maximum amount of mortgage you will qualify for from a lender (MMA).

MMA = (MMMP x 152) = ___________________

5.     Add Down Payment……what is the total amount of money you plan to put down?

MMA + Down Payment = _____________________________
Maximum Purchase Price

In the fifth post in this series, we’ll discuss “What to Expect When Writing the Offer” and “What Your Northern Nevada Home Inspection Should Cover”. If you’d like a FREE copy of our complete 36 page Northern Nevada “Just for Buyers Guide” just let us know. We’re happy to provide you with one to assist you on your road to home ownership.

This the perfect property for the family with toys. There is plenty of indoor storage for an RV, a boat, quads, jet skis, snow mobiles, motorcycles or you name it. The home is a three bedroom plus den/office/hobby room, 2,579 square feet, including an enclosed bonus room w/spa, all super clean and ready for a move in. There are two additional outbuildings – the first is a 24 x 48′ detached garage with shop. The larger is a 40 x 42′ additional garage with high doors. The home received a new roof in 2002.

This home is situated on 1.48 fully fenced acres. There are loads of possibilities and this home is just waiting for someone to come and put some loving touches into it.

View the Virtual Tour Here: 1501 South Riverview Drive

Centrally located 3 bedroom, 2 bath, 2 car attached end-unit townhome in Carson City. Homeowner’s Association Dues of $150 include partial utilites (water and trash) and master insurance policy. Nice great room with kitchen and dining nook also has bar height counters for a breakfast nook. Master bedroom and two additional bedrooms upstairs.

This property is price to move and is a great value. Priced at just $50 per square foot, the opportunity to own your home may never get more affordable than this.

For more information or a showing on this property, please call Christy at (775) 881-8223 or Steve at (775) 690-0685.

This home has been completely painted inside and out and it shows! New carpet and sheet vinyl wood styled flooring will have you thinking its hardwood, but it’s a snap to maintain! Very spacious rooms, a large family room, sunny eat-in kitchen with lots of cabinets, oversized 2 car garage, plus a large workshop out back wired for 220. Beautifully landscaped and perfect for entertaining. Convenient to schools, 395, recreation & more!

Situated on 0.71 acre lot and built in 1989, the home has great location and great use of yard and space. There is an interior fence with lawn in the backyard, perfect for pets or children, or whatever! There is also an RV parking pad with water – perfect for the family with an RV, boat or other toys. There is a 1.5 car garage outbuilding with electricity – perfect to store recreational vehicle accessories, garden tools – or use it as an art studio! Don’t miss the fruit trees – that’s a real rarity here in the high desert. Close to BLM, you can take great hikes and bike rights out your front door!

View the Virtual Tour Here! 1301 Santa Barbara Drive Virtual Tour

For more information or a showing on this property, please call Christy at (775) 881-8223 or Steve at (775) 690-0685.

The graph below charts the Reno & Sparks home sales volume for 2000 – 2009 (year to date):

As you can see, the volume of home sales continues to decline. For the first 9 months of 2009, there were 2,800 homes sold in the Reno / Sparks area. That means unless another 1,100+ homes sell between today and December 31, 2009, then 2009 will have the lowest home sales volume of the decade. For those of you that like to see the data, here are the numbers of homes sold by year:

2000 – 4,695

2001 – 4,835

2002 – 5,548

2003 – 6,163

2004 – 6,856

2005 – 7,261

2006 – 5,075

2007 – 3,936

2008 – 4,425

2009 – 2,800 for 1/1/09 – 9/30/09

I hate to be the bearer of bad news, but Reno and Sparks still have a long way to go towards becoming a normal functioning market. The good news is the relative affordability of homes in the area has improved drastically over the last 24 months. Can you imagine what our sales volume would have been had we not had the $8,000 first time home buyer tax credit to aid 2009 sales?

(Data is courtesy of the Northern Nevada Regional Multiple Listing Service, excludes manufactured or shared ownership housing, and covers Area 100, commonly defined as the Greater Reno & Sparks area including Pleasant Valley, Galena, South Meadows, Damonte Ranch, Hidden Valley, Caughlin Ranch, Arrowcreek, Stead, Cold Springs, Sun Valley, Lemmon Valley, Golden Valley and Spanish Springs.)