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August 2009 Dayton Valley Nevada Real Estate Market Report

We had 30 home sales in the Dayton Valley in August 2009, a whopping 200% volume increase year over year when only 10 homes sold in July 2008.

Here is a snapshot of our market indicators for August:

• 30 homes sold
• Average asking price is $192,775
• Average selling price is $184,528
• Average days on market is 148

These numbers are an increase in the average asking and selling prices in Dayton compared to July.

So what is the absorption rate for the Dayton Valley?

• There are 111 homes on the market as of 9/6/09
• 30 homes sold in August
• 111/30 = 3.70 months of inventory

The absorption rate for the Dayton Valley continues to be strong and under the 5-7 months considered a normal supply. This is a huge turnaround from the 30+ months of inventory we had at the beginning of the year. Dayton’s affordability continue to be a big attraction over the higher priced areas of Reno, Carson City and the Carson Valley.

Of the 111 homes on the market, 14 are bank owned and 27 are short sales. The number of homes on the market has shrunk from July’s 119 homes available for sale, and buying activity is holding steady. This is why we’re seeing increases in the asking prices and selling prices in Dayton. With such low inventory available, the Dayton Valley Nevada real estate market is quickly becoming a seller’s market.

With the first time homebuyer credit expiring on December 1, 2008, there’s a big incentive for homebuyers to get out there and buy a home. Will it be extended? Who knows??? If you’re a buyer debating buying a home right now in Northern Nevada, don’t wait for these statistics to continue to trend upward. It may just cost you the house of your dreams.

(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. Dayton Valley photograph courtesy of JeffMoser – Flickr.com)

August 2009 Carson Valley Real Estate Market Report

We had 41 homes sell in the Carson Valley in August 2009, compared to 43 sales in August of 2008. It’s always better to compare the same month in the previous year so that you’re comparing similar seasons. August is typically a month for vacations for children with families so the volume tends to be lower. Comparing year over year numbers gives us a clearer, more comparable vantage point than comparing August to July.

Here is a snapshot of our market indicators for August:

• 41 homes sold
• Average asking price is $360,741
• Average selling price is $338,120
• Average days on market is 153

So what is the absorption rate for the Carson Valley?

• There are 471 homes on the market as of 9/2/09
• 41 homes sold in July
• 471/41 = 11.49 months of inventory

Since our monthly number of sales dipped in August, that causes a slightly higher absorption rate in the Carson Valley. I think this is a temporary blip and we’ll see it come back down in September, since the number of homes on the market has held steady. Volume typically drops off in August due to the cyclical nature of the market.

Of the 471 homes on the market, 19 are bank owned and 62 are short sales. That means that 17% of our market is distressed. New bank-owned properties (REO) have been coming on the market, but we’ve been seeing multiple offers on every one of them. When priced below $175,000, the competition is stiff and sold prices are above listing prices. This is a good sign for our market, and we suspect that the competition will become even more fierce as we get closer to the December 1st deadline for the $8,000 first time homebuyer tax credit.

With the first time homebuyer credit expiring on December 1, 2008, there’s a big incentive for homebuyers to get out there and buy a home. Will it be extended? I believe it will be, but don’t bet on it! If you’re a buyer debating buying a home right now in Northern Nevada, don’t wait for these statistics to continue to trend upward. It may just cost you the house of your dreams.

(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 and outlying areas. Carson Valley photograph courtesy of ScottSchrantz – Flickr.com)

Welcome to the third post in a series of 7 posts covering the more important issues about buying a home in Northern Nevada.

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”.

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 Northern Nevada “Just For Buyers” Guide.

In this post, we’ll be covering “Your New Northern Nevada Home Wish List” and “Tips to Finding the Perfect Neighborhood”.

Your New Northern Nevada Home Wish List

While opinions on the type of home you want to own may change during the home buying process, use this easy checklist to help you prioritize and make the shopping process less time consuming.

How close do you need to be to:

• Public transportation

• Schools

• Airports

• Freeways

• Neighborhood shopping

• Recreational pursuits

• Other?______________________________________________

Other questions to Consider:

• What neighborhoods would you prefer?

• What are your future plans? (Growing the size of your family, kids moving out?)

• What school systems do you want to be near?

• What architectural style(s) of homes do you prefer?

• Do you want a one-story or a two-story house?

• How old a home would you consider?

• How much repair or renovation would you be willing to do?

• Do you have special facilities or needs that your home must meet?

• Do you require a fenced yard or other amenities for your pets?

Tips for Finding the Perfect Northern Nevada Neighborhood

The Northern Nevada neighborhood you choose can have a big impact on your lifestyle – safety, available amenities, and convenience all play their part.

1. Make a list of each of your Northern Nevada activities – your commute to work, health club, church – you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you’re considering to engaging in your most common activities.
2. Want to know more about the school district? The Department of Education in your town can probably provide information on test scores, class size, percentage of students who attend college, and special enrichment programs. If you have school-age children, also consider paying a visit to schools in the neighborhoods you’re considering. Even if you don’t have children, a house in a good school district will be easier to sell in the future.
3. Have questions about crime? Ask the police department for neighborhood crime statistics. Consider not only the number of crimes but also the type – burglaries, armed robberies – and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area?
4. Determine if the neighborhood is economically stable. Check with your local city economic development office to see if income and property values in the neighborhood are stable or rising. What is the percentage of homes to apartments? Apartments don’t necessarily diminish value, but they do mean a more transient population. Do you see vacant businesses that have been for sale for months?
5. See for yourself. Once you’ve narrowed your focus to two or three neighborhoods, go there and walk around. Are homes tidy and well maintained? Are streets quiet? Pick a warm day if you can and chat with the people working or playing outside. Are they friendly? Are there children to play with your family? Visit the neighborhood at different times – daytime during the week, at night during the week, on weekends in the evenings, and at other times.

In the fourth post in this series, we’ll discuss your “Get Your Finances In Order” and “Think Like a Lender: Let’s Do The Math”. 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.

Welcome to the second post in a series of 7 posts covering the more important issues about buying a home in Northern Nevada.

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

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’ll be covering “Real Estate Commissions Explained” and “Steps to Prepare for Home Ownership”.

Real Estate Commissions Explained

Northern Nevada real estate agents are paid on a commission basis. Most often, the listing agent and the buyer’s agent are paid a commission by the Seller based on the selling price of the home. The amount of the commission varies depending on what the seller offers.

Every Northern Nevada real estate agent sets his or her own commission fees. In fact, it is illegal to discuss what rates are “typical” in the market or for agents to discuss commissions rates amongst themselves. The industry considers this “market collusion” and an agent can lose their license if they are caught discussing commission rates.

Sometimes, the public has a perception that Northern Nevada real estate agents make a lot of money for not very much effort. What they public doesn’t realize is that real estate agents are not employees – they are independent contractors. While each agent may be affiliated with a broker – like RE/MAX or some other firm – the agent is in business for themselves. They have expenses to cover that are quite expensive, such as annual dues to the national and local real estate boards, license renewal fees every two years – for each state they are licensed in, quarterly fees to access the MLS (multiple listing service), quarterly expenses to have a lock box key, errors & omissions insurance (to protect the agent and clients from mistakes), and continuing education classes to continue to hold licenses. This typically costs several thousand dollars per year. This does not even include the marketing expenses associated with selling a listing, or the amount of time and expense to show a buyer properties. Plus – agents must share each commission earned with their broker – with the percentage of that commission split varying depending on the agreement the agent has with the broker.

The good news is, as a buyer, the cost for you to have an Northern Nevada agent representing your best interests is virtually free to you. Since the seller pays the buyer’s agent a commission for finding the buyer, you get great expertise for free! What a deal!

7 Steps To Prepare For Home Ownership

1. Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross income (your salary or earnings before any deductions). In order to be certain, get pre-qualified with a Northern Nevada lender and discuss beforehand the type of mortgage to plan to use to purchase your home. That way you can develop a budget and help keep yourself on track financially and not be tempted to overspend.
2. Develop a wish list of what you’d like your Northern Nevada home to have. Then prioritize the features on your list. Keep in mind that features are ‘essentials’ and bells & whistles are ‘nice to have but not necessary’. We will refer to this list often while viewing homes to help make sure the home is right for you.
3. Determine if you have enough saved to cover your down payment and closing costs. Closing costs, including taxes, attorney’s fees, and transfer taxes average between 2 and 7 percent of the home price.
4. Get your credit in order. Obtain a copy of your credit report.
5. Think like a Northern Nevada lender: Organize all the documentation a lender will need to pre-approve you for a loan.
6. Do research to determine if you qualify for any special Northern Nevada mortgage or down payment assistance programs. One common program used in rural Northern Nevada is the USDA Rural Housing Development Loan Program.
7. Find an experienced Northern Nevada REALTOR® who can help you through the process.

In the third post in this series, we’ll discuss your New Northern Nevada Home Wish List and Tips for Finding the Perfect Northern Nevada Neighborhood. 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.

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.

This post is the first in a series of 7 posts covering some of the more important components of buying a home in Northern Nevada.

Step One – Why Should I Own a Home?

Here are four simple reasons why it’s a smart idea to own your own Northern Nevada home.

1. Tax Advantages - The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.

2. Predictability – Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property t axes and insurance costs will rise (and this also depends on the type of mortgage loan you obtain).

3. Freedom - The home is yours. You can make design changes to update it or decorate it any way you want and be able to benefit from your investment for as long as you own the home.

4. Stability – Remaining in one Northern Nevada neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the opportunity to create long-term friendships that often can last well into adulthood.

Step 2 – Why Should I Use a REALTOR®?

1. A Northern Nevada real estate transaction is complicated. Buying or selling a Northern Nevada home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government mandated settlement statements. A knowledgeable guide through this complexity can help you avoid delays or costly mistakes.

2. Northern Nevada Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s so important to work with someone who speaks that language. When you find just the right Northern Nevada house, you want to be able to get the contract written and move forward right away – If you have to spend your time getting educated, you may miss out on that house of your dreams.

3. Northern Nevada REALTORS® have done this before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. That’s why having an expert on your side is critical.

In the second post in this series, we’ll discuss “Real Estate Commissions Explained” and “7 Steps to Prepare for Home Ownership”. 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.

Minden Nevada Homes for Sale in the Carson Valley – Spotlight on Johnson Lane

The Johnson Lane area is located in the northeastern corner of the Carson Valley. You can access the neighborhood by one of two roads that intersect Highway 395 – the two roads are Johnson Lane and, more recently added, Stephanie Way. The Johnson Lane area is laid out much like a grid and is, for the most part, all residential. Along the southern side of Johnson Lane there are some smaller light industrial buildings. The largest business located in the Johnson Lane area is the Starbuck’s Roasting Plant of Minden.

The Johnson Lane area is bordered by BLM land to the North and the East, providing excellent access to miles upon miles of hiking, biking and exploring trails. The other breath-taking feature of this area is the views of the Sierra Nevada Mountain range. In most of the Johnson Lane area you can see all the way from Mt. Rose to Kirkwood, and everywhere in between. The views of the valley and mountains are incredible, every season of the year.

Homes for Sale in Johnson Lane Area

• 78 homes available for sale ranging in price from $195,000 to $995,000
• 36 homes have sold in 2009 ranging in price from $185,000 to $500,000

Johnson Lane Area Sales Price Information

• Average Sales Price: $325,238
• Sale Price to List Price Ratio: 94.4%

Days on Market

• Average Days on Market: 162

(Data courtesy of the Northern Nevada Regional Multiple Listing Service for Area 302 known as Johnson Lane Area of Minden, Nevada.)

Popular Searches for Johnson Lane Area Homes:

• Homes Available with a Homeowner’s Association

• Homes on 2 or more acres

• Bank Owned Homes in the Johnson Lane Area

• Short Sale Homes in the Johnson Lane Area

• Johnson Lane Area Homes with Water Rights

July 2009 Dayton Valley Nevada Real Estate Market Report

We had 29 home sales in the Dayton Valley in July 2009, a 21% volume increase year over year when 24 homes sold in July 2008.

Here is a snapshot of our market indicators for July:

• 29 homes sold
• Average asking price is $177,596
• Average selling price is $174,472
• Average days on market is 114

So what is the absorption rate for the Dayton Valley?

• There are 119 homes on the market as of 8/4/09
• 29 homes sold in July
• 119/29 = 4.10 months of inventory

The absorption rate for the Dayton Valley continues to be strong and under the 5-7 months considered a normal supply. This is a huge turnaround from the 30+ months of inventory we had at the beginning of the year. Dayton’s affordability continue to be a big attraction over the higher priced areas of Reno, Carson City and the Carson Valley.

Of the 119 homes on the market, 14 are bank owned and 33 are short sales. That means that 39% of the Dayton Valley Nevada market is distressed. That’s a really high percentage. Our suspicion from seeing these properties in person when showing properties to clients tells us that these properties will need to drop their prices even further to get them sold due to overall condition. For every short sale or bank owned property, there is another property priced just a bit higher in much better condition that is selling faster.With a historically low amount of inventory in Dayton, we are anticipating the remaining properties in decent condition will see even more fierce competition, This will include multiple offers and sales prices above asking prices as we get closer to the December 1st deadline for the $8,000 first time homebuyer tax credit.

With the first time homebuyer credit expiring on December 1, 2008, there’s a big incentive for homebuyers to get out there and buy a home. Will it be extended? Who knows??? If you’re a buyer debating buying a home right now in Northern Nevada, don’t wait for these statistics to continue to trend upward. It may just cost you the house of your dreams.

(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, known as the Dayton Valley and the outlying areas. Dayton Valley photograph courtesy of JeffMoser – Flickr.com)

Most Northern Nevada first time homebuyers think they are automatically eligible for the $8,000 tax credit due to expire on December 1, 2009. Most media outlets, loan officers, and real estate related professionals will ask one question:

• Are you a first time homebuyer?

Answer Yes, and you will probably be told – Hey, you get $8,000 from the government once you close escrow! But does that really cover it? No, it doesn’t. In fact, there is a very specific series of questions that need to be answered to ensure you are actually eligible for the tax credit.

Here’s the entire decision tree that we use to help homebuyers determine whether they are likely eligible for the credit:

1. Are you a first time Northern Nevada homebuyer? (Or have you not owned a home for the past 3 years?)

If Yes, continue to Question #2. If No, sorry – you are not eligible.

2. Are you a Non-Resident Alien?

If No, continue to Question #3. If Yes, sorry – you are not eligible.

3. Is the price of the home you are purchasing in Northern Nevada $80,000 or higher?

If Yes, continue to Question #4. If No, your tax credit is limited to 10% of the purchase price.

4. Is the home your purchasing in Northern Nevada going to be your Principal Residence?

If Yes, continue to Question #5. If No, sorry – you are not eligible. Only owner-occupied homes are eligible.

5. Did you acquire the home from a family member, gift, or inheritance?

If No, continue to Question #6. If No, sorry – you are not eligible. You cannot buy a home from a relative or  any related person and qualify for this tax credit. It must be an “arms-length” transaction.

6. Are you going to close escrow and transfer title to the Northern Nevada home before to December 1, 2009?

If Yes, continue to Question #7. If No, sorry – you are not eligible. For new construction, you must take occupancy of the home before December 1, 2009 to be eligible.

7. Is your Adjusted Gross Income (AGI) under $75,000 for a single person or under $150,000 for a married couple filing a joint return?

If Yes, YOU ARE ELIGIBLE! BUT! (Yes, there’s always a ‘but’, isn’t there?) If you sell this home within 3 years of buying it, you have to repay the tax credit. There are certain exceptions to this rule such as divorce, death, natural disaster, etc.)

This list is not meant to be an exhaustive list of conditions. There may be other specific factors that are unique to your situation that could change your eligibility. We are not tax professionals and recommend you speak with one if you have additional questions.

If you are looking to buy a home in Northern Nevada and you meet the criteria listed above, call us. Don’t let this fantastic opportunity of an $8,000 tax credit pass you by.

As of July 15th, 22 homes have sold for the month of July in the Carson Valley Nevada area. 130 homes are pending close of escrow. Since most closings are scheduled toward the end of the month, having 22 homes already closed this month is very promising.

There are 465 homes available for sale and this number does not include the 130 that are pending close of escrow. That’s up slightly from the beginning of the month but still a very healthy number indeed. Activity on homes priced under $200,000 has been insane, with multiple contracts, dozens of showings, and prices escalating above asking price. The market is completely different when you get below $200,000. Is that because the first time homebuyer tax credit equals the 3.5% down needed to buy a home under FHA guidelines? We’re not sure but it very well could be.

With only 138 days until the First Time Homebuyer Credit expires on December 1, 2008, we are seeing a marked increase in the number of buyers looking and writing offers in the Northern Nevada area. Since we have no clue whether the $8,000 first time homebuyer credit will be extended, it has created a definite and noticeable sense of urgency for buyers who have decided to try to buy a home.

Are you eligible for the first time homebuyer tax credit? If so, what is your reason for not buying a home right now? If you’re not sure you can qualify, or you have some other concern, contact us. We have trusted lenders we work with every day that may surprise you. If you are looking in Douglas County or unincorporated Carson City, you can also use the USDA Rural Housing Development Loan and be eligible for many government incentives to make home ownership more affordable. Ask us for details.

Today there are 107 homes for sale in the Dayton Valley area. This is down from 136 homes available for sale from a month ago and 146 from two months ago. Of the 107 homes available for sale, 16 are bank owned and 23 are short sale. That means 39 – or 36% – of the market is distressed. This is the same as last month when the numbers were different, but 35% of the market was distressed. It appears as though the Dayton market is no longer suffering from excess inventory – not to mention excess distressed inventory – dragging prices down.

How is the absorption rate looking for Dayton? Let’s take a look…

• Dayton currently has 107 homes on the market.
• In June, 39 homes sold
• 107 / 39 = 2.74 months

In May, the absorption rate was 4.85 months. We now have 6 months of trend where the absorption rate is dropping in Dayton! This is great news!

With only 2.74 months of inventory on the market, it sounds ridiculous to even say this, but this is the second consecutive month of inventory shortage in the Dayton, Nevada area. Look to builders in the Dayton area to begin new construction again to feed the demand for product in this small, centrally located valley.

Today, there are 179 properties under contract / pending in Dayton. That’s more than double the number of homes that were under contract at this same time last month (83).

If you’re a buyer debating buying a home right now in Northern Nevada, don’t wait for these statistics to continue to trend upward. It may just cost you the house of your dreams. And if you’re a first time homebuyer, you only have until December 1, 2009, to take advantage of the $8,000 tax credit. It’s a great time to be a homebuyer but the market winds are shifting. Don’t miss the boat!

(Our data is from the NNRMLS, Dayton Valley area (Area=420, 416, 414, 412, 410, 402.)