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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.

July 2009 Carson Valley Nevada Real Estate Market Report

We had 58 home sales in the Carson Valley in July 2009, a 26% volume increase year over year when 46 homes sold in July 2008.

Here is a snapshot of our market indicators for July:

• 58 homes sold
• Average asking price is $374,596
• Average selling price is $347,528
• Average days on market is 182

So what is the absorption rate for the Carson Valley?

• There are 479 homes on the market as of 8/4/09
• 58 homes sold in July
• 479/58 = 8.26 months of inventory

The absorption rate for the Carson Valley continues to hold steady after tightening up in June. I had predicted we wouldn’t see single digit absorption rates until the third quarter but the market improved in June and continues to stand strong in July.

Of the 479 homes on the market, 28 are bank owned and 56 are short sales. That means that 18% of our market is distressed. With everything that we’ve heard in our market, we are seeing more REO properties hit the market, but the good news is that we are 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)

How many homes sold in the Carson Valley in July 2009?

Courtesy of TravelNevada - Flickr.com

Well, today is only Wednesday, July 29th, so the official numbers are still 2 days away, but…whenever it gets to be the last few days of the month, I start itching to pull the Homes Sold in the Carson Valley so I can see how the monthly sales and determine if we’re on track. Here’s how July is shaping up in the Minden and Gardnerville area:

As of July 29th, here are some market indicators:

• 42 homes have sold in July 2009
• Average asking price is $392,629
• Average selling price is $363,376
• Median sales price is $247,750
• Average days on market is 188

So what can we glean from these numbers you ask? Well, here are the June 2009 sales numbers:

• 56 homes sold in June 2009 (full month)
• Average asking price was $362,924
• Average selling price was $343,345
• Median sales price was $243,500
• Average days on market was 250

This data supports a ‘gut feeling’ I’ve had about the Carson Valley Nevada Housing Market for about 6 weeks. Lower end homes are selling with multiple offers and are selling quickly. They are selling for more than the listing price, which is driving up prices in a very competitive market segment.

Since less expensive housing is harder to come by and more competitive, the middle market, which we call the $250,000 – $500,000 price range, is starting to see some movement. It’s harder now to buy a house for under $250,000 in the Carson Valley area, so buyers have two choices. One is to buy a more expensive house if they can qualify, and the other is not to buy. Our lower end market has definitely shifted from a buyer’s market to a seller’s market.

Will this trend last? We’ve received 4 new REO properties in the last 10 days. The second wave is coming and will prolong the bumpy ride for another 2 years, in my opinion. However, if the buyers today plan to stay in their homes for 5-7 years (as they should at a minimum) they should ignore the immediate market fluctuations and enjoy the homeownership that has become affordable for the first time in a long time in the Carson Valley area.

(Data provided courtesy of the Northern Nevada Multiple Listing Service and covers Area 300 whicih is comprised of Gardnerville, Minden, Genoa and outlying Carson Valley areas.)

The Carson Valley Nevada Real Estate Market saw 56 homes sold in June, up from 40 sales in May and 37 sales in April, so the good news is volume is trending up.

The average per square foot price ticked up slightly to $151.03, but the sales price as a percentage of asking slipped half a percentage point to 96.06%. These two indicators moved in opposite directions. Why, you ask? Well, while 75 % of the sales in June were under $350,000, 25% of the sales were higher. That’s 4% more sales this month than last month in the higher end markets. Higher end sales typically sell for a higher per square foot price, increasing the average per square foot price, but they also put downward pressure on the percentage of sales price to asking price ratio. The ratio for sales $300,000 and under was 96.87%, almost a full percentage point higher than the total market. That’s because the market is much more competitive in the lower price ranges. We are still seeing multiple contracts and prices being bid up from asking for properties under $250,000.

So how did the absorption rate end up? Let’s take a look…

• The Carson Valley area (Minden, Gardnerville & Genoa) currently has 453 homes on the market.
• In June, 56 homes sold
• 454 / 56 = 8.08 months

The absorption rate for the Carson Valley made a 2 point improvement after holding steady for three months. We are on the verge of a normal market from a volume perspective, which is defined as 5-7 months of inventory on the market. When you compare this to an absorption rate of 27 months in January, it is clear our market has made great strides towards normalcy. I had previously predicted that we’d see single digit absorption rates in the third quarter of this year – so our market improved faster than I had anticipated during June. However, it is important to keep in mind that spring and early summer are typically the busiest periods of time in the market.

Of the 453 homes on the market, 26 are bank owned and 46 are short sales. That means that 16% of our market is distressed. The biggest question of the day is whether more bank owned properties are coming. With everything that we’ve heard in our market, we are anticipating a second wave. It remains to be seen how the banks will dole out these properties. Even if they continue to trickle them out and inventory doesn’t spike upwards, the continued practice of reducing prices for a relatively quick sale will continue to put downward pressure on prices in our valley.

Today, there are 127 properties under contract / pending in the Carson Valley. That’s a lot of pending sales in the Carson Valley to close in the coming months. 

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.

Over the last five months, the real estate market conditions in the Carson Valley Nevada area have changed substantially. Just as buyers were reluctant to accept the slide in values over 2006-2009, it seems that buyers are reluctant to accept the fact that the market is moving much more quickly. Bank owned properties appear to be the reason why our market has changed direction.

Here is what the market looks like today for bank owned homes in the Carson Valley Nevada area:

As you can see from reviewing the chart, the bank owned properties have all but cleared out of our market. They’ve made up 33% of our sales in the last year. If we drill down a little further, we discover that the median price of the 148 bank owned homes that sold in the last year was $210,000. The median list price was $214,350.

It’s clear that bank owned properties have been sought out in our market over the last year and almost all have sold. Sellers have realized that if they truly want to sell their home, they cannot overlook the bank owned properties as comparables. The bank owned properties over the last year have helped sellers realize values have changed.

Now it’s up to buyers to understand that both banks and individual sellers have already priced their home to sell in response to how bank owned comparables have changed the market. Buyers are advised to have their agents run the last 90 days sales comparables for any property they are considering buying to determine if the price is reasonable. That logic also follows for bank owned properties. More often than not, banks have priced their inventory very competitively, and are not selling them for an additional 20% off. Bank owned properties in the Carson Valley are selling within 2% of asking on average.

If you’re considering buying a bank owned property, be prepared to act quickly. Have your pre-approval from the bank or mortgage broker of your choice ready.

If you’d like more information on bank owned homes in the Carson Valley, call me at (775) 881-8223 or email me at christy@greatnevadahomes.com.

(Our data is from the NNRMLS, excluding all shared ownership or manufactured housing in Area 300.)

The numbers for May are in! 43 homes sold in May in the Carson Valley. We had 37 sales in April and 39 in March, so we’re holding steady in terms of volume.

The average per square foot price also held steady at $145.06, and the sales price as a percentage of asking was 96.51%. This is one of the primary indicators I feel will show market traction and also will be one of the first to tell us when market appreciation will begin at some point in the future. If homes start selling at what they are asking, then future sellers will opt to start testing the market ever so higher. That’s a ways away but we’re heading in the right direction.

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

• The Carson Valley area (Minden, Gardnerville & Genoa) currently has 452 homes on the market.
• In May, 43 homes sold
• 452 / 43 = 10.5 months

The absorption rate for the Carson Valley has held steady for the last three months. The good news is that we are not far off from a normal market, which is defined as 5-7 months of inventory on the market. When you compare this to an absorption rate of 27 months in January, it is clear our market has made great strides towards normalcy. I continue to assert my opinion that the market is normalizing and by the end of the third quarter; I predict we will see single digit absorption rates in the Carson Valley.

Today, there are 137 properties under contract / pending in the Carson Valley. That’s a lot of homes to close escrow in the coming months further demonstrating the Carson Valley real estate market’s recovery.

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.

Today, there are 134 properties pending sale in the Carson Valley area. This is incredible news! The market is alive – maybe not well yet – but definitely alive and kicking in the Gardnerville and Minden area.

Of the 134 properties pending sale, 18 are bank owned and 53 are short sales. That means the remaining 57 are what I affectionately describe as “traditional” transactions.

So what’s left for sale??? There are 442 homes available for sale in the Carson Valley today, which is virtually the same as it was a month ago at 443. Mid-April there were 96 homes pending sale. So, the number of homes that have gone under contract has increased 40% from 30 days ago.

So how are we faring in May at a glance? Let’s take a look at today’s numbers:

• There are 442 homes available for sale in the Carson Valley
• 21 are bank owned and 60 are short sale – 18.3% of the market is distressed
• 134 properties are under contract and pending close of escrow

I am still standing by my opinion that the market is slowly recovering. That does not mean that I don’t expect some more bumps and bruises along the way. I think we are at the bottom of the market, and the uptick in sales volume demonstrates.

(Our data is from the NNRMLS, exclusing all shared ownership or manufactured housing in Area 300.)

Could it be true? Could the Carson Valley Nevada Real Estate market be nearing the bottom and stabilizing? I say, YES, and here’s why I think so.

As I have said in previous posts, I like to follow the numbers, because to me, the numbers don’t lie. I have pulled data from the Multiple Listing Service and here’s what I see:

The graph starts in June 2007 and shows an average sales price for each month. If you look closely, you’ll see that January 2009 appears to be a low spot.

The most important thing to see is the very end on the right hand side. Do you see it? Not only is it not flat, it’s creeping up ever so slightly. Over the last 3 months, the average selling price has stayed within $10,000 of the previous month’s number. So basically, the average selling price held steady. I believe this indicator is predicting the bottom of the market.

Here is my chart that I update every month with these statistics:

If you look at the average sales price for February, March, and April, you’ll see what I’m saying. You’ll also see that the per square foot price seems to be hanging in right around $140-145 as well.

Of course, only time will tell if my prognostication is right. One thing you CAN count on is I will share this information with you again next month and we’ll see if the glass really is half full and it’s time to be optimistic!

(Data provided courtesy of the Northern Nevada Multiple Listing Service and covered Area 300 which is all of Gardnerville, Minden, Genoa and outlying Carson Valley areas.)

It’s that time again for a mid-month market update for the Carson Valley, Nevada area!

Last month’s Carson Valley, Nevada market update report stated:

• There were 443 homes available for sale in the Carson Valley
• 27 were bank owned and 48 were short sale – 16.9% of the market was distressed
• There were 96 properties under contract and pending sale.

Every one of these indicators was healthier than the last 60 days and trending in a positive direction, fostering the notion that a recovery may be in sight for our little Carson Valley.

So how are we faring in April? Let’s take a look at today’s numbers:

• There are 441 homes available for sale in the Carson Valley
• 25 are bank owned and 53 are short sale – 17.6% of the market is distressed
• 112 properties are under contract and pending close of escrow

So what can we glean about the health of the Carson Valley, Nevada real estate market from this data?

• The number of homes available for sale is holding – so supply is stable
• The number of homes under contract / pending sale is increasing, so buyers are indeed buying
• The number of distressed properties on the market is – for the most part – stable for now

Things are continuing a slow and steady recovery in the Carson Valley. I am anxious to see how many of the 112 pending sales close this month. Last month 41 homes sold which was the third month in a row that the number of homes sold increased. If we can link together 6 months of positive trend data, I would be happy to stick my neck out and say we’re officially in recovery.

(Our data is from the NNRMLS, exclusing all shared ownership or manufactured housing in Area 300.)

As of March 31, 2009, there are 443 homes for sale in Carson Valley. The total number of homes available for sale continues to decrease. Two months ago, there were 485 homes for sale, and 5 months ago, there were 574.

Of the 443 homes available for sale, 27 are bank owned and 48 are short sale. That means that 75 homes are distressed, equating to 16.9% of the market. That is a significant decrease from my last market analysis post 60 days ago where distressed properties made up 19.1% of the market.

Today, there are 96 properties under contract / pending in the Carson Valley. So how does this affect the absorption rate? Let’s take a look…

• The Carson Valley currently has 443 homes on the market.
• In March, 39 homes sold
• 443 / 39 = 11.39 months

We are still quite a ways away from a “normal” market of 5-7 months, but we’re heading in the right direction!

(Our data is from the NNRMLS, exclusing all shared ownership or manufactured housing in Area 300.)