Category Archives: Reno Real Estate

Detroit Set to Foreclose on Thousands of Homes

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A lesson in vigilance.

Detroit is preparing to foreclose on as many as 62,000 properties this year. An estimate of half of them are occupied. These are all property tax cases.

Detroit desperately needs the money to support a huge unwieldly government that has plundered the wealth of that once great city.

Michigan in 1999 changed the way its local governments deal with people who fail to pay their property taxes, replacing a system of tax liens with foreclosure. Yet the number of foreclosures did not reach what advocates here view as a crisis level until years later, when the national recession hastened the city’s problems with blighted properties and population decline. By last year, at least 70,000 foreclosures had taken place here since 2009, not for unpaid mortgages but for failure to pay property taxes.

Read more here.

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Recent Foreclosure Laws do More Harm Than Good

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When Reuters finally figures something out we should all sit up and take notice.

Reuters has discovered that the blizzard of foreclosure laws, which were intended to solve the foreclosure problem actually caused more harm than they did good.

Nevada’s AB 284 is the case in point.  When AB 284 went into effect foreclosure action ground to a halt.  The banks were fearful of doing what needed to be done.  Consequently, the needed cure was delayed and the crisis was prolonged.

Notice of Default Filings

The government caused the foreclosure crisis.  And now the government set out to fix the crisis.  And whenever the government gets involved we can be sure that the government’s solution will be much worse than the original government induce problem.

When legislators attempt to protect the homeowner who hadn’t paid his bills they actually harm the lender and anyone that may want to get a loan in the future.  Why would a lender make a loan where the legislature could just declare that the loan never needs to be repaid?

“Many state laws that stretch out the period for legitimate foreclosures result in no added benefit for the homeowner and produce harm to the housing finance system and to neighborhoods,” said Alfred Pollard, general counsel to the Federal Housing Finance Agency, at a House of Representatives oversight hearing in March.

Ricky Beach, a Reno real estate agent thinks the law killed the market in the Reno-Sparks area.

Ricky Beach, a real estate agent in Reno, Nevada, said the new law, AB 284, “has pretty much killed the market here.” The lack of foreclosure activity has led to a dearth of inventory, he said, with the number of homes for sale in the area down to 778 today from more than 1,700 in September.

And,

“The bill did nothing to solve the crisis – it’s just prolonged it,” Beach said. “Sooner or later the banks will work out how to deal with the law. And then foreclosures will hit the market, and prices will crash back down.”

Malik Ahmad, a Las Vegas attorney agrees:

Malik Ahmad, a Las Vegas foreclosure defense lawyer who has spent the last six years trying to help vulnerable borrowers deal with unscrupulous banks, said the law had completely changed his view of the nature of the crisis.

“This law has become a mockery,” Ahmad said. “I am now turning down clients every day who I know have no intention of ever trying to pay their mortgage. They just want to stay in their homes for free. And that is a bad situation for everyone, lenders and homeowners.”

Read more here.

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Reno Real Estate: Are We at the Bottom?

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Where is Reno in in our current market condition for real estate? Is this a good time to buy a house? Should I jump in right now? Should I wait?

If you were to ask a Realtor, the answer would likely be that we’ve finally reached the bottom and now we are in the long, slow, arduous climb back to where we “truly belong”. But, have you ever seen a time when a realtor didn’t say that now was a good time to buy? Couldn’t be a better time?

Me, neither. I’m not suggesting anything nefarious about realtors, here. I just think that if they’re not optimistic about their product, how could they do a good job, anyway?

But all of that is beside the point.

As the saying goes, “the reason for a horse race is a difference of opinion.”

Keith Jurow, writing in Businessinsider.com is firmly convinced that we are still headed for a housing collapse. He examined major markets across the country and found price declines. Exceptions were in Nevada, Arizona and Florida where we have already taken major hits. Foreclosures are way down in most areas but the number of delinquencies are still high.

We are still facing some very serious delinquencies.  In many cases the problems were caused, or made worse by government action such as AB-284 here in nevada.  This caused the banks to drastically slow their foreclosures.  Consequently, the shadow inventories have grown substantially.

Nevada Foreclosure Filings

Nevada Foreclosure Filings: AB-284 Effective Oct., 2011

Jurow expects another significant drop in prices. Move-up buyers have disappeared because they lost most of their equity. First time buyers are usually limited to entry level properties. So, what’s left are the investors who are focusing on the “sand” states, which include Nevada. That may help us here in Reno.

Added to this we see a large number of potential sellers who, likewise, have little or no equity and are unable to sell. They may have taken out a HELOC or a cash out re-fi.

The bottom line is that I’m not optomistic.

Read more here.

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Chinese Drywall, Chinese Copper Pipes, It’s All the Same – Defective

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Do you remember the problems with Chinese drywall. It was making a lot of people sick and I think caused some corrosion and discoloration of the walls.

I think it happened mostly in the South. I didn’t hear of any cases here in Nevada.

Well the wonderful Chinese quality control is on display once again.

Imported Chinese copper pipe already blamed for leaks in hundreds of new homes, may not even be manufactured from copper and could installing copper pipe pose serious toxic health risks, according to a U.S. consumer watchdog group.

This time it happens to be the copper plumbing is failing. Apparently the copper is not all copper. You know that real copper is expensive and the manufacturers managed to slip in a bit of less costly metal along with the copper.

The Chinese manufactured pipes are being found as defective after they begin to slowly leak in crawl spaces under homes and in basements. Standard homeowners’ insurance policies do not cover the damage since policies don’t typically cover defective materials used in the construction of homes.

Apparently this time the problem is occurring nationwide.

Read more: http://www.housingpredictor.com/2012/new-toxic-scare.html

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Prices and Sales Up for Las Vegas, Inventory Down

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February single-family home sales in Las Vegas and their median price increased from the previous month, while the inventory of homes available for sale continued to decline.

The median price was up 2.5 percent from the prior month at $121,000, even though it’s down 5.5 percent from a year ago.

Inventory declined to 18,870 from a peak of more than 24,000 in 2007 to to 18,870 today. Only 6,543 units are available without contingent or pending offers.

Do you think Reno, too has hit the bottom?

Read more: http://www.lvrj.com/business/home-sales-prices-rise-inventory-dips-141878223.html

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Want to Sell? Make Your Home Stand Out

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What should you do if you want to sell your home?  How would you display it for the best results?  A recent HGTV show suggested that you should make your home appeal to the masses.

But this brings up a difference of opinion.  Alice Chan disagrees.  She thinks  homes targeted toward the masses are boring white boxes and that a house decorated in a plain manner would soon disappear in a blur.  Nothing would distinguish the house from any of the others that were viewed the same day.

Besides, she argues that the “masses” are not going to buy it and live in it. An individual is.

She believes the home should be targeted toward the type of person you would expect to live in the home.

Read more: http://www.trulia.com/blog/ailce_t_chan/2011/08/don_t_make_your_house_appeal_to_the_masses

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Is the Reno Real Estate Market Finally Looking Up?

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I’ve seen rosy predictions before.  I don’t know if real estate agents could do anything else.  After all, their livlihood depends on it.  Else, how could they sell something they thought to be a loser.  And don’t assume by this that I think the agents fib about their marketplace.  I’m not suggesting that at all.

So, I refer you to this article in NNBW by Kevin Annis about the Reno-area office market and I read it to mean that he thinks things are looking up.

Northern Nevada businesses will realize the worst is behind us. I recognize that this is not a measurable prediction; however, it certainly is worth recognizing. Companies that have weathered the economic storm have made it past the worst of it and will begin reinvesting in local economy.

For me, maybe – and maybe not.

Read more: http://www.nnbw.com/ArticleRead.aspx?storyID=18719

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Reno Makes another Worst of List

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Here’s another “best of”, “worst of” list and Reno wins another prize. It may not be the prize that Reno would like on its resume although it’s not necessarily our fault. It is not just a story about Reno or Northern Nevada. This is an American problem, and I believe it was completely caused by politicians.

This is a list from 24/7 Wall St. of 9 cities that the article claims were nearly destroyed by the recession. Reno was scored in second place.

2. Reno-Sparks, NV
> Pct. jobs recovered: 1.6%
> Q4 2012 jobs: 187,600
> Pre-recession jobs peak: 225,200
> Recession jobs trough: 187,000
> Pct. jobs lost: 16.9%

Between 2007 and 2010, the median home value in Reno-Sparks, Nevada declined 37.4%, the 13th biggest drop in the country among metro areas. The problems of the recession have plagued states in the southwest, which once had booming housing markets, arguably more than any other part in the country. From the beginning of 2007 to the third quarter of this year, jobs are projected to decline by 38,200, or 16.9% of the workforce. And according to the report, only 600 jobs, a mere 1.6%, will be recovered by the end of the year.

Read more: http://247wallst.com/2012/01/19/the-nin-cities-that-havent-recovered-from-the-recession/

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Foreclosure Rate Heat Map for Nevada

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We know that Nevada leads the nation in foreclosures but seldom with little supporting data.

This heat map from RealtyTrac shows the foreclosure data for Nevada county by county. One out of 177 housing units received a foreclosure filing in December, 2011. Washoe County had one for every 318 housing units. Surprisingly, Lyon County even topped Clark county with 1 for every 144 units. All this compares with 1 for every 634 units nationwide. Check it out.

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Would You Catch a Falling Knife?

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The question arises, has the real estate market bottomed out? And is this a good time to buy? Can you compare buying real estate today to catching a falling knife?

If you ever wanted to see a super analysis of the real estate market check out this article by Jeff Harding. He covers the many aspects of both residential and commercial and what I read, it ain’t pretty. He has great information and much more than I could tell.

he bottom line on the residential market is that home values will continue to decline in 2012 on a national basis, and if, as we are forecasting, the economy continues to flatten or decline, there will be no good news next year. Again, as we know, there is no “national” market and each locality has its own dynamics. But these data will have a negative impact on home buyers’ attitudes about the housing market.

The bottom line on the CRE markets is that prices appear to be flattening, but there is a substantial refi problem continuing to overhang the markets. As the bulk of these loans need refinancing at their maturity dates, it is likely that many of them will not be able to replace their loans and will face the requirement to come up with additional capital or face foreclosure, thus delinquency rates will remain high, especially in the sub-Class A markets. This has been the story of CRE for the past four years and there are no economic dynamics that would change it.

It is unlikely that investors and home buyers will be willing to catch a falling knife.

As he mentions, this describes a nationwide market and the reality is that all real estate markets are local. What happens nationally may not be the story for here in Nevada or in the Reno-Sparks area.

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