The Reno Real Estate Guide

Is the Reno Real Estate Market Finally Looking Up?

admin — Thu, 23 Feb 2012 04:32:30 +0000

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.

Freddie Mac Lied to the Nation

admin — Sat, 18 Feb 2012 04:54:53 +0000

If you ever bought or even tried to buy a short sale you are aware of the problems and difficulty in completing the transaction. You might have wondered, “how could the banks be so obstinate?”

We now learn that even though the banks may have been difficult to work with, much of the problem came from the government in the name of Freddie Mac. “But, I thought the government wanted to help us,” you say.

Freddie went out of their way to paint the investors as the enemy. They issued policy letters describing potential mortgage fraud with the intention of making the investor out to be the criminal. The only problem was that Freddie itself was the real fraudster.

The truth is that Freddie Mac actually placed their bets against the housing crisis actually ever getting solved. Freddie made money whenever they were able to stop a short sale. Freddie benefited whenever the rest of us lost.

For more than a year, Freddie Mac has adopted numerous policies designed to prevent the private purchase of toxic assets and forced servicers to enforce these policies. Demands for unreasonable offers on short sales, delays in processing short sales, affidavits preventing resale of their properties after being rehabbed and deed restrictions on real-estate-owned properties restricting resale price are among the myriad obstacles private buyers face in trying to buy Freddie’s inventory.

Besides delaying the unwinding of the troubled entity, several of these policies may in fact be illegal. Restricting the ability of private buyers to resell their properties and attempting to dictate resale value constitute unreasonable restraint on alienation. In plain English, once Freddie sells one of its toxic assets, it has no standing in future transactions related to the property.

Freddie has attempted to justify these policies through a taxpayer-funded media campaign arguing that the act of buying, rehabbing and reselling a property constitutes a crime and is inherently an act of fraud. Both Freddie and Fannie Mae have worked with enforcement officials to convince them of this lie. To the embarrassment of these enforcement officials, Freddie left out one important detail: Every time it stopped a short sale, Freddie made money.

Foreclosure Activity Likely to Increase This Year

admin — Sat, 28 Jan 2012 05:32:54 +0000

We can expect a large increase on foreclosure activity this year. At least, that’s what the LA Times thinks. Foreclosure activity has been suppressed because the lenders have been focusing on getting their act together. Here in Nevada they face an added burden of AB 284 which forces them to certify that all their paperwork is in order.

But, they are beginning to work through their backlog so we can expect an increase in activity.

The state’s difficulties were reflected in RealtyTrac’s report, which showed California with the third-highest incidence of foreclosure filings in 2011, behind only Nevada and Arizona.

Analysts also expect CA to stabilize quickly due to their fairly fast timeline. Nevada, on the other hand, is hampered by the effect of AB-284.

Reno Makes another Worst of List

admin — Fri, 27 Jan 2012 17:46:57 +0000

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.

Foreclosure Starts are Down Across the West

admin — Tue, 24 Jan 2012 20:12:53 +0000

Foreclosure starts are down all across the West Coast for December. Reduced filings were reported in California, Nevada and Washington. Nevada showed drops of 14%.

According to ForeclosureRadar the drops were due to the closing of trustee sale locations in California. Riverside County passed an ordinance prohibiting solicitation on all County property. California law only specifies that the location must be within the County where the property is located and must be published in the Notice of Sale. Nevada law states

2. All sales of real property must be made:
(a) In a county with a population of less than 100,000, at the courthouse in the county in which the property or some part thereof is situated.
(b) In a county with a population of 100,000 or more, at the public location in the county designated by the governing body of the county for that purpose.

Here in Reno trustee sales are conducted on the steps of the Court House on Virginia Street.

The slow down in Nevada was attributed to AB 284 which established new foreclosure rules requiring the lender and trustee to certify that they have done everything correctly.

“Nevada’s new foreclosure rules appear on track to bring a near complete halt to foreclosures in that state,” said Sean O’Toole, founder and chief executive officer of ForeclosureRadar.

“In the near term this will certainly help homeowners who were facing foreclosure, eviction, and potentially deficiency judgements. Longer term, we believe there will be unintended consequences for the state as business declines for the many real estate related companies that would normally service, resell and finance those foreclosures.”

The Informal Economy

admin — Tue, 24 Jan 2012 04:03:22 +0000

Are you a part of the informal economy? Do you do things outside of a formal work structure. Do you get paid in cash, under the table? Do you buy and sell using Craigslist, eBay or other routes? Do you ever hire the day laborers hanging out on Galletti Way?

The governments (Federal, State & Local) frown on this sort of behavior. After all, how would they get their cut. And, perhaps even more, how can they regulate and control you?

Here is a story of an itinerant New York City candy vendor who makes upwards of $150/day selling candy in the subway. It’s also a report on some of the facts of life about this segment of the economy.

It’s estimated that about 60% of all working people on earth work in an informal economy. A great benefit is seen because the independent entrepreneurs are not sitting on welfare or collecting food stamps.

What do you think? Would we be better off if this were legal?

Foreclosure Rate Heat Map for Nevada

admin — Fri, 20 Jan 2012 05:06:24 +0000

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.

Would You Catch a Falling Knife?

admin — Thu, 19 Jan 2012 02:15:41 +0000

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.

Unemployed Borrowers Get Break from Fannie Mae

admin — Sat, 14 Jan 2012 19:06:32 +0000

New guidelines from Fannie Mae followed similar guidelines from Freddie Mac on forbearance for homeowners that are unemployed and facing foreclosure. The loan servicer can grant six months forbearance without the GSE’s approval.

If the borrower is still unemployed Fannie Mae can approve an additional six months forbearance. After that the lender and borrower must consider other options.

The borrower is expected to repay the lost payments over a longer period. But in reality, in many cases the forbearance would simply amount to one year free rent.

This follows a similar program last summer for FHA loans and loan modifications.

Negotiate Like a Middle Easterner

admin — Thu, 05 Jan 2012 21:26:12 +0000

Anyone approaching or involved in a real estate transaction would be well served with good negotiation skills.

This article describes negotiating in the “Middle Eastern bazaar” and directly applies as a recommendation for Israel. This may seem to be completely irrelevant to real estate, but I think the principles presented here are rock solid in any negotiation. The article presents ten rules plus one bonus rule.

Never be the first to suggest anything to the other side. Never show any eagerness “to conclude a deal”. Let the opponent present his suggestions first.

The basic theme I read in the ten rules is that the party that wants the deal the least or has the least invested emotionally wins or gets the best deal.

And #11:

You should never agree to negotiate with more than one side. The Arabs will try to bring as many participants into the negotiating table to put you in an inferior position. Never agree to bring in even so called “friendly participants”. There is no such thing. Every participant brings with him his own agenda that could never be yours. For this reason never take part in “conferences” convened to deal with you, in which you will always be on the losing side.

For us this refers to friends, neighbors, or family members that are not directly involved in the deal. Real estate agents usually want to be able to act as the conduit or filter to the negotiations. They don’t like buyers and sellers talking with each other. The thought here is that it removes some of the emotion and personality clashes from the bargaining process.