Chance Gates' Blog

Market Report Commentary

Absorption Months Supply of Inventory (Unsold Inventory ÷ Sales per Month)
– As of April 30th, there was 7.8 months of unsold inventory based on the April sales rate.
– Historical Months Supply of Inventory show that April MSI is up 1.4 months from March and up one month from
April 2010.
– In the past twelve months, there have been four months which have fallen into what is defined as a balanced
market. In the past 24 months, the market has remained as primarily a buyer’s market.
– The National Association of REALTORS® describes a balanced market as between 5 and 7 months supply.
– Unsold inventory includes Active Pendings. This method of reporting months supply of inventory follows the
industry standard of including all pending sales remaining in active status in the active inventory

Conclusion
– We continue to compare this April, with the market performing on its own, to last April’s Median Sales Price which
was influenced by the First Time Homebuyer tax credit. Looking at the period mid-2005 through March 2009, it’s
encouraging that we have not seen the rapid decline in pricing, but from that period forward there continues to be
some settling in pricing.
– April 2011 median home price of $155,000 is the lowest the Reno area has seen since 2000.
– April 2011 unit sales, although down from the prior month and the prior year, is still performing at near record
levels.
– Year-to-date 2011 sales are 13 sales ahead of 2010.
– In April, the “Bank-owned” sales category held the dominant share of the market with 40% of the closings.
– The affordability door is open to a wider range of buyers. This means that a two-income, household earning
approximately $10 per hour each, can now afford the median priced home in the Reno/Sparks area.
– Closed sales numbers in April set a near record as being fifth best April for single family sales number in history.
– Mortgage rates are at historic lows. Rates are predicted to move up before year end. For those with stable jobs
and who expect to stay in their home long-term, it’s an excellent time to buy.
– Inflation is hitting consumer pocket books in the form of increased gas and food prices. Fuel costs may have a
greater impact on the rural areas surrounding the Reno/Sparks market, including the Fernley market, as
consumers consider the cost to commute.
– The number #1 Job for Nevada is jobs!
– The Detailed Report is made available to members as a member benefit.

Logging in allows you to save your favorite properties and get instant updates price changes,  new pictures and open houses on the property.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.comhttp://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable For a free copy of my report   “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures. or   to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney.

In the local Reno/ Sparks real estate market, it takes more than painting and trimming the bushes to get noticed, to stand out, to make your home memorable.

1. Have your agent post ads  online listing sites: The more the better, I would recommend over 200 different sites at least to start.  Remember more than 80% of new buyers will start their new home search online.

2. Have a Toll Free Number: The main reason for this is so prospective buyers can get information on your house without having to talk to anyone.  It is important to remember that people love to buy things but hate having something sold to them.

3. If you or your agent are hosting an open house, be sure to serve light snacks and hand out something that attendees will remember. You want something that will be a positive reminder of your home—seasonal gifts are the perfect way to stay top of mind. Be sure to at least have pens and key chains with your agent’s name and contact information on them.

4. Create an informational flyer with all the local conveniences you can find: shopping, schools, universities, hospitals, malls, restaurants, gas stations and attractions in the area, in addition to local police and fire stations, even school bus pick up locations. Assume your open house attendees don’t know the neighborhood.

5. Hand out information pertaining to your home as well as information on the other listed properties in the area showing that your house is the best value.

6. Do some staging to make sure your home looks its best.

7. Be sure to offer incentives. Some examples include a Lowe’s gift card, paying for a year’s worth of yard care or a free session with a landscape architect, offering a $1,000 landscape allowance, paying for a years worth of homeowners fees…

8. Paint the garage floor (concrete paint). Making the garage look fresh and clean will make the whole house feel newer. Plus scrub out any oil stains that may be in the driveway.

9. Send letters to all the neighbors inviting them to “pick their neighbor,” and be sure to include information about your home and the open house. Give them an incentive to talk about your home with other individuals in their sphere of influence. (i.e. a $200 gift card if they find your buyer).

10. Put up signs in your front yard and be sure to hang up as many directional signs as the neighborhood allows. Also be sure your sign always has informational  fliers telling prospecting buyers about your house.

11. Have your agent create a video of your home and put the virtual tour on the Web. Make sure this is done by a professional with the right equipment so the screen does not bounce up and down.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.com or  http://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney.

Current homeowners buying a house between Nov. 7, 2009, and April 30 and who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight can qualify for the $6,500. It seems less is known about the repeat buyer credit. This incentive was added when the original $8,000 tax credit for qualified first-time buyers, which expired Nov. 30, was extended.

Houses purchased for $800,000 or less are eligible for repeat buyers. Single buyers with incomes up to $125,000 and married couples up to $225,000 may receive the maximum tax credit for both repeat and first-time purchases. The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Buyers earning more than the maximum are not eligible for the credit. If a binding written contract to purchase is in effect April 30, the purchaser will have until July 1, 2010 to close.

The 2009 credit for first-timers helped jump-start the sagging home market in the summer and fall, data show. Walt Molony, a National Association of Realtors (NAR) spokesman, said two million existing-home sales in 2009 could be attributed to the $8,000 first-time buyer credit. Although it is too early to measure the credit’s effect on sales so far this year, Molony said NAR chief economist Lawrence Yun believes it will add 1.5 million sales to the tally.

The repeat-buyer credit was added to appease builders, who said the original did not offer enough time to purchasers of new houses, which take at least six months to build, to close on them. New homes accounted for only 7% of the tax-credit-based sales, Molony said.

The National Association of Homebuilders’ Donna Reichle said, “We hear builders saying they are getting inquiries, but that’s all so far. According to our economists, it’s way too early,” Reichle said. “If you look back at the passage of the original $8,000 credit and impact on housing starts, it took a couple of months, and that was in the spring as well.”

Moody’s Economy.com chief economist Mark Zandi says the credit will boost sales “modestly,” however, by 300,000, with one-third trade-up buyers. “I don’t expect the credit to be extended again,” Zandi said. “Each time it is extended, it becomes less effective and thus more costly.”

David Krieger, senior vice president and general manager of Coldwell Banker Preferred in Philadelphia, says he believes that “a very large increase in our listing inventory in January is a result of the $6,500 credit.” Still, the $8,000 first-time credit remains the chief reason his company’s home sales were 33% higher last month than in January 2009, he said.

Typically, repeat buyers are better off financially than first-timers, so a lot of repeat buyers realize from the start they don’t qualify for the credit, Weichert Realtors agent Alec Schwartz said. “What they do realize, and what is getting more sellers to list, is that they understand that there are plenty of first-time buyers who qualify for the $8,000 credit out there, and they have a much better chance of selling their house and buying a new one than before,” said Schwartz, Liv Mansfield’s agent.

This is also true in the region’s new-home market, said Wayne Norris, regional sales manager for Hanley Wood Market Intelligence. “Builders have experienced increased activity in recent months” attributable to the $6,500 credit and “the fact that many potential buyers were able to sell their houses” to those taking advantage of the first-time buyer credit,” he said. The sense of urgency to make the tax-credit deadline and fears of rising interest rates will push new-home sales higher in the spring, Norris said.

(c) 2010, The Philadelphia Inquirer.

In the Reno/Sparks real estate market, I’m finding most of the  houses being sold for less than $200,000  are getting multiple  offers submitted on the property.

As a Reno/Sparks real estate professional, I encourage all questions or comments on the Reno/Sparks real estate market or any of the articles posted.  I can be reached by email at  chance at ballard-company.com or http://www.myspace.com/chancegates

Understanding Pricing
I realize it is hard to stomach, but short sales and foreclosures have driven the value of homes way down. The good news is houses are starting to sell if they are priced right. It use to be: that a seller could find the highest price house that compares to his, price his house a little higher, wait a couple months and he would sell the house. Now if a seller prices his house to high and waits a couple months the actual selling price is less than before. In order to sell a house, the price must be accurately determined to get a fast sale for the most money possible. If the house stays on the market longer than 7 days, with no activity, a price adjustment is needed. A seller needs to stay updated on other houses for sale, in his neighborhood, at least once a week.

Marketing
The way to market a house has really changed in the last few years. A seller use to be able to put an ad in the newspaper or magazine to create interest in his property. Now only about 20% of home buyers go to a newspaper or magazine before buying a house. Wayne Gretzky once said “A great hockey player skates to where the puck is going”. In real estate that is also true, a seller needs to advertise where the buyers are going. That is the internet; over 80% of buyers start their search by looking at houses on line. A seller should get his house on as many web-sites as possible, over 200 different sites is highly recommended.

Internet marketing is a good start, however in today’s market a seller can not stop there. He needs to have fliers made up and passed out to all his neighbors. More than 50% of houses sold come from neighborhood activity.

Open Houses – Good or Bad?
This is a question that will be different for every seller. It is very true that less than 5% of open house actually sell the house. There is no telling if a potential buyer is actually inspecting the house to rob later. However, it does remind people that the house is on the market and helps create conversation about the house. It also gives potential buyers a noncommittal way of seeing the house.

As a Reno/Sparks real estate professional I encourage all questions and comment on the Reno/Sparks real estate market or any article posted.  I can be reached by email at chance@ballard-company.com or http://www.myspace.com/chancegates

Got a house to sell?  Do what many builders already do when they get a qualified non-contingent buyer that comes in their door.  Make THEM an offer!

Buyers already have a record number of listings to choose.  This means that sellers must be creative and even aggressive.  You already have your home priced right (because you have a qualified listing agent and he gave you the right advice) and your home shows great.  Now comes the buyer and their comments are that they like your home and it is between your home and two others.  Instead of sitting and waiting to see if they make the offer, give yourself the advantage and surprise the buyer.

Have your listing agent write up the contract as a one time best offer.  You must be willing to make a good offer to the buyer in order for it to have any substance.  Your agent calls the buyers agent and says “I have a contract for your buyers from my seller.”   Image the shock, but this also makes the buyers agent job easier and even makes them look good to their clients.  They will love you for it.  Key point – You need about a 24 hour timeline for the answer.  Do not allow any further time.  Why?  What if you get another offer the next day?  Also, you need to put some gentle pressure on the buyer to make up their mind.  You will find out fast if you have a serious buyer or not.

This is a selling technique being touted as the new solution to a slow real estate market. The idea is for the seller to make a reverse offer to everyone who has looked at the house. After a showing, the listing agent working for the seller of the property calls up the buyer’s agent and tells them the seller is willing to sell the house to them at a discounted price. This is a reverse offer.

Sound confusing? Well it is, and whether it works or not is open to debate. Following is the major objection to a reverse offer.

So once the seller has a looker and the listing agent calls them up with a discounted price. What the interested buyers hear coming from the listing agent is that the seller is either desperate, struggling, getting divorced, sick, in financial trouble or needs to sell and is willing to negotiate a real bargain of a deal. Not the ideal position to be in for a seller to be starting the negotiation process but a dream scenario for a buyer

Chance Gates does welcome any questions or comments on the Reno/Sparks real estate market or on any articles that may be posted.  Send your  emails  to  chance at ballard-company.com