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Reno Real Estate market, Reno Homes for Sale, Complete melt up of prices, record appreciation in Reno Homes for sale, Flipper’s crushing it!

Here is a copy of my take on the Reno Real Estate market, Reno Homes for Sale, this is a letter that I sent to my Reno Real Estate Investor’s:

Anyone who has been an active member knew by November and cemented in at our panel meeting the effects Nevada Assembly Bill 284 was going to bring to the market; decreased inventory/higher prices. We have seen YTD exactly that. Many member’s who took advantage of this and “went all in” have had/having incredible returns. It is my goal to keep all of you at least 6-12 months ahead of the market/herd.

I have been through the dot com real estate boom in Tahoe and of course the 2003 to 2008 bull run in Reno and I have never seen such huge profits in such a short amount of time YTD in Reno area!

Prices appear poised to keep rising for all areas in Reno under about $250,000. and stable to upward up to about $525,000. Above that; I am concerned about jumbo loan issues, losing upper end buyer’s from the medical field/St. Mary’s, impending health care bill etc. BTW; medical is one of my four M’s (Mining, Medical, Migrating Californian’s and My families money) that help fuel the upper end.

The MLS system has nearly turned into an auction house and even if a financed buyer does get the “highest and best” accepted, the homes many times don’t appraise and end up back on the market to get bid up even higher and bought by California cash investor’s mostly. If your looking for a deal, you have to be on Craig’s List, driving neighborhoods, asking garage sale people, carpet installers/cleaner’s, painter’s mailperson’s et al, bandit signs etc. in search of seller’s. On the sale side, MLS will get you more money than the Craig’s List buyer’s however.

If you are considering a short sale, get in contract sooner than later as the word has leaked out that we have one of the highest YTD appreciations in the country (below $150,000) to the lender’s and they are using higher BPOs, low market time etc. to counter at higher prices (on short sales). Short sale backups as I have been harping for the last 9 months continue to be a good play when shorts that are countered higher etc. fall out.

Bottom line; flipper’s ruled, buyer’s schooled so far this year, I see no signs of this once in a lifetime “perfect storm” scenario easing up through 2012. I would keep an eye out on increasing foreclosures/inventory sometime in 2013-2014 if AB284 gets resolved and then consider mining towns or out of state to ride out a possible “perfect storm” correction. With that said; there may be many people living for free, in what I call a “freeclosure” if foreclosures take a while to come to market. In that case, the market could rally for many years?

Oh yeah, I almost forgot, If Kevin Jones over at First American can sneak away from holiday family activities to us hard core work through the holiday investor’s he will elaborate on some mining town investment’s. We are all looking for the next Elko…could it be Winnemucca or Yerington (home of the $30,000. home).

If he can’t make it, I will run through my real estate investor’s checklist which you will need in the future rather than just buying from online pictures before somebody else does market we are in now and maybe some Craig’s List tricks.

Thanks,

Ron Bell

PS,
Mitch Argon sends us his best, he will be appering soon and his local market commentary is below:

Reno-Tahoe Region Real Estate Statistics – June 2012
Posted by Mitch Argon – CalNeva Realty on Monday, June 25th, 2012 at 10:01pm.

Reno-Tahoe Real Estate Market Snapshot – June, 2012

Welcome to the June, 2012 market update. Market conditions have not changed substantially from one month ago – tightening inventories, a lot of competition among buyers in the lower price ranges, and a continuing decrease in new REO listings due to AB-284. While it has “felt” like a Seller market, since early 2012, we are just now beginning to see some increase in median price (it takes a while for the ship to turn) and, of note, is a Reno median home price of $175,000 – a 21% over May, 2011 which was near an all time low at $144,450. Assembly Bill 284 continues to be a factor and I provide an update in the paragragh (and charts) below.
AB-284 (Assembly Bill 284) Update – For more background on Assembly Bill – 284, feel free to reference previous blog posts (November 2011 Market Update). For this month’s update, (courtesy of the Ticor Title Washoe County Housing Statistics Summary) the trend continues. Take a look at the chart (and/or prior monthly posts on market conditions in this blog). Based on some briefings I have recently attended, it seems clear now that this law will not be revisited by the Nevada lesgislators until early 2013 and changes, if any are made, will likely not be felt in the local markets until late 2013 at the earliest.
Below is a brief summary of each local market with year over year details:
•Reno – During May, home sales were up 3% from May, 2011 – 333 homes sold. May’s median sold home price was $175,000 – 21% above May, 2011 – we will see if this turns out to be a one month ‘blip’ or if this market is reaching for a new plateu; a continuation of this climb is unlikely in the near future. Reno Months of Inventory for June is at 5.2 months – 31% lower than June, 2011 and the same as May, 2012.

•Sparks – Sparks homes sold in May totaled 180 (up 1% from one year ago May sales); median home price equals $157,250 – up 3% from Spark’s median home price of one year ago. Months of Inventory for Sparks is at 4.2 months, 31% lower than June, 2011 which is consistent with the market experiences mentioned earlier in this blog post. Home inventory levels for Sparks (and Reno) are also trending down from levels of one year ago. Again, while Reno showed a big jump in median price for May, 2012, Sparks will likely see some increase very soon based on the low levels of Months of Inventory.

•Carson City – There were 66 homes sold during May, 2012 which represents a 74% increase from May, 2011! Carson City’s median home price was $135,750 in May – down 1% from prices a year ago. Carson City Months of Inventory is at 5.4 – this indicator continues to trend down quite rapidly and is pointing towards a stable to slightly increasing market in the near future.

•Carson Valley – Homes sold in May 2012 totaled 62 – a 19% increase over May, 2011. The Carson Valley median home price at $182,750 is 6% lower than the May, 2011 median price. At 7.0 Months of Inventory (down 21% from the same time one year ago), this market is moving closer towards more stable pricing but is likely still a ways off compared to other local markets in the region. This market, however, is heating up and continues to be ‘competitive’ for home buyers in the lower price ranges.

•Lake Tahoe – With 11 homes sold in May, the Tahoe market (Douglas County only) was 12% over the May, 2011 sales volume. Months of Inventory, at 16.5 months, is 15% higher than June, 2011. The median home price was $400,000. This market is much more seasonal due to the vacation/recreation seasons at Tahoe and we are just beginnning to enter the summer season – we’ll see how much activity develops in the lake “front” and lake “near” market over the next 3-4 months as a barometer for the luxury home market. Due to the small sampling size of homes sold and the wide range of home prices at Lake Tahoe, the median price shows wide fluctuation on a monthly basis.

•Dayton – Dayton home sales in May, 2012 totaled 34 homes – a 55% increase over May, 2011. Months of Inventory is at 5.6 months – 26% lower than one year ago. Dayton median home price, at $118,950, is down 1% from one year ago. Dayton inventory levels are also trending down to levels not seen since late 2009.

•Fernley – The median home price for Fernley in May, 2012 was $90,000 – a 5% increase over the median Fernley home price in May, 2011. Fernley saw 48 homes sold representing a 14% increase over May, 2011. Months of Inventory is at 4.6 months and now in the range with Reno and Sparks. Based on affordability, months of inventory, and what we are seeing in Reno/Sparks, I would expect the median price to slightly rise and stay in the $90 to $100K range for the remainder of this year.

Ken Amundson the premier Nevada statistician at our April 2012 meeting on the market/AB284: http://www.youtube.com/playlist?list=PL80078B47FE7151E6

I will post the latest real estate statistics here: www.renohomevoices.com

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