October held steady in numbers across the board. In Reno, total active listings were virtually unchanged from September 1717 to 1697 in October. Sparks’ active inventory also stayed even with September, only adding 21 active listings. Number of homes sold in Reno dropped 16 to 401 in October. Sparks sold properties stayed about the same in October as in September. The other number we track is distressed inventory. In October Reno’s distressed inventory stayed roughly the same and Sparks added 23 homes for a total of 251. Though the temps outside are officially dipping into freezing during the night and the days are not warming up past high 50′s historically low interest rates and relatively low inventory are still bringing the buyers out to the offer table.
Of course we all know it – Reno is awesome for too many reasons to list in a blog entry. Now Livability.com which boasts an impressive advisory board made up of academics and CEO’s, has ranked 100 cities for the quality of life afforded to their residents -Reno is in 9th place. The method of ranking is based on 4 principles: Access, Affordability, Choice, and Utilization. Access includes basic elements like: schools, hospitals, infrastructure, and climate. Affordability focuses on cost of real estate (home ownership and residential rental price), as well as cost of healthcare, transportation, and food. This category also takes into account household income. We all love to have options, and one of the metrics used by Livability.com is choice, which investigates the variety of transportation and communication alternatives available to city residents. Finally Livability.com looked at how Reno’s residents are utlilizing the amenities available to them. Our great city has received a score of 631 on the Livability.com’s index. Reno is in great company with cities like Palo Alto, Boulder, and Miami Beach also making the top 10 list.
Realtors’ fundamental duty to the seller is to get the highest possible price in the shortest amount of time. A real estate agent should advise their client that the decision to exclude their home from the MLS may have a significant downside.
Properties that have been put up for sale but excluded from the MLS are known as “pocket listings” or “off MLS listings”. The MLS (Multiple Listing Service) is a data base of properties that are available for sale and are accessible to real estate agents that are subscribers to the MLS. The MLS information is also typically transmitted to internet sites such as Zillow, Trulia and Realtor.com and most broker websites. By keeping the details of the sale “in their pocket” and not exposed to all other Realtors and the general home-buying public, the property is not getting the maximum exposure to result in the highest and best possible price. A reduction in exposure may lower the numbers of offers and negatively impact the sales price.
Pocket listings are sometimes used for those sellers who say, “if I can get this price, I will sell”. But even then, how can the seller be certain that they got the highest and best price without exposing it to every potential buyer in the market?
Another instance when pocket listings are sometimes used for people who do not want the inconvenience of open houses, broker previews and the prospective buyers looking in their closets, bathrooms, etc. but the lack of privacy is outweighed by the assurance that the home was exposed and brought the highest price for the seller in the present market.
Some pocket listings may be motivated by commission savings. For example, a seller may only pay 4% commission if the agent represents both sides as opposed to 6% if another agent is involved. However the commission savings may be penny wise and pound foolish if the sales price would have far greater if it had full exposure vs. the few thousand in commission saving.
A pocket listing is usually a “dual agency” which means the listing agent also represents the buyer. This is illegal in some states as there is a presumed conflict that the same agent cannot get the highest price for the seller and the lowest price for the buyer. In Nevada it is permitted under Real Estate Division regulations but it must be CLEARLY DISCLOSED to all parties.
If the pocket listing is motivated by the greed of a real estate agent and the sole purpose is to make more commission or worse yet, buy it themselves or have a direct interest in the transaction without a clear understanding by the Seller, that behavior is actionable by the local board of Realtors and the Real Estate Division not to mention civil actions for any loss to the Seller.
The majority of Realtors put their clients’ best interests ahead of their desire to receive the highest commission. Before a seller decides to agree to keep their home out of the MLS, it is a good idea to speak to a few other Realtors to understand if it is the best decision to make.
It goes without saying that making a home appealing to prospective sellers is not an easy feat. In addition to making and keeping the home clutter free and sparking clean there are a few more ways sellers can attract a buyer to make their home the one that gets the best offer quickly.
Tip #1: Curb Appeal
A bit of flowers and color goes a long way for the curb appeal. Potential buyers are looking for a home that they will love living in and taking care. It’s always more inviting to take care of a home that already gets plenty of love and attention. You don’t need to invest thousands to make the front of your home look cared for. A mowed lawn, trimmed shrubs, and a dash of seasonal color tells the buyers, “Come see how manicured I am on the inside!”
Tip #2: Knock, knock…
In most cases the first part of the home that buyers touch is the front door. It is also the focal point of the exterior of the house. The door does not necessarily need to be brand new (especially if the home is older) but it should be free of cobwebs and dust and feature functioning hardware. Furthermore don’t be afraid to experiment with color or stain. Check out some DIY ideas for front door improvement.
Tip #3: Let there be light!
Just like poor lighting in the workplace makes employees less productive, a dark home makes buyers feel lethargic. Ideally a seller takes out as many hurdles as possible for the prospective buyer to come in and easily identify the home’s key features. A dark house not only makes it hard to showcase the home, some buyers may also wonder what is being hidden in the dim property. Some basic lighting tips include:
- installing clear incandescent bulbs that all match,
- cleaning existing light fixtures if they complement the home,
- replacing dated fixtures,
- adding mirrors opposite a light source to bounce light and make the space feel bigger,
- removing window screens and keeping the windows clean, and
- replacing drapes with blinds or shades which take up less space, are considered more en vogue and allow for more natural light
Tip #4: Make-it or break-it master bedroom
Let’s face it, not all master quarters are created equal and the trend in today’s construction is to “wow” the buyer’s with spacious and exclusive master retreat. Some ways to improve your master bedroom include: making the space gender neutral, removing personal items from night stands and dressers, sprucing up the bedding to complement the color and style of the room, and adding tasteful artwork throughout the bedroom to create a comfortable atmosphere.
Tip #5: Don’t forget the outdoor space
In many cases the backyard or patio is usually one of the last features to be seen by the buyers. To give a great lasting impression of the home’s outdoor area follow the same tips as for the front of the house. Green up the lawn, trim the hedges, go floral, add a veggie garden, and power wash all surfaces. In addition you may want to invest in a newer patio set and sun shade to allow the buyers to imagine what entertaining would be like in your home – which will hopefully soon be theirs!
Following up on our last post about increasing interest rates and home prices which have yet to decline, today the Mortgage Bankers Association (MBA) said that loan applications for purchase or refinance have dropped 13.5% for the week ending September 6 compared to the prior week. This puts the MBA mortgage application index at the lowest level since the depths of the financial crisis in November 2008. Though mortgage applications for purchasing and refinancing have both declined, the large drop was mostly due to a curtailing of refinancing activity.
Wells Fargo, the largest US lender is expecting to make 30% fewer loans during this quarter because of rising interest rates, while Bank of America and other U.S. mortgage lenders are laying off thousands of employees in their lending divisions.
As the mortgage rates increase home prices will need to adjust down to keep home ownership a reality. In the Reno/Sparks market inventory is still low enough to qualify for “sellers market” category – however, we are noticing that home sellers are receiving fewer multiple bids and are accepting below asking-price offers. As the rates rise, housing inventory will remain longer on the market and grow in number. As housing supply increases prices will decrease and it will once again be a buyer’s market.
We will keep a close on eye Fed policies and interest rates and summarize our findings here.
It is no secret that Washoe County real estate has seen the highest annual appreciation since the run-up of 2004-2008. With approximate price increase of 30%, the Reno market is 3rd in the country for highest home price increases. So a home that was worth $200,000 last September is now worth $260,000. While this is a big reason to celebrate for home sellers, especially those who were under water in 2012 and now with some equity, for buyers it’s a big concern because while home prices have been going up so have the mortgage rates. One year ago, the average 30-year fixed mortgage rate was 3.55%. At this rate a buyer looking to buy a $200,000 home would have a monthly payment of $904. Today’s average 30-year fixed interest rate is 4.57%. This is where the math gets quite unfavorable for today’s buyer. The $200,000 home from last year now costs about $260,000, add to that a one point increase in interest rates and the monthly payment on the same home today is $1,328. The difference between this same home sold and financed last September versus today is $424 which is a 47% increase in the monthly payment.
The anticipation is that we are in a precarious spot where interest rates have increased and the home prices have not adjusted to reflect the negative effect of higher financing cost. Most likely, if the rates continue to climb, we will be seeing price declines on housing across the country.
The Yard Sale was AMAZING! People drove in from as far away as Carson City and Plumas County, California just for the event. Here are a few pix. Remember you can still submit your best finds from the sale on our Facebook page for a chance to win some prizes!
Expand to see more photos.
We have a printer-friendly map and an interactive map showing the list of homes participating in the First Annual Community Yard Sale of Old Southwest.
First, some basic rules of engagement:
- Please respect the start/stop times of each sale. Do not knock on doors of homes on the list if their items are not displayed.
- Please be courteous to neighbors: do not block driveways, observe traffic rules, and watch for pedestrians.
- Play nice with other shoppers. There is plenty of great stuff for sale please no fighting over merchandise.
- Make sure you have plenty of cash on hand. The nearest ATM is Wells Fargo (Arlington/California)
- Have fun!
Map markers with dots represent homes that committed to extending the hours of their yard sale. See address list below for details.
View First Annual Community Yard Sale of Old Southwest in a larger map
Address List of Participating Homes
Below is the address list of homes participating in the First Annual Community Yard Sale of Old Southwest Reno. All homes are welcome to extend their yard sale hours past noon. Homes that committed to extending the hours of their yard sale show the extended sale time next to their addresses below.