Reno Fine Homes Blog

We are fortunate to live in scenic Northern Nevada which offers fabulous city, mountain, lake and golf course views.  I’m often asked how much as these views worth when buying or selling real estate. To take a stab at this question, I analyzed 2007 MLS sales data (through 12/27/2007) for 3 of the most popular golf course communities: Somersett, ArrowCreek, and Montreux.  The results vary by community, but overall golf course locations are still valued by buyers.

Somersett showed the biggest delta in average home price at a whopping 30%. However, much of this can be attributed to custom vs. semi-custom homes.  The lot premium for price per square foot was 9% for homes with golf course frontage.

 

ArrowCreek had the largest premium for price per square foot with a 12% delta.  I was really struck by the overall average sales price of $1,029,684. Of the 99 homes currently listed for sale in ArrowCreek, 44 are priced at $1 million or less.  The market for the semi-custom homes continues to be very slow in ArrowCreek.

 

Golf course premiums had little effect in Montreux.  There was a 3% increase in sales price for golf course homes, but a negative 2% price per square foot.  However, since 65% of the homes had golf course frontage, the impact was minimal.

 

So, what does this all mean?  If you’re planning to buy a golf course home, you should try to keep the price under the golf course premium. Since it’s a buyer’s market, you should be able to find a home with where the seller is willing to negotiate.  If you’re planning to sell a golf course home, you can factor the premium into your asking price; however, given the high levels of inventory, don’t expect to find buyers willing to pay it now.

Other views?  Over the next month I plan to do a similar analysis for city and mountain views.  If you need the information sooner, please let me know, and I’ll prepare a specific analysis for your neighborhood.

Data courtesy of NNRMLS

 

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There are currently 63 lots listed for sale in ArrowCreek.  Lot 126 located at 10305 Window Rock Trail is the only water view lot available.  It is located on the 10^th green of the Legend Golf Course and has panoramic city, mountain, and golf course views.  Priced at $467,000, it is $100,000 less than other premium view lots. Additionally, home plans designed by renowned architect, Steve Miles, have been created for this lot and are available.

 

Building costs are at the lowest cost in years, so now is a great time to buy a lot and build your dream home.  Virtal Tour for this lot may be found at http://10305windowrocktrail.com/

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Year to date the prices in the Reno Luxury Real Estate Market have remained stable, and have shown a modest increase during 2007.  However, because of mounting inventory, and few sales, this situation should change within the next 12 to 18 months.

MARKET OVERVIEWThe current market conditions for the $1 million plus market in the Reno area are extremely challenging. The number of million plus homes for sale in the Reno area has more than tripled in the past year and a half. On Feb. 1, 2006 there were 96 million dollar plus homes for sale; today there are 298!

Only 22 homes have sold for million plus since Sept. 1, 2007. The following graph shows number of listings by price band for each time period as well as the homes sold by price band.

The combination of increased listings and a low level of sales has casued the months on hand inventory to climb to 2 – 6 years worth of inventory!  The following chart shows the absorption rate (i.e. the number of homes sold per month by price band) and the corresponding months of on hand inventory.

 As shown on the above chart, there are over 48 months of inventory (4 years!) in the $1M - $1.25M price band, and over 71 months of inventory ( almost 6 years!) in the $1.75M - $2M price band. This means that at the current absorption rate per month of homes sold it will take this long to burn off the current inventory. This is without adding new inventory to the mix (which is unlikely).Because of this mounting inventory the basic laws of Supply and Demand suggest that there is going to be major pressure on prices on those few homes that actually sell in the next 12 – 18 months.  Data is courtesy of my Broker at RE/MAX Realty Affiliates and NNRMLS.

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The good news in the N. Nevada Real Estate Market is that the Median Sales Price for homes sold increased to $300,000, up 1.4% from the median price of $296,000 in October.   Although this represents a decrease of 5% from November, 2006, it’s one of the 1^st signs of a stabilizing market.

The number of homes sold also fell from 240 homes sold in Oct., 2007 to 187 sold in Nov., 2007.  At the end of October the residual inventory of single family homes for sale (on MLS) decreased slightly to  2.295 homes.

Data is courtesy of my Broker at RE/MAX Realty Affiliates and NNRMLS. It includes residential (site/stick built) single family homes in Washoe County.)

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Since we’re nearing the end of the year, I thought this would be useful information to start 2008 out on the right foot.

Find out where you stand.The first step toward developing a better credit score is to determine where it currently stands.  Start by checking with the three major credit reporting agencies (CRAs) listed below.  You’re entitled to one free report per agency, per year, and have the right to dispute any mistakes, so request that each CRA send you a copy of your report.            

Equifax             www.equifax.com           

TransUnion       www.transunion.com           

Experian           www.experian.com 

Figure out the facts.Credit reports in hand, take a good hard look at the data in front of you.  Credit reports are rarely as spotless as you think – that one late payment on your Visa can stay on your report forup to seven years (long after you’ve forgotten about it).  In addition, in October of 2004, CBS News reported that nearly 80% of credit reports contain at least one error, proving how vital it is to make sure that everything is accurate. After identifying any discrepancies, you need to eliminate them.  A dispute form usually is sent along with your credit report – or you can request on from the CRA’s website – so fill out the form and send it back to the CRA as registered mail.  Make sure you document each step that you take in cle3aring up your report in case you need backup later on.  Fortunately, the law is on your side, stating that any item that is not verified as accurate must be removed from you report. 

Call in the clean-up crew.You’ve cleared up any errors, but there are still a few legitimate dark spots on your report.  What’s a person to do now? 

Clean up.  Identify any debts that are still pending, and set up a plan for eliminating them.  Clearing up debt can take time, which makes it even more important to get started immediately.  Remember that you have the right to add remarks to your file, so take the opportunity to defend yourself and point out positive areas of your report, such as highlighting a loan that you paid on schedule. 

Fix, rinse and repeat.Time is your best ally when it comes to your credit report – consistent payments (no matter how small, so long as they meet the minimum) prove that you are responsible enough to repay loans as promised; over time they will outweigh the negative points on your credit report. 

Get Regular – in order to avoid any ugly surprises, check your credit information regularly, especially 60 to 90 days before a major purchase (like for a car or home). 

Prove reliability – while there are no quick fixes for upping your score, taking out a loan that you don’t need and then paying it back in a short span of time can prove that you’re a good credit risk. 

Too few or too many – the ideal position is to have a few lines of credit, never more than what you could afford to pay off on your income, and with none of them max’ed out.  Cancel old cards that you never use, but don’t max out one giant line of credit by putting your entire debt on it.  Prove your self-control by having between two and four lines of credit with a minimal or no balance on each.

©Buffini & Company – October, 2007

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