A comment by Frequent Poster on my previous post explained his reasons for purchasing a home this month. Frequent Poster provided some insight into what motivated him to purchase despite the current market uncertainties.
I work with many clients who are buying at the moment, and they all have their own reasons. If you have purchased a property recently, I’d love to hear why. What was the driving force? What are your concerns? If you don’t mind sharing, please post your response in the comments below.
And in case you missed Frequent Poster’s comment, here it is:
Just bought a nice place in south Reno in March. I guess I’m not objective anymore. Add my place to the March stats when they are tallied up.
I notice that I don’t too much care about the immediate pulse of the market since closing. I’ve been a bit obsessed about it for the last few years. Now that I have a place, and one which I intend to own for the next 10+yrs, I could really care less about the state of the general market.
What I do know is that I could not have hoped to have to have built the place I bought for anything close to what I paid. I have great views of Mount Rose. I have lots of room to roam. I can reliably make the mortgage payment for the rest of my life, if necessary, but hopefully I outlive the mortgage.
Downsides? Property taxes are a bit out of wack, as they are based on the house’s bubble price. But, as I have two kids in school, consider it my contribution to Washoe County’s severely underfunded and poorly performing school system. Also, the heating bill will not be cheap next winter.
Upsides? No landlord to deal with. No HOA (I can paint it with those purple polka dots I’ve always dreamed of). One acre, so I don’t need to worry about hearing my neighbor yell at his wife (or vice versa).
So, I am not trying to be dismissive of the great pain that many are experiencing in northern Nevada right now. But, for me, it was a GREAT time to buy. No, I am not an agent.
E,Edward
Well first and foremost,
How would one draw the conclusion from the recent post that “frequent poster” is in-fact a He ??
Maybe “frequent poster” is somehow an affiliate?? Hmmm
Maybe the Meir POST of “frequent poster” forthright claim to care-less about the current state of the market is in-fact an indication that “He” does care?
Look, If future +or- equity is not a factor then why implicate building cost vs out-right buying……..Maybe I’m missing something here but this seems completely senseless?
Hopeful & confident these interesting articles remain somewhat neutral/unbiased, Maybe the next one would read something like this …”WHY DIDN’T YOU BUY IN THIS MARKET”
just my 2-cents
PR
I don’t care the market is going up or down anywhere else. For here, the real budget cut will start July 1, 2011. I’m waiting for Spring 2012 or even Spring 2013 when we will get closer to the real bottom for this area…
Just my 2c.
Laurel
We made an offer on a house in August, closed in October, and moved in in January. Why? A house in our neighborhood that we’d always liked came up for sale, it was a price we could afford because it needed a lot of work, mortgage rates were great, and my husband had recently retired and had time to work on it. We knew we were taking a risk prices would keep falling, but we got an affordable fixed rate loan and plan to stay here indefinitely.
Move to Reno
I bought a house in January. Had been looking for 3 years and saw a lot of houses and neighborhoods. The house I bought had all the items that I was looking for: Gated community, plenty of rooms, no neighbors in the back, gourmet kitchen, big lot, new construction, best builder in town, cheap price, etc. I believe that the bottom is in or very close. The subdivision I’m in has 72 houses built in 2004. A number of them are foreclosures and I noticed that several of them sold at list for cash. Replacement cost of the house, according to my insurance company, is about $130k more than I paid and that doesn’t include the value of the land. Probably will move into the house in late 2012. Will spend about $20k to improve it.
I have some experience in the stock market and know that one can only hope to buy near the bottom because the actual bottom is only seen in the rear view mirror.
Joe
Closing on my first home purchase in a few weeks. I signed the contract about 5 months ago and they started building. We had made or wanted to make offers on a few houses at that time, but the ones we liked were pending short sale/loan/whatever. There were really no homes on the mls in the area we wanted to live in that were available. So we decided to have one built. Twice as big as the home we are renting, the lot is 3x as big, new construction and about $105/sq ft. I was as down on the market as RI and BB since 2006 on this blog, but now for me the time was right. My reasons: low interest rates, our monthly mortg payments are only slightly mire than our current rent after tax advantage, in the last year the few homes we liked in our area that hit the mls went pending within days (some still are after 6 months), we needed bigger home and lot, and to rent one this size would cost much more than buying. If “price” of my home drops another 10%, no big deal. Another 30%? Well then I figure northern NV would be in such a mess we’d all be screwed. Oh, and I beleive inflation is coming soon enough. Sorry for typos, I’m writing on my phone
Steve Herschbach
I bought last May so coming up on a year ago. My wife and I wanted to get into Old Southwest and after shopping for over a year saw something that suited us that we could afford.
Zillow sends me an email every month telling me how my house has gone down in value yet again. I can’t say that makes me happy. But I paid cash for the place so it is not like I can get upside down on it. The fact though is that I have diligently shopped the area ever since and not one property has come up that I would have liked better for less. If that were the case perhaps I would kick myself in the posterior but so far it is just not happening.
I have no plans to ever sell the place, so since it is an old property I am boosting the economy. Plumbers are moving washer and dryer from basement to closet in upstairs bedroom. Landscaper is busy making a courtyard for me. Garage door and gutters getting replaced. Hardwood floors getting refinished, kitchen floor tiles replaced, etc., etc. We are settling in for the long haul and so these are investments we will enjoy for the next 20 or 30 years.
I am one of those that think the markets that have dropped faster and harder are going to correct sooner rather than later. I got a quality property in a great location so I am confident in the long term. Unless of course the entire world economic order collapses in which case we are all screwed but I have not given up hope in this country yet. Things are bad right now just like they have been bad in the past but somehow we muddle through.
I work in retail and I can promise you one thing. Inflation is here, now. Every new price sheet I get has increases. Taking cash and putting it into things that are solid and real is a pretty good idea right now.
Steve Herschbach
cash flow
Bought a one bedroom condo for $64k. Neighbors bought during the boom for $215k.
Why did I buy? For the cash flow. Getting 1k a month rent. Paid cash.
Comeback Kid
Nice to hear the positive side of home buying. It goes to show one man’s housing slump is another mans opportunity.
The doom and gloom, although real, was getting to be the same ‘ol, same ‘ol here. And it was getting tiring watching everyone beat up on Smarten, although I guess that’s been solved , huh? I thought he added a lot to the blog, but seriously can’t blame him for exiting.
So kudos Guy for putting forth a positive article.
Gadfly
I have not bought anything myself (although I am starting to look more seriously at investment properties), but a family I know recently closed on their first home. They were able to purchase a larger house (on a larger lot) than the one they were renting with a mortgage payment (30 year fixed) 20% lower than their former monthly rent. They had been watching the market for a few years, and what my friend always told me was that he would buy when he found a house that he and his wife liked and that they could purchase with a monthly mortgage payment less than their rent. That is what they have done. If I were in that situation, I might do the same thing.
Gadfly
I will second what Comeback Kid wrote above. I believe the market has farther to fall, but that does not mean opportunities are not available now, and it is good to talk about those positive opportunities as well as the continuing problems. For example, for first time buyers with good credit and solid income, there are many great starter homes available. However, it is still not a good time for move up buyers, and the high end market problems have been thoroughly discussed here.
And I also agree with Comeback Kidd about smarten, I miss reading his views, even those with which I did not fully agree. I understand why he chooses to no longer post here, but I for one would like to hear his views on the current market.
tallguy
Bought even before this market (2008), and still happy that I did, we got a really unique and fun place to live. Frankly, the wife and I would pay even more for the house we have, we love living here, and would do it again. House worth less? Yep. Do I care? Nope. Haven’t really lost a dime, cause it isn’t for sale and we are here for the long term.
Martin
I would be interested in knowing how many of the people who have recently purchased were “move-up buyers”. How many of you sold a house and then “moved up” to the house you recently bought?
Thanks to all in advance for responding.
Phil
I would also be interested in knowing the price range of these recent purchases. My guess is that most who have recently bought were not “move-up” buyers and did not buy much above $300K.
I think we still have a tale of two markets in Reno. It’s really hard to suggest that Cash Flow made a bad deal in buying a rental condo at $64K. How much more can it fall from here? However, still about 92% of all sales are under $300K. There is just no upward motion to this market. Still very few move-upers and not many first timers above $300K.
John
@CASHFLOW
Thanks for the side splitter!! Lmao next time don’t make yournliesnso obvious !
Care to share what condo you bought for $65k that cash flows $1,000/month??
I didn’t think so!
Lmao!!!!
Joe
In the 300k’s, first-time buyer.
RRB Fan
I doubt there are any move up buyers … just first time buyers across the different price points, including 300K. I’m currently looking a home for my retired, elderly parents. We missed out on two in South Meadows that were priced ~20% less than they sold for new in 1998. In both cases the bank literally had just accepted an offer when we were sitting down to write one.
My experience over the last few months of serious looking is that nice, well priced homes move. A lot of what’s out there is just plain awful. I have found that standard sales are generally overpriced, short sales can by very nice but they may never close — a friend is 5 mo in and still waiting, and that bank owned properties can be hit or miss — very nice to trashed. I’ve found it quite challenging to find a SFR that is nice and move in ready (i.e. no full or partial remodels needed), no major deferred maintenance (e.g., new roof), and a good value (in my book < $100/sq ft). I'm looking mostly in NW, W-SW, and South Meadows/DD areas at places from 1,500 to 2K sq ft.
If you have any thoughts or suggestions I'd be happy to hear them. I'd love to know more about the $64K condo that rents for $1K and the subdivision that Move To Reno bought in — it sounds very nice.
Sully
RRB fan, there are a lot of houses that meet your criteria built 05-06. However, they’re not in the areas you mentioned.
geopower
I bought last spring in west Reno. I was a first-time, non-move-up buyer, and I expect to be in the property for at least a decade. I found a large property with established vegetation and water on it, in an old part of town and walking distance to shopping, the river and open space. I have room to pursue my hobbies, which include fruit trees, one of the pressing reasons why I didn’t want to be a renter anymore. I don’t have to deal with any HOA rules or dues.
I didn’t get a crazy bargain, and I certainly paid well over the median if you consider my house on a PPSF basis, particularly for an older home in need of updating. But it was within my initial budget (<300k) even with the expected repairs needed, and I got more quality land than I ever expected I could. At the time I was actually considering buying a small cottage in old SW and then looking for a separate piece of land to put an orchard on. Now I have both together and I love the property and neighborhood. I sometimes have qualms that I could have bought a house in better shape for much less money, but I always feel better when I look out across the yard.
I have a job in an industry that I expect to keep me in Reno for the long term. I have my share of qualms about the culture and finances of the city and state, but the friends I've made here and the people I meet around town give me plenty of reasons to be optimistic about the future of our area. Clean water, fresh air, local food production and great access to the outdoors aren't everything a good city needs, but they're hard to create after the fact. I think the city has a lot of potential, and I'm at the point in my life when I'm ready to put down stakes and do my part to try to improve it. And that's why I bought my house.
renointeriordesigner
“Be greedy when others are fearful and fearful when others are greedy.”
eileen
I bought a Smithridge townhouse this year. Although I live in Las Vegas, I find properties up here easier to manage and find good tenants. I don’t pay attention to prices from one month to the next, and will gladly accept good cash flow while I wait for the market to recover.
Move to Reno
RRB Fan, I didn’t want to admit it at the time but the zip code is 89044. I’m sure that Reno has similar subdivisions built during the boom. The original owner of my house bought 3 houses in the LV Valley in 2004 as rentals. He lost his shirt and was foreclosed on all of them. C’est la vie.
red
Great idea for a thread topic. I recently bought a house in short sale in my neighborhood. I was able to get it for a great price of almost 1/2 the price of the first one that i’ve owned for 7 years. I bought it because it was a nice house that had a lot of potential. It was falling into disrepair and I wanted to improve the neighborhood. Since I knew I was ‘catching the falling knife’ as it’s said on this board I had to be very comfortable owning the house permanently, which I was. After I made some minor exterior repairs to it, an owner occupant buyer made me an offer without listing it. I sold it for a very small profit (maybe minimum wage for my time). It did take a long time to go through the original short sale, so I had to have patients. Honestly, I would have been happy to keep it, and I have a little sellers remorse. However, ultimately I got what I wanted, which was an improved neighborhood, a proud first time homeowner in my neighborhood, and i didn’t totally lose my shorts.
I imagine I’ll be flamed for being biased since I own in the neighborhood, but I have nothing to gain from this posting. I’m just offering my experience and reason for buying in this market. I’m happy I did it, and will do it again if I get the opportunity. It is by no means a get rich scheme.
A little side note about the short sale. I made the bank an offer, the bank counter offered higher. I then counter offered my original price and included a list of the required repairs and the bank accepted.
Cheers!
Bonanza
1. I’ve always liked the east side of the Sierras.
2. Reno is still close enough to family in Sacramento.
3. Reno is a nice small city. Desert and mountain scenery. Close to Lake Tahoe and skiing. Low crime.
4. We really like Somersett. One of the most beautiful planned communities in the country.
5. Great prices now. We got a 2500 sq ft house with a view for just under $300,000.
6. We probably should have waited another year but we were able to get a 30 year fixed for 4.375% a few months ago.
John
CASHFLOW
We all are awaiting your Answer on the condo you bough for $65k that cash flows $1000/month!
I smell a liar!
John
@ bonanza
With all due respect do you really see interest rates rising that much in the next 9-12 months?
Bonanza
I just checked and interest rates are 1/2 % higher now. A year from now interest rates could be 1% higher and home prices 10% lower. Looks like a wash to me. Our 4.375% loan is going to look real good when CD’s are paying 10% because that is where we are heading with the coming inflation.
John
BonanzA
What do you think will happen to the value of housing as interest rates start to rise? I’ll tell you what I think will happen! Prices will come down even more! 10%? depends on the price band. At $300k I still see an easy 20-25% correction
Move to Reno
I don’t see interest rates moving up very much for a long, long time. When they do move up the housing market will be back to being a seller’s market so the net affect will be a wash.
New in Spanish Springs
I recently made a cash offer in the mid-300s on a short sale about 10% under the listing price. The sale closed at my offer in 30 days with nary a hitch. My wife and I love the neighborhood and neighbors, very private rear of the property (.5+ flat acre), clean air and basic bones of the 10 year old house. We’re doing an extensive interior remodel, adding a large detached structure for our hobbies and will have an orchard and garden in the back. We’re retired, moving here from CA and plan on being here the rest of our days.
We spent over three years looking for what we wanted in Reno/Sparks/Minden and watched the median price fall for the past few years. We passed on a number of properties because the median price was still falling rapidly. The price curve leveled off so we pulled the trigger. We spent only a portion of what we had budgeted and purchased more than we expected. It was a win win for us to live in a community better than we left in CA.
Going forward we’re looking at investment opportunities in the area, there seem to be low hanging fruits to pick.
john
New to Spanish Springs-
Welcome to the area! Glad to see that you are both happy with your purchase and plan on being here a long time. I’m pretty sure I know the area you live in. Imo one of the best areas in all of spanish springs! You have to love to huge lots as well. We look forward to hearing more from you!
MikeZ
Speaking of Spanish Springs, I see that the infamous Stucco Palace at 3225 Palacio, 89436, is up for sale. Again.
This history still makes me giggle:
06/01/2008 Listed $340,000
06/25/2008 Listed $319,000
04/14/2009 Listed $237,500
02/16/2009 Sold $229,000
Timmmmberrrr!