RSAR President-elect discusses the local housing market

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Last week Reno-Sparks Association of Realtors President-elect Kevin Sigstad discussed the local housing market on KTVN Channel 2 news.  From the KTVN piece: In order to afford the mortgage needed for a median-priced home of $150,000 it would take two people earning just $10/hour each.

The RSAR has also released its Market Reports for July.  Click on the links below to access these reports:

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I am a licensed Nevada REALTOR® living and working in Reno, Nevada. Give me a call at 775-722-4011. My team and I will be happy to assist you with your real estate needs.
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26 Responses to RSAR President-elect discusses the local housing market

  1. Martin says:

    The realtor spinjive just never stops does it?

    Yes, a two worker household making a combined $44,000 a year could “qualify” to buy the median priced $150,000 house.
    They just better hope the furance does not need to be replaced this winter or that the roof does not have a substantial failure.
    But then the difference between what people can really “afford ” as opposed to what they can “qualify” for has never been something that the realtors like to talk about.
    I’m not sure two people making a combined $160 a day before taxes should ever even consider buying a house.

  2. Michael Helton says:

    It is true that there is some good news in the Reno/Sparks RE market, but this news story was sloppy and irresponsible journalism.

    They interviewed one person with a heavy and immediate bias but did not interview someone with a different perspective, or even look at the underlying stats. Sure, homesales were up…but why? It is sobering that the majority of homes sold were not empty new homes or normal sales; they were houses being sold because some person or family was losing their hopes and dreams.

    I think now is a good time to buy in this area, but journalists should do a better job of providing perspective to their viewers.

  3. inclinejj says:

    2 people earning $10 dollars an hour and unless they want to go FHA they have to have pretty clean credit these days.

  4. Lynne B says:

    I guess you can’t expect better from someone representing realtors than a suggestion that two people each making $10 an hour go buy a house. Why should he concern himself with little details like what happens after people take on a mortgage that they can’t manage. And as we all know, $10 an hour jobs are so secure..people making that kind of money never get laid off, or get their hours cut, and I’m sure they get fully paid health insurance and have fantastic credit.

    He should take a page from the Northern California Realtors and suggest that Reno realtors get in on the scam that they are running; form a ‘property management’ company within your real estate firm, get $ from the banks for managing foreclosures, line up investors to buy them cheap, hire your cousin or brother-in-law to do a 2 day rehab of the property, then rent to section 8 people and charge the investor a “management fee” (the investor will love you cause HUD pays twice the rent that you could get on the open market) Then you sit back and watch the value of every house in the neighborhood to drop because the section 8 renter doesn’t have any skin in the game and doesn’t even own a lawnmower, so you have a virtually endless supply of houses that people either walk away from or sell for a fraction of what they paid for… Heck, it’s a better scam than the one they had going in 2004-2005 telling people not to worry about their mortgage the house would just go up in value 10% every year…

  5. Zen says:

    The president-elect of the RSAR really said that? The video feed is down, so I couldn’t view it for myself. How sad that a person in his position might actually have some influence and unfortunately will probably lead some people to financial ruin. First off, considering the cost of rent, fuel, food, and utilities alone, I highly doubt that two people making $10 an hour, if they are supporting themselves, could afford to save the down payment on a $150,000 house and save sufficient reserve funds necessary to protect their investment. The rent goes away, but now you add on a house payment, homeowners insurance, property taxes, sewer fees, trash service, and a water bill, all of which are not usually paid by a renter. Not a single piece of furniture or a yard tool has been purchased yet. Then what happens when something goes wrong? At some point things aren’t going to go as planned. The home is going to require some repair, they’ll need a new car, someone is going to loose their job, get hurt, get pregnant, get divorced, etc… Not to mention, their is a fairly good chance the the damn home will be worth less than it is today in the forceable future. Do you really think a couple making $10 per hour each can take on that kind of gamble with a $150,000 investment? This person is a professional in his field, with this kind of advice? In fact he is the president-elect of a group of professionals and is spreading this garbage? Now that is sad.

  6. Ogre says:

    The last 4 or so leaders of this orginizaion have had foeclosure activities on their properties. Check out the newby! The Lord of Leoniso.

  7. MikeZ says:

    Yes, a two worker household making a combined $44,000 a year could “qualify” to buy the median priced $150,000 house. They just better hope the furance does not need to be replaced this winter or that the roof does not have a substantial failure

    $120K at 30 yrs and 4.25% is $600/mo.
    Married couple at $44K/yr will take home approx $35K/yr.

    $7,200/yr for the mortgage is 16% of gross, 20% of net. That’s well within conservative guidelines for housing costs.

    The math behind Sigstad’s claim looks sound to me … did I make a mistake? … where exactly do you see “realtor spinjive,” Martin?

  8. Sifer says:

    Correct Ogre. I believe that the last 4 consecutive presidents of the Reno Sparks Ass. of Realtors have lost their properties to foreclosure. One of them even wrote an article about it for the RGJ.
    Take it all with a very very large grain of salt.

  9. Workorder says:

    I wonder how many of the 35,077 NODs that have been recorded since 1/1/06 have been for realtors?

  10. billddrummer says:

    @Workorder,

    An equally good question: How many of those foreclosures were for people who make $10/hour?

  11. rrb_reader says:

    $120K at 30 yrs and 4.25% is $600/mo.
    Married couple at $44K/yr will take home approx $35K/yr.

    $7,200/yr for the mortgage is 16% of gross, 20% of net. That’s well within conservative guidelines for housing costs.

    Mike Z: Leaving 80% of 35K/yr to live on is quite a bit different than 80% of 75k/yr.

  12. inclinejj says:

    49 NOD’s filed today

  13. MikeZ says:

    Mike Z: Leaving 80% of 35K/yr to live on is quite a bit different than 80% of 75k/yr.

    What’s the alternative? Pay $600+/mo for rent? Do you think they’re worse off in a house?

  14. Lynne B says:

    Mike Z said “What’s the alternative? Pay $600+/mo for rent? Do you think they’re worse off in a house?”
    Of course they are worse off in a house, for one thing their house will probably continue to depreciate at least in the next few years. On top of their mortgage payment they will have to pay property tax, insurance, sewer, water, and garbage. IMO they would be better off in a $900 rental; at least they wouldn’t be exposing themselves to as much risk -if the furnace goes out on your rental, you call the landlord, you don’t have to put a $2,000 repair on your credit card.

    In fact, given that they are only making $10 an hour they are probably extremely vulnerable to layoffs or cut backs in hours so maybe they should just buy an old motor home and live in Casino parking lots until they lose their job (which is probably inevitable)

  15. inclinejj says:

    I made $13.75 working at the supermarket back in the early 80’s

    But then again Reno was a $10 an hour town before the RE Boom Cycle. Now it is back to being a $10 dollar an hour town.

    BTW for those of you keeping track.

    39 NOD’s today!

  16. inclinejj says:

    Lynne

    If you rent you have to pay renters insurance, NV Energy, cable, phone, internet.

    If the furnace goes out the slumlord says I am in NOD do you think I am going to fix your furnace?

  17. Unifund says:

    Working at the supermarket is a skilled job compared to a lot of jobs in Reno. I think McDonalds pays $10 a hour. But nobody works full time there. So our happy homeowner hypothetical couple won’t be slinging fries.
    I agree with Lunne B. Those $10 a hour jobs come with so much job security.

  18. Sully says:

    Another thing that seems to becoming popular these days is for cash buyers to close escrow and turn around and deed the house over to the spouse. The last two I’ve seen in my neighborhood in last 3 weeks have the husband deeding house over to the wife. I realize the strategy in doing this if there is a mortgage or other debt problems but not if you own it outright.
    Does anyone know of a reason for this?

  19. rrb_reader says:

    inclinejj says:
    August 30, 2011 at 10:50 AM

    Lynne

    If you rent you have to pay renters insurance, NV Energy, cable, phone, internet.

    If the furnace goes out the slumlord says I am in NOD do you think I am going to fix your furnace?

    Based on that type of thinking, you are saying that it’s better to be 100% responsible for the bad furnace replacement than to take the chance that the lanlord won’t pay for it. Plus as far as I know, aren’t those utilities that you mentioned need to be paid whether you buy or rent?

  20. rrb_reader says:

    rrb_reader: Leaving 80% of 35K/yr to live on is quite a bit different than 80% of 75k/yr.

    MikeZ: What’s the alternative? Pay $600+/mo for rent? Do you think they’re worse off in a house?

    After giving it more thought about how the system works nowadays, I think they may be better of buying. Buy a house with little or no down payment. Don’t make any payments. Live for free for 2 years or so. Gut the house before you leave.

  21. Grillo says:

    I work with a woman who bought a house in 2007 and it was the best deal of her life. She paid zero down and even financed the closing costs. She stopped paying the mortgage in 2009. The bank has filed a NOD three times, but not yet a NOS.She is going on 2.5 years of living mortgage/rent free.
    How can you beat this? Absolutley nothing out of pocket and 2.5 years of free housing??
    MikeZ is a genius for suggesting people ought to buy. Hell, cost is nothing when you don’t need to ever pay.

  22. inclinejj says:

    43 NOD’s Today!!!

  23. inclinejj says:

    31 NOD’s today plus a crappy jobs report

    Recession part 2 coming soon

  24. Sully says:

    incline, you wouldn’t by any chance be keeping track of NOD’s would you? Didn’t think so! 🙂

  25. inclinejj says:

    What makes you think so? lol

  26. inclinejj says:

    41 NOD’s today

    the horror the horror

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