I received an email today announcing that the Northern Nevada Builders Association had decided to cancel the 2008 Parade of Homes. Personally, given the state of the high-end market, I think it’s a wise choice: "After careful consideration, the Sales & Marketing Council (SMC) for the Builders Association of Northern Nevada has reluctantly decided to cancel the 2008 Parade of Homes and People’s Choice Awards competition. Given the precipitous drop in new home construction and the challenging business climate in which our builders, subcontractors, suppliers and associate members are being forced to deal with, it was felt that cancellation of the Parade until Spring 2009 was the most responsible choice for BANN and its members at this time."

Reno Ignoramus sent a great article about the Fannie-Freddie bailouts and what they mean to us.

Incline Jim sent a nice NY Times piece suggesting that the fall of IndyMac is just the beginning.

Anyone remember the movie Airplane?
Looks like I picked the wrong week to quit Reno…

Credit markets are still a mess, they aren’t showing much sign of improvement, and the Fed seems to be running out of cards. Noah Rosenblatt over at Urban Digs analyzes the current state of affairs on Wall Street. If I seem to be obsessing on the global credit situation, forgive me, but it can’t be ignored as it all affects the ability for buyers to borrow money to buy homes here and elsewhere.

The RGJ was a little glum yesterday, I’d say, when they ran that piece about the housing slump persisting. But two things caught my eye. One was near the bottom when Bernard Baumohl of the Economic Outlook Group declared that "the worst of the hemorrhaging is behind us" which might be possible on a national scale, but I’m not convinced that holds here where we had such a dramatic run-up. The other thing I noticed is that Mark Vitner of Wachovia called the bottom of the market for late this year or early next year, which is awfully close to Smarten’s January 11, 2009 birthday bottom prediction. (Still hoping he’s wrong so that we can cash in on that free dinner at the Lone Eagle Grill…. mmmm, love that place!)

Today the RGJ seemed a little more upbeat with the news that foreclosure filings had dropped by 10% in June, which is of course, positive. (Though Mike McGonagle scooped that news right here on the blog a few days ago.) But is it seasonal, tied to spring homebuying patterns? A dead cat bounce before the Alt-A onslaught looming on the horizon? Or with notice of defaults down, are we seriously working through the foreclosure problem here in Washoe County?

Bloomberg doesn’t seem to think the worst is over yet, but I’m sure some will simply blast them as being the negative media. Still, a million foreclosures is tough to ignore and something our markets will have to deal with.

BTW, did anyone notice that ad on page 6D the paper ran back on July 3? The one with the list of 68 properties destined to go to auction due non-payment of Reno Special Assessments? Just eyeballing the list, I’d say about half were in Somersett, though the online list is much shorter, so I guess owners are finding ways to pony up the cash necessary to bring their accounts current. I’m sure the list will shorten as the day of reckoning approaches. The sale is scheduled for 1:30 pm on Tuesday, July 15 at the Reno City Hall Council Chambers, 1 East First Street, and starting bids are low. I wonder how this works. Do the banks show up to bid on these properties to retain title, or do people just buy them for whatever price, the city transfers title, and that’s the end of it? Or do buyers end up with clouded titles that require a lengthy, expensive process to clear?

On another note, be sure to check out our cool new Zillow mortgage widget right below the Zestimate box (scroll down, middle column). It’s a quick and easy way to get a quote without being hassled by salespeople who eat their young. Enjoy!

Here are the results for the recent Somersett auction. The initial party and kickoff drew approximately twenty people. As of the cut off time of July 1 they had received only one sealed bid. After speaking with the agent he said he would do it again and felt the interest he received was worth it. Basically all properties that were on the auction block are still available. Is this a another sign of our continued downward market?

Last week the Telegraph UK ran an article about the Royal Bank of Scotland’s recent red-alert to investors on the state of global credit. They are predicting a full-scale stock and credit meltdown as central banks worldwide are paralyzed by inflation. I know to some this may sound extreme, but the article make some good points, and the comment stream that follows is pretty insightful. I’m curious to know what you guys think about the current state of affairs. (And yes, you can talk about oil.)

Noah Rosenblatt over at Urban Digs, who watches Wall Street like a hawk on behalf of Manhattan real estate, is also seeing signs of deterioration.

Even ritzy Aspen, Colorado, has begun to feel the pain (minus the $36 million sale to the Russian oil tycoon, of course).

The State of the Nation’s Housing Market 2008, courtesy of the Joint Center for Housing Studies at Harvard University. The summary in a recent California Association of Realtors newsletter, courtesy of my good buddy Jeff Brown, summarizes as follows: 

"HOUSING DOWNTURN SLOW TO REVERSE, BUT DEMAND EXPECTED TO CLIMB OVER NEXT DECADE. Record numbers of foreclosures, coupled with tighter lending practices, will make it more difficult for the country to recover from the current housing slowdown, but immigration growth is expected to create a demand for more homes over the next decade, according to a new study released Monday by the Joint Center for Housing Studies at Harvard University."

American Express says late payments on credit cards are on the rise (thanks, RI).

Tomorrow Chase International is hosting its annual Lakefront and Luxury Estates Tour from 10 am - 5 pm. This is a big event up at the lake, attracting media from throughout the west coast, where you can see some gorgeous homes rarely opened to the public. Guy, JoAnn and I invite you to take a few hours off and come join the fun if you have time. I’ll be stationed in a fabulous Crystal Bay lakefront condo until about 2 pm if you want to stop by and say hello. Download the invitation.

So the buzz around the water cooler this morning was the lead article in this morning’s RGJ.  Apparently, in a new report issued by Global Insight/National City, Reno-area home values have now declined to point where they are now just below what the report considers absolute fair value.

The report determines “fair value” based on typical house prices, interest rates, household incomes, population densities and historical prices over the last 25 years.  The RGJ article also contained a chart showing how Reno’s downward median sales price curve has now met the “Statistical normal value” curve for homes in the area.

According to the report, the value of Reno-Sparks area homes for the first quarter of the past four years has been…(see table below)

[As a follow-up to yesterday’s post regarding the announcement of the new FHA, Fannie Mae and Freddie Mac loan limits, I’m posting an email I received this morning from Lisa Fleck, a Senior Mortgage Planner at Indymac Bank.]

As expected Fannie and Freddie have announced the new GSE loan limits.  This program, limited to the time period between 7/1/2008 and 12/31/2008, has affected about 250 counties across the nation.  In the state of Nevada the only county impacted by this change is Douglas County with their new conforming loan limit increased to $468,750.  The conforming loan limit of $417,000 remains the same for the rest of the state.

Of course a majority of the counties in CA have been impacted with many capping out at a new conforming loan limit of $729,750.  But don’t get too excited as Fannie and Freddie are not able to lump these new “higher loans” in with the regular conforming product as investors on Wall St are balking.  Expect to see rates for the higher loan limits to be 1-2% higher that existing conforming rates.  This begs the question, since a jumbo loan (over $417K) right now prices about 1 to 1.5% higher than conforming, where is the value?

As mention in yesterday’s email I believe the truer value is in the increase in the FHA lending limit, in the case of Washoe county $403,750.  Bond programs have yet to announce their decision on loan amount increases and I am awaiting confirmation that the new FHA limits will apply to Reverse Mortgages as well.

Please stay tuned for important market updates in this volatile and shifting market.

If you know of anyone else who may be interested in receiving this information as well please let me know.

I am always available to answer any questions that you may have.

Have a great day

Lisa Fleck, C.M.P.S.
Senior Mortgage Planner
Indymac bank Retail Lending Group
5470 Kietzke Ln  Suite 210
Reno, NV  89511
775.332.1434 phone (direct)
866-481-0540 fax
lisa.fleck@imb.com
www.thefleckgroup.net

Today the new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development.

Here’s a link to HUD’s site for finding the new conforming loan limits for a specific area.  Washoe County’s is now $403,750 for a single family home and Carson City is now at $398,750.  These are an increase over the previous FHA loan limit of $367,750.

Furthermore, my lender friends tell me that FHA is not what it was years ago as there is no longer a special required appraisal and the seller only has to pay the 75.00 tax service fee.  Congress is still exploring the option of reducing the required 3% down to 1½% and mortgage insurance is only .5% per month.

If you have some spare time today at lunch, you may want to call in to Zillow.com’s first-ever conference call regarding recent housing price trends and projections.  The conference call is scheduled for today, Tuesday, February 12, at 11PM PST / 2PM EST.  Go to the Zillow Blog for the phone number and instructions.  You can even download accompanying slides.

Extra credit: Give us a report on what was said during the call. 

As if Reno didn’t have enough to worry about, now God hates us.  According to the Westboro Baptist Cult, based out of Topeka, Kansas, “…the curse of God [is] upon Reno…God hates Reno, Nevada.”  One can only wonder what impact this will have of property values around here.

Since these characters seem to have a direct line to God, I’m thinking of asking them to find out what housing markets God doesn’t hate.  Could be a buying opportunity there.