Do you know the Toscano project on Dickerson?  It is riverfront property right across from Idlewild Park.  Funky architecture with a high level of finishes, a developer’s personal statement.  I toured a couple of the units a few years ago when they were listed around $500,000 as a Suzie McQuaid’s Deal of the Week.  There is something pretty cool about having your deck overhang the Truckee.

The last 3 developer units went back to the bank this week for about $233K each.  What do you do if you bought into a complex with comp units that are now  going in foreclosure?  You list ASAP before the foreclosed units hit the MLS, and hope no one reads this blog!  2030 Dickerson just listed to $414,500 (with Suzie again).   It was bought in March 05 for $296,564, a pretty sweet deal at the time.  Tic, tic, tic until the banks price their units at $200K.  (OOPs, just checked the MLS for a link, and has been withdrawn already).

Hey Montage!  Arlington Tower strikes back!  Penthouse 23N at 100 N. Arlington just listed for $1,250,000.  The unit is 1504 SF with a 550 SF deck overlooking the city.  Purchased in 1996 for $230,000 and completely remodeled in 2003.  Parking not included.   That works out to a whopping $831 / SF.  Comments on the photography are welcome.

I thought it might be a typo when 193 Smithridge Park listed today for $167,000.  Surely they meant $67,000, right?  The majority of the units listed in the complex are now in the $60-80,000 range, and a low of $49,900.  612 listed two weeks ago at a 2005 flashback price of $205,000.  "The Kool-Aid is strong in this one, Obi-Wan."

Commercial Lender forwarded me this Mortgage Report from T2 Partners.  Analysis of current default trends and predictions for the future.  It is a 75 page document, but incorporates a lot of the charts and graphs you have seen elsewhere into one document.  There is a lot of information to look at, and some of the data even surprised me.  Read it, and let’s hear your comments.  My impression is that it will make even the beariest bears get ready for hibernation.  A big thank-you goes out to Commercial Lender for this contribution.

The Nevada Department of Business and Industry has developed a great tool for homeowners who may be underwater in their home.  It’s called the Nevada Foreclosure Information Workbook, and it’s intended to educate homeowners on the foreclosure process.  It is very thorough and provides answers to practically any question you may have regarding a foreclosure situation.  This 44-page workbook also contains worksheets, contact lists, checklists and a log.  If you are facing a potential foreclosure situation I believe you will find this workbook very useful.  Click here.

After last week’s Federal Housing Administration’s announcement amending its policy so that first-time home buyers may now fund their home purchases with the $8,000 tax credit I immediately began receiving “Alert” and “Breaking News” emails from various lenders touting the news.  One lender however provided more details surrounding how this new policy will actually work.  I thought I’d pass it along to the readers of the blog.
[Note: by request, I am not posting this lender’s name.]

For first time home buyers, the last couple of weeks have been filled with confusing information regarding the 8,000.00 tax credit. Last Thursday, FHA announced a change in policy that allowed lenders to explore the possibility of creating short term bridge loans based on the anticipated tax credit. The key here is that the lenders have to be willing and able to create these bridge loans. It is still unclear as to how this is going to play out as there has been no announcement from any lender indicating that this type of financing is going to be available. If the procedures are finalized, FHA has put a cap on the fees that the lender can charge for this "2nd loan" at 2.5% of the anticipated credit. In the case of an 8,000.00 credit this means that the fees charged cannot exceed 200.00 so the borrower would net 7,800.00 as a tax credit.

Secondly, and more importantly, the tax credit cannot be used to replace the required 3.5% down payment but rather can be used to put more money down on the house, pay discount point to lower the interest rate, or can be used to cover closing costs. Since our market conditions currently support closing costs to generally be paid for by the seller it makes the uses of this program rather restrictive. In the case of needing assistance for a down payment the NV first time home buyers program maybe a better alternative with the rate now down to 6.2% compared to the open market rate on an FHA which has increased to 5.5% over the past week.

Feel free to keep Hating Diane, but I wanted to post the month end foreclosure numbers in front of Guy’s May sales data, and tell you about the Riverwalk auction.

Trustee’s Deeds ended up at 210 in May, only up a bit from April’s 191.  TDs have been basically flat or down for the last 6 months or so.  The story is completely different for NOSs.  They rose to 639 from April’s 498, a 28% increase in one month, 25% over the old record set in March.  I observed a much greater number of HOA liens moving into the NOS category.  NODs topped out at 950 gross (includes HOA filings), another new record.   I don’t see any positive news in the data - sorry, I’d like to.

So on to the Riverwalk condo auction.  It was pretty comical all week, with JP King parking their mobile billboard for the auction in front of the Montage sales office.  A couple of meter maids are eating at Fin / Fish tonight for their oversights!

I went to the auction, with about 120 of my closest friends.  It started out with a big surprise – a 6^th unit was now going to be sold for at absolute auction.

The way the auction worked, the absolute units were bid on as a block.  The winning bidder then got to choose which unit they wanted, the process repeated for the remaining absolute units.  The winner could bay as many units as they wanted at that price, but all chose to select just one.  The first bidder got to select any of the “good” units that originally had a hidden reserve price, and bid $225,000 and took unit 1106 for $145/SF  (1547 SF, 2/2.5).  The second absolute unit went for $155,000 and took #610 for $99/SF.  Third went for $105,000 and took #702 for $68/SF.  Fourth, fifth and sixth absolute units all went for $70,000 and took #412, #304 and #1606.  412 went for $45/SF. 304 for $90/SF. And the mini penthouse 1606 for $161/sf. 

Then bidding opened on the reserved price units.  Same format – high bidder got his pick of units.  Bidding topped out at $190,000 and selected penthouse 1604.  This seemed to be well below the secret reserve price, but “we’ll take it up with the owners” was the comment from the gray shirts (auctioneer’s helpers).  The crowd then got a chance to equal that bid and select other units with no guarantees that the owner would approve the sales, and no one stepped forward.  So the auction was halted, except for “negotiations”.  

Then they unilaterally canceled the auction for the Retail space and the development parcels.  But the friendly helpers would be around with buyers who might want to submit a bid.   I think that there was just no interest.  The retail portion is a mess, with the second floor being almost unusable due to low ceiling heights.  I am surprised that they didn’t at least float the vacant development parcel, but I guess their read that it was too grim to even open it up and establish a baseline.  A bad day for downtown development.

OK, prices are actually 10% higher when you add in the buyer’s premium, But Jeez, what a train wreck.  The first bidder watched his purchase decline 15% in an HOUR (he bought at 225, penthouse topped out at 190, and no bids for the properties in the middle).

So you buy #412, a 2 story 1543 SF 2 bedroom, 2.5 bath townhouse unit for $70K.  I am wary that you would be able to cash flow this unit.  Any thoughts?

Reno Ignoramus is strange, old friend. Though I’ve never met him, seen him, or even know his real name, as my second commentor ever on this blog (behind Gotlots who mysteriously disappeared) he has this uncanny ability to interpret my actions or in-actions with remarkable prescience. Not so long ago he noted in some comment that I’d lost interest in this blog.

Ouch… but dead-on accurate. Why? Because I personally don’t think residential real estate in the US is worth looking at as an investment until 2013-2014. Sure, there are exceptions, but I’d guess I’m more bearish than even Bantering Bear himself.

If there’s one thing this blog has taught me that I’m absolutely most grateful for, is the ability to recognize the voice of truth. I have learned to give critics and contrarians a fair shake, digesting what they say in all seriousness. Because often, even if their opinions go against conventional lemming wisdom, when you take an objective look at a message supported by facts that make sense, it can be truth.

Data is data, and facts are facts. If accurately tracked without bias, we’re talking laws of nature that don’t lie. And the interpretive conversation about what these objective events mean make us all smarter about how to best prepare for a potentially tumultuous future.

So many people want to believe whatever it is they hold dear, despite ramifications, because it’s easier and less painful in the near term to shoehorn crappy news through existing mental framework aka defensive happy-filters that  make them feel better. "No problem, it’ll all work out because [insert personal savior or government entity] is looking out for my best interests, and I will receive the [insert favorite entitlement benefits prescribed by ideological belief system] that I deserve."

The world is what it is. Accept or deny it, the universe doesn’t care. Those who recognize reality and take appropriate actions are those that prosper. Those who don’t fall by the wayside.

I am in a short sale taking my licks. When we bought this house we could afford it, but now the tide has seriously turned. We will pay penalties for whatever happens, which is okay because, tritely, that’s life. Time to put ego aside, stop pointing fingers, embrace reality and move on.

The meek shall inherit the Earth? Not so different from Darwin’s message that those who adapt, survive.

You Are Here.

This classic SW residence just went back to the bank for about $1,471,000 (a guess based on the transfer tax - the full document hasn’t posted yet).  It was purchased in April 1998 for $1,750,000.  The first transactions I can trace are a HELOC for $300,000 in December 2001  that was bumped up to $400,000 in February 2002 (was there really a lender called Major Mortgage?).   There was a refi in March 2002 for $1,625,000.  The next refi was in August 2006 for $1,500,000 (110% Option ARM) with a $210,000 HELOC.

In April 2008, the owner’s closely held company sold a lot next to their plant for $525,000.  On August 26 2008, the owner bought 2286 Hedge wood for $740,000 with 20% down.  Six days later, no joke - less than a week, the first payment was missed on the Mount Rose property

I am losing my patience with the lenders who are not pursuing legal remedies against these sort of transactions.  Dudes, I’m a amateur blogger with 20 minutes of time on my hands for research, and can put the picture together - why can’t the lenders with their staff of CPAs?   Lenders need to act on the fraudulent loans in their portfolio before I will have any sympathy for their plight.

502-421-06 is your starting point.  Make sure to use the "additional owners" search option on the Assessor’s site.  Try out  the new option to search by owner’s name for all their properties.  Maybe even cross reference the RSAA membership list if you are so inclined.

This is probably the biggest little empire I know of that hasn’t cracked yet.

2250 Blue Heron made a brief appearance here a couple of years ago the last time it was on the market.  The listing agent described it as a $125,000 house and a $300,000 lot to justify the $425,000 price.  I thought that was a bit rude, but it evidently worked - it sold in July 2007 for $400,000.  The house is a  very basic 1296 SF 3/2 built in 1972 on a bit over an acre zoned for horses.  It backs up to the east bound Boomtown Garson I-80 on ramp.

The new owners started a renovation.  Windows were pulled out and boarded up.  It looks like all the underground utility hook-ups had to be replaced, and maybe the septic system, too.  A new fence was built around the entire property.  The chimney was removed.  The house has gone through two winters in questionably buttoned up condition.

What’s it worth today?  My take is:

 $400,000 purchase price

-$160,000 (40% median reduction per Guy’s figures)

-$50,000 (2 acre feet of water now available separately)

-$50,000 (reduced value due to demo)

+$10,000 (50% of fence cost)

+$20,000 (50% value of site work)

+$30,000 (value of stored windows/doors/counters + completed work)

Estimated Value - $200,000

There is a comp 3 doors up the street.  2400 Blue Heron is larger house, on a better lot, with mature landscaping.  It sold for $550,00 in November 2005, then for $301,152 out of foreclosure in December 2008, with all water rights intact.

If you didn’t click through to the listing, 2250 is asking $505,000.  Up over 20% over the last 2 years.  The owner is drinking something a lot stronger than Kool-Aid.  Many owners are out there.  They are probably just testing the market before they explore foreclosure and short sale options.  But why would any real estate professional accept this listing knowing the chance of a sale is less than zero?  It is financial suicide, unless they do not plan to spend any time or money marketing the property.   And exactly how professional would that be?  What’s the angle?

What other suicide listings do you see out there?  What business model makes agents accept these dead-end assignments?

If you lead a kind and moral life, you just may be rewarded and guided to your very own Montreux Chalet.    I really can’t comment on 6300 Fleur Court.   It was purchased in July 2002 for $758,471, and has been improved with an $80,000 home theater system, pool and spa, and a water feature you could probably kayak down.  The current list price of $980,000 is probably about what the owner has invested in the home.  The first mortgage of $500,000 is still in place, and there hasn’t been any HELOC activity.  What do you Montreux watchers think?

I have a sneaking suspicion that in the autumn of my years, God will show to me a double wide in Sun Valley.

I had the opportunity to attend the launch of the Better Building Company and the raising of a new Mariah Power Windspire at the Altmann residence here in Reno.  The Altmann Residence is an innovative, exceptionally contemporary and sustainable green home of the highest quality with the goal to use 100% green building materials for major components of the house.  This is where the Mariah Power Windspire comes in.  This wind turbine gives you the power to create clean energy from the natural wind just outside your door.   To find out more about the Windspire go to www.mariahpower.com.

Fred Altman’s 20+year tenure in Northern Nevada began when he built the first home in Caughlin Ranch then on to Montreux, ArrowCreek and Lahontan.  Being the great innovator that he is and a believer in sustainable solutions before it became a common household word, the Better Building Company, a one-stop solution center for energy efficiency and sustainable construction was born.  Better Building Company performs energy audits, retrofit work, and green building in addition to installing renewable energy solutions including the Mariah Power Windspire.  If you are interested in energy efficiency for your home, reducing monthly utility bills, improving your home’s livability, installing renewable energy solutions, remodeling or building a new energy efficient home check out www.betterbuildingcompany.com.