According to Countrywide, America’s Wholesale Lender, the Reno-Sparks market is a category 5 risk along with other familiar locales, such as Las Vegas, Stockton, Modesto, Riverside, Phoenix, Sarasota and Miami. As with tornadoes, 5 is about as bad as it gets. Even Sacramento ranked better at 4. Our reward for this dubious ranking? At least an automatic reduction of 5% in terms of lending limits from Countrywide, and who knows what else. Thanks to Perry for passing this along…
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MikeZ
Is there additional explanation available?
For example, what makes Reno category 5 and what does that mean to Reno funding and expected volume and prices in 2008?
The document itself does not contain either.
SkrapGuy
Countrywide and other lenders rate housing markets all over the country in terms of anticipated future price deterioration. In those markets it deems to be at greatest risk for price declines, it reduces the amount of money it will loan to people seeking to buy in those markets. Countrywide rates the Reno housing market as being in the riskiest category for future price declines. Once Countrywide qualifies a borrower for a loan amount employing its regular underwriting standards, (ahh yes the days of the fog up a mirror loans are gone)it will reduce the amount it is actually willing to lend that borrower by 5% to protect itself from anticipated price declines. Countrywide expects houses in the Reno market to decline at a rate eqivalent to the depreciation it expects in such markets as Miami, Sarasota, and Phoenix. Those three markets, and a couple of others, vie for the designation as Ground Zero for the housing bubble.
The Reno housing market hits bottom in 2008? That continues to be laughable.
Sean
I have noticed more and more houses that go pending come back to active in 2-3 weeks. I bet this has to do with the new lending standards. People making offers and not being qualified.
Diane, is this what happened to your 950k listing in the galena area?