But don’t worry, your funds are safe and accessible through Mutual of Omaha according to online sources. Just another sign of the times as the domestic house of lending continues to fall. Thank goodness the system still works, for now.
Meanwhile, liquidity options for WaMu are running low, though I’m sure the government won’t let that one unravel, much.
Word on the street is that the IndyMac bailout will cost the FDIC 10% of its reserves… true or false?
Then (toward the end of the ego-fest in the UK Telegraph) Donald Trump says buy real estate now, as it’s the place to be.
Some poor woman back east committed suicide just before her house went to foreclosure. Please, if anyone is even considering this, don’t do it! It’s just money. What’s important is you, not your insurance payout.
And then there’s that mystery surrounding the Wells Fargo Earnings Report… fact or fiction?
But here’s the good news: Brian Kaiser sees a light at the end of the tunnel based on recent numbers.
And today the House passed the "Housing and Economic Recovery Act of 2008" which introduces several key programs to help homeowners refinance out of toxic loans and get first time buyers into home ownership. Overall it’s a mixed bag, but I think it will prop up the system and have some positive benefits.
Back to the topic of buy now or wait, in the lower price range stuff is really starting to move. Over at Carson City-based Creative Real Estate Online, the investor forums are totally active. They are coming into the marketplace nationwide for deals that cash flow. The contrarians are here, and they’re buying properties.
GreenNV
I haven’t worked my way through all the links, but it need to be emphasized that the 1st Heritage Bank that was taken over by the FDIC, is in NO WAY RELATED TO HERITAGE BANK OF NEVADA, http://www.heritagebanknevada.com/, who seem to be doing just fine.
MikeZ
RE: “But here’s the good news: Brian Kaiser sees a light at the end of the tunnel based on recent numbers.”
Kool-Aid! Getcha Kool-Aid here!
Light? Bottom? Not a chance.
GrayGeekNV
I find it rather alarming with all this news about the fall-out of the real estate market that my taxes are going up. I just got my tax bill from Washoe and guess what they want more money because they say my property values have increased. Can this be real or am I dreaming?
Does anyone know a good real estate attorney who specializes in tax issues?
This is insane for those of us on fixed incomes.
smarten
Welcome to America GrayGeekNV! Most people don’t realize real property taxes are a time bomb waiting to happen [well I guess you’re starting to realize]. And as local government spends more and more [employee salaries, retiree pensions and (health) benefits, COLA, etc.]; and its revenues [sales taxes, development fees, casino revenues, etc.] total less and less [because of a contracting economy or otherwise]; it will look more and more to property owners to make up the deficiency. And in addition to property taxes proper, water delivery, sewer and road systems; school, library and fire/police protection infrastructure; and nearly anything else you can think of that can arguably be connected to some public benefit; will find its way onto your property taxes in the form of general obligation bonds [“GOBs”] which are sold on wall street and repaid for >30 years by local property owners. And if Nevada follows California’s lead [which it is about to do with its version of Proposition 13], the door will be open for local government to begin imposing a new breed of “special” taxes [basically anything that is designated for specific purposes] against real property in addition to the ad valorem taxes [some % of assessed valuation] you’re already and GOBs you’ll soon be complaining about.
I hate to break the news to you but there’s virtually NOTHING you, me nor “a good real estate attorney” can do about the property tax merry-go-round homeowners are on. That is unless you bring the entire system to a grinding halt and reform taxes from the bottom up which is something society will never, never do.
So when Derrick states how stupid it is for anyone to rent a home because he’s/she’s basically throwing away rent [there’s no property tax on rents], just think how much you as a property owner are throwing away in taxes to fund the cost of local government while the value of your home depreciates.
Sully
GrayGeek – take it to the court of public opinion. Go to RGJ and post a comment in the letters to editor section.
If enough people complain about this or appeal the assessment, then the assessors office will have to act in response.
Remember this is an elective office and the assessor, assuming he wants to keep the job, will have to pacify the electors.
This was done in Santa Clara County after the bust in 1980’s and was successful in bringing down the assessments of a lot of commercial properties.
With the state in a budget crunch, property taxes are not likely to go down very much though.
nevada mls
Who was the most aggressive lender to developers in Reno? I would be very concerned about banks with a really high exposure to construction or land loans since the end user for these developers to sell to has virtually disappeared.
billddrummer
To nevada mls,
First National Bank was really aggressive, and look what happened to them!
NAS
Half way through “Chain of Blame” Paul Muolo & Mathew Padilla.
Very interesting read on this mess.
cash buyer
hi, any resolution to arrowcreek golf course? was meeting helpful? lots of houses for sale in arrowcreek, but if golf course reverts to desert, the values will come down even more. hard to buy there now.
Sully
cash buyer go to –
http://renorealestatelogic.com/
smartens good friend posted this as she is a member of arrowcreek. 🙂
GratefulD_420
The details are bad. Very bad. Joe Blow scores. responsible people will pay the bill. The bill will be much larger than any estimates.
Scenario under the new law [housing recovery act]
1.) Joe buys house for $736k in Oct ’05
2.) Joe says he can’t pay, cause he lied about income. Enters, Forclosure.
3.) Joe gets current assesment of home value. Let’s say the market’s down a modest 17% since Oct ’05. Assesment = $736 * 0.83 = $611 k
4.) The bank has to write down to 85% of value. And then issues Joe a new 30 yr fixed mortgage with the best rate (regardless of his credit history), best mortgage origination fees, etc at 90% the current appraised value.
5.) Joe’s new loan value is $611 * 0.9 = $550k
6.) Joe has $61 k in equity thanks to me & you!
FHA loans now conform at wichever is greater 115% or $271k of median home price up to $625,500. Luckily the rescue loan example above is capped to $550,440.
This is extremely good news for me. I wanted to buy a house in 2005, for around $550k…. but realized everyone was flipping crazy! So I was responsible knowing the Reno market could not support this and waited for sanity to return. Now, that sanity is begning to return… Joe gets bailed out and gets a $736k home, valued today at $611 for only $ 550 with the best terms and fees.
Of course if he sells tommorow for the $611 he has to share 50% with feds & only keeps $30k. Poor Joe, I’m so happy we could save his home.
Great law ’cause I would have hated to see Joe loose his $736k home and have to rent a home (how shameful!, just like I do) for a few years until he had 20% down payment (which is required now to get best rates(like Joe recieved)) and he could buy a house for $550. I’m so happy for Joe. How ’bout you?
MILLER
So the question then follows…
Does the “Comp” calculation now change? In my mind, Joe’s house is now worth $550K.
From a buyer standpoint, would my buyer’s agent be able to tell me all of the houses in Joe Blow’s neighborhood that fall into this situation?
No offense to the neighbors, but that comp in my mind just became $550K, and if it’s public knowledge, that’s what the new value of the house should be.
I also realize that this is a circular argument as the bank “valued” the house at $611K when they took the haircut (which begs the question of the “value” calculation and the bank trying to get as close to their original loan value as possible – will this be inflated as well?), so theoretically the comp is $611K, but if this is public record, then there’s no way I’m offering more than $550K for Joe’s house, hence the new comp…
Alright, done rambling, but great topic!
When the rubber hits the road on this one, how is it truly going to play out, and where are the loopholes that the banks will take full advantage of, and how will it truly affect the home values?
For some strange reason, I can see how some tech savy real estate agents will be able to use this information to their advantage (and mine – the buyer) when offering on any home in a neighborhood that has this situation.
Correct me if I am wrong, but wasn’t Diane’s big $100K under accepted asking offer based on a similar thought process?
-MILLER
Diane Cohn
What do you guys think of this essay? The Next Big Bailout: State, Local and Private Pensions
It’s long, but well-thought out.
Future Buyer
To Cash Buyer–Go to Ron Bells website renohomestalk.com and check out his latest posting on the Arrowcreek Golf Holdings. The letter is pretty amazing, but it is cut off. I had him forward me a copy. It doesn’t look good financially. I hope another buyer comes along, but if not soon I doubt the current shareholders are going to want to continue at that yearly financial loss. What a sad mess…
cash buyer
thank you for the link future buyer. as an outsider looking in, overall statistics look very bad, especially the vacancy numbers and their financial effect. there is no question that reno is a superb place to live, however several issues to consider are: is it wise to buy in a “ghost” neighborhood, will arrowcreek revert to desert and others follow, can the local government adjust spending to the revenues of a smaller rateable base, will small business survive etc etc. the traditional buying season is over and despite federal intervention, the foreclosure pipeline is still full and things most likely will get worse. this is tragic for families, reno and our country.
we expect to be buying, but probably wiser to wait for the uptick. thank you for all the excellent information.
Future Buyer
Cash Buyer–I completely agree. We were looking for a possible short sale or foreclosure in ArrowCreek, but now are too afraid to buy even at the lower prices we are now seeing. We will probably wait and see what happens and consider buying again next year. Glad I could help with the website and information. Being a renter is where it’s at for now…