August Odds and Ends

WooHoo – Dickson has taken over the Somersett Welcome Center sales office, and Somersett Development Company sheds more staff.  The HOA is already getting huffy about a commercial use in "their" building.  The Village Center retail and office complex was scheduled for a Trustee’s Sale yesterday, but I don’t know if it got postponed again or went through.  More later.

There is action at our favorite formerly $1.5M log cabin at 2615 Erminia.  Back at the original $633K listing price, a party did a thorough due diligence run and made a $430K offer, which the bank rejected.   Asking price has steadily decreased to its current $460,900.  There has been a new offer submitted that appears to be in lender limbo or again rejected (dog walkers get all the scoops!).  I think the offer is overly rich, and the bank would be foolish not to accept it.  Again, more later.

Interesting action at the Montage – they listed 4 units on the MLS this week, which means a realtor (and commissions) are involved for the first time – search for 255 N Sierra.  You list to gain exposure, which makes me wonder if the waiting list of cash buyers the Montage was touting has run out after the first release.  Everything is still all cash (thanks, JoAnn).  A group named RJR Properties has picked up 8 units and is leasing them out.  An informal interest list of people looking to lease Montage units has extemporaneously formed at the front desk and is over 125 parties long.  Maybe Starwood/FDIC should start looking at the leasing option as the highest and best use of our bailout tax dollars?

The most annoying listing on the MLS is slowly dying.  720 Hill in Verdi has shown up in at least 30 incarnations over the couple of years it has been marketed.  The property FINALLY went TD this week, but the listing still won’t totally go away. 

If you are interested in the Siena Hotel Spa Casino, REreno has started a series about the property, its history, the parties involved, the bankruptcy proceedings, and the family feud behind the whole situation.  I’ve seem some of what REreno has in their arsenal, like the list of Siena creditors that includes  just about every vendor in Reno.  Seriously, it is 434 pages long.  This will be a good one to follow.

www.mayberrycanyon.com.  I cringe at even publicizing it to the hordes here, but I could use your comments to help make the site better and keep Dyson in gourmet kibble a while longer.  Paying you to take the properties off my hands is off the table (at this point).  I’m targeting the one-sy builder/developer and trying to give them enough data to get intrigued.  Big ass signs will go up on site next week.  What should I do to intrigue them?

Enough for tonight.  Any thing else you are seeing that is blob-worthy?

Update:  Thanks to Tom Daly for pointing out the "frankly scary" Wall Street Journal article naming Reno as the worst market in the US for conservitive housing investment.  Any thoughts?

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About Mike McGonagle

An architect, business owner, and compulsive public records hacker, Mike reads the tea leaves of the local real estate market from a unique perspective.. A former Chicagoan, Mike earned his MArch from Harvard University. Mike can be reached at mike@macassociates.com or 775-345-7435. His continued musings can be found on the REreno.com blog.
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18 Responses to August Odds and Ends

  1. Avatar KB says:

    I have seen about 8 units in the montage available for rent on craigslist. The prices are only ok. If there is a built up demand list why are they on craigslist?

  2. Avatar Smarten's Vanishing Equity says:

    “I could use your comments to help make the site better and keep Dyson in gourmet kibble a while longer. Paying you to take the properties off my hands is off the table (at this point). I’m targeting the one-Say builder/developer and trying to give them enough data to get intrigued. Big ass signs will go up on site next week. What should I do to intrigue them?”

    …is equal to:

    “I have a ’75 Ford Pinto I’d like to sell for $50,000. Any ideas on how I can make this happen?”

    ITPS = It’s the price, stupid.

  3. Avatar Tom Daly says:

    As a serious out of state shopper I read your blog almost every day and sincerely appreciate the insights it offers. Thank you.

    Since you have solicited blog-worthy information I refer you to this weekend’s edition of the Wall Street Journal, page B9. It refers to the Reno real estate market specifically as “frankly dangerous” for investors.

    I watch and wait.

  4. Avatar Joe says:

    Dangerous? Don’t they know that we’ve had a ‘stable’ median for the last 14 months; How can they ignore this?

  5. Avatar Tom Daly says:

    Bear in mind that the WSJ article is addressed to investors rather than owner / occupiers.

    It ranks the ten worst U.S. cities as #1- Reno, followed by Vegas, two in Arizona, and six in Florida.

    I’m sitting in Metro Detroit which is exponentially worse than Reno. I presume that areas like this are not listed because any investment here is out of the question. Reno looks real good to me.

  6. Avatar MikeZ says:

    RE: WSJ article

    Very interesting (thanks for sharing).

    A North Carolina real estate firm has concluded that the best real estate market in the USA is in … North Carolina (Durham).

    And 3 more of the top 10 in the state or just over the border? Am I the only one who noticed that?

    Also, neither Local Market Monitor nor Ingo Winzer nor the WSJ provided any references to the data, methodology or metrics for the study, simply the rankings.

    Finally, the claim that prices in Reno are “still tumbling” is simply not seen in the home price data that gets posted here every month.

  7. Avatar Reno Ignoramus says:

    Ok, Mike, since you asked.

    Instead of putting up a big ass sales sign, put up a big ass plyboard square and paint it white. Paint “For Sale” on the square. Then paint in big black numbers the current asking price of $142K.

    In a week, if you have no offer, paint a red line through the $142K and paint $140K.

    In a week, if you have no offer, paint a red line through the $140K and paint $138K.

    In a week, if you have no offer, paint a red line through the $138K and paint $136K.

    In a week, if you have no offer, paint a red line through the $136K and paint $134K.

    Repeat weekly until you get an offer.

    Eventually, you will get an offer. And instead of screwing around with realtors and appraisals and market analysis, and MLS trends, and all the other nonsense, the market will let you know what somebody is willing to pay for it.

    Or you can continue to psychoanalyze the market, like you have been doing for the last year or more, and a year from today you can put up another post about how hard it is to sell raw land these days.

  8. Avatar smarten says:

    Now here you have RI’s post, which in substance is every bit as negative as were many of Mr. BB’s, but the difference here is that RI is making a point without attacking or degrading Mike. RI’s post is respectful yet pointed, whereas Mr. BB’s posts repeatedly were not.

    With that said, RI’s marketing recommendation reminds me of another sales “technique” I recently saw employed here in Incline. The agent is Ina Haupt of Premier Properties who touts herself as a maverick. Ina has a local listing which has been on the market for some time. So she recently reduced her seller’s asking price, and then ran an advertisement about it in our local newspaper. Her ad read “Only 29 Days.” In the ad she touted what a great value her listing was, and that there had been a recent price drop making it an even greater value. Then Ina stuck this “29 Days” prominently in the ad and touted that her listing would only be “available” for 29 more days. According to her not for a penny more nor less than the asking price [so much for price negotiation], and if her listing had not gone into contract within the next 29 days, it would be withdrawn from the market [our loss]. My initial reaction, just for giggles, was to wait for 32 days and then submit an offer [for less than her client’s asking price of course] just to see what would happen.

    The reason for my recounting the 29 Days is that the ad was different, just as would be RI’s suggestion. Unique advertising for unique times.

  9. Avatar Raymond says:

    That’s an interesting suggestion, RI. The only problem with it, it seems to me, is that it will require Mike to abandon all denial and rationalization about what this property is worth. It will require him to come to terms with reality. Most sellers don’t like to do that.

  10. Avatar Sully says:

    Mayberry drive, I see there are 3 lots for sale for 399K. Isn’t that a record, as I remember 300K was high during bubble peak?

  11. Avatar bob_c says:

    what happened to somersett golf course??

    i cant see any viable solution (that doesnt involve more red ink) with the glut of
    golf courses in the reno area

    and there isn’t even a club house

    any info?????? thank you

  12. Avatar Mike McGonagle says:

    Sully, back in the boom, all the properties on Zoe (south of Mayberry Landing), these 3 flag lots along with the house at 4040 Mayberry, and a couple other parcels bridging all the way to Juniper Hill Road were being assembled for a large project. Think 6000 SF lots! When that fell apart, the Mayberry guy went ahead with the 4 lot split, had to annex into Reno to get sewer, and spent a fortune getting services put in. I think the lots were originally $459K. The house and what became the 3 lots was purchased for $1.8M in 2/2005, so the developer is gonna take a licking.

  13. Avatar Sully says:

    A tad off subject but:

    Earlier this month, Harry Mortenson, D-Las Vegas, submitted a bill draft request for the 2011 Legislative session for a resolution that asserts while the preferred pronunciation of the state’s name is “Ne-VAD-a,” pronouncing it “Ne-VAH-da” is also acceptable.

    I guess they got the deficit figured out and have nothing better to do than make up things. Fortunately this legislator is termed out and will not be in office when the bill comes up for vote. Do they really think we NEED full time legislators?

  14. Avatar cheez o says:

    Somersett: I heard the “owners” handed it back to the Homeowners with a check attached and said “have a nice day.” When the $$$ runs out is anyone’s guess.

    The “country club” is going to be a pup tent with a couple of orange crates.

  15. Avatar longerwalk says:

    I grew up with the concept that a ‘clubhouse’ was nothing more than a place to shed one’s wet raingear after walking while carrying the clubs. Might be a pot of coffee on the old stove in the corner. Somehow, I have little sympathy for the country club lifestyle . . . it’s expensive to have more than a modestly maintained course! Never buy a pig in a poke.

  16. Avatar tallguy says:

    Mike,

    As a fellow Verdian who also watches housing in Verdi pretty closely, why so many houses for sale on Erminia these days? Are all your neighbors moving away? Guessing you live over there.. Just curious.

    Another good Verdi tale is the Blue Heron Circle house.. bought and sold as a fixer-upper, only 100 feet from the highway. Long thought that seller would be taking a huge bath, and was surprised at the price when they originally bought. Seems like the wildcard in many of the Verdi for sales these days is proximity to 80.. How many people want to put up with the freeway noise, and what effect do you think that has on pricing??

  17. Avatar bob_c says:

    didnt somersett plan a ______thousand square foot
    clubhouse for its members

    wow, what a mess

    all golf courses have a pro shop/ club house

    this place just has the golf course

    if made public—–it would need a building (pro
    shop)—–no one is going to spend more money on a course that is already a loser

    i see no good outcome…..except gift it to the city and let them build a pro shop——–but they
    might say no

    about the emotional side of being underwater—a waitress told me that somersett folks were the tightest, most irritable customers—and understandable—being broke sucks

    the emotional toll might be greater than the financial toll…thats why its so easy to walk
    away (my 2 cents)

  18. Avatar Mike McGonagle says:

    tallguy, how’s the food at Sasquatch Grill? Haven’t tried it out yet.

    The Erminia situation is a fluke. First house may be a divorce, but no other financial stress. Second is the log McMansion – what can I add? Third is widow looking to downsize and relocate, but no financial strain on the house. Look for house 4 in the near future – it keeps having its Trustee’s Sale postponed and was a classic bubble buy. Plus, 2 other defaults going on on the lower bench.

    Actually, 2 houses in play on Blue Heron on 80.
    first one is the one I think you were talking about, and is still sitting unfinished after a partial remodel but at least $50K in fences and utility work. Was always going to be a loser. Number two is the last house on the street with a panoramic 80 view. They got the NOD a few months ago. They did a preliminary lot split, but couldn’t did up a buyer.

    Freeway noise is just a fact of life out here in the valley / canyon, unless you start getting up toward Dog Valley. So are train horns. They certainly aren’t helping housing value, but I don’t think noise is specifically tanking values adjacent to the transportation corridors.

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