Pulte seems to be getting serious about selling through their local inventory. They’ve slashed prices, thrown in huge incentives, joined the MLS and are now courting the local Realtor community with 4% commissions and additional selling bonuses. (So, if any of you want to buy in Del Webb, please call me… things are a little slow right now, and the kids need to eat. 😉
Will any of this make buyers like Wazzup feel more comfortable about actually purchasing? Maybe if Pulte threw in some kind of insurance policy to make up the difference if prices fall further, so that today’s buyer doesn’t lose no matter what they have to do to move this inventory… maybe then nervous buyers would feel more comfortable with an actual purchase today, knowing that they couldn’t lose for the next three years or so.
Yes, I know, this is pie-in-the-sky thinking, but I think it’s a much more powerful incentive than a brand new Hummer, discount mortgages, or a trip to wherever. Thoughts?
Wazzup
Very interesting… I will email you directly.
Waz
gotlots
The Pulte “up to $99,900” incentive linked in your post only applies to certain of Pulte’s developments across the country. Pulte is dying on the vine in many of its east coast and southern markets. Are you sure it applies here in Reno?
The notion of an “insurance policy” against falling prices is interesting. How would this work? If Wazz buys at Sierra Canyon for $400,000 today, and Pulte starts selling the same house for $350,000 in 8 months, does Pulte write Wazz a check for $50,000??
Even if so, Wazz still has to pay insurance and real property taxes based on $400,000, no?
And what about the lender? Would not such a payback to Wazz amount in effect to a cashback outside of escrow, violating federal laws?
Wazz is wise, very wise, to be reluctant to buy now. Sooner or later, the developers are going to have to break on prices. People can figure out that the so-called “free Hummer” is hardly free. It is nothing more than the opportunity to finance a Hummer for 30 years. Sooner or later, the developers will have to move thier ever mounting inventory. They will do it with outright price reductions, not illegal cashback arrangements.
NVlawyer
I was reading your market report and noticed that you stated, “land is scarce and long term appreciation potential is significant.” I think you know that is an intentional misrepresentation.
Washoe county consists of 6,342 square miles all of which can be annexxed pursuant to Nevada Revised Statutes 268.670. for example, have you not paid attention to the articles in the newspaper about the proposed annexation of 140,000 acres north of Reno? Do you know how many houses fit on 140,000 acres?
Simply put, there is an infinite amount of land in Reno, Sparks and the surrounding areas. You realtors, especially you California transplants realtors, who obvioulsy do not pay attention to local matters, have done a good job of misinforming the rest of the california transplants.
Reno realtors have made their bed and now it is time to LIE in it. I will venture a guess that by the summer of 2007 there will be less than half of the 3,600 realtors in Reno still working as realtors.
Wazzup
Interesting, but I agree with gotlots, let’s see some pullback on the prices. We visited Del Webb Shadow Hills in Indio this weekend. Found a model we liked, many upgrades are standards at Shadow Hills. Here’s the difference, the salesperson showed us three inventory homes of the model we liked, took $40K off the pricesheet price and offered $20K allowance on financing. That’s getting closer to what we’re looking for, a real pullback on the price, excluding Hummer!
Diane Cohn
NVlawyer, what I meant by the “land is scarce” bit is that buildable land with water rights is a limited resource here in the desert. And yes, I have been reading the local news regarding annexation. But are these plans realistic? Where will the water come from? And at what cost? That aside, it is not my intent to misrepresent anything, so I took the land comment out. I still believe, however, that this is a great place for long term appreciation. That’s just my opinion.
rkybarl
“In the long term, we will all be dead.”
John Maynard Keynes
NVLawyer
You are techinically correct, it is a scarcity of water not land. However, if you pay attention to local issues, Reno does not have a water problem. We have an enormous fresh water lake just up the hill and a river that runs right through the middle of town that delivers that water to us. There is also Stampede and Boca Lake, both of which are viable water resources.
The real problem is that Reno does not have enough water treatment plants. Reno has enough water to support a much, much larger population, they just need to build the water treatment plants. (Contact the Truckee Meadows Water Authority if you don’t beleive me)
And, yes the annexation plans are very feasible. Growth and water have and always will be an issue in Reno. To date my self, I remember when there were no houses west or north of Mcarran off of Seventh Street or Kings Row and no such thing as spanish springs. People use to say 20 years ago there is no more water so we have to stop building, we have to stop the growth. But look at the growth in less than 20 years.
Reno will not in our lifetimes (or our childrens) run out of land or water.
JMurrayent
NVLawyer, when is the last time you went to buy a building lot? Just because we have Lake Tahoe, Boca and Stampede (reservoirs, not lakes) doesn’t mean people have the right to use the water out of them. Have you noticed the price of water rights jump from $3500 an acre foot to $50,000 or more in the past 2 years? As a building contractor, I know that buildable land is getting scarce, largely due the cost of water. If water rights are acquired and treatment plants built, the costs will be transfered the the cost the property.
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