Or more of the same? I’m trying to figure it out. Flashback to President’s Day weekend. That Friday I get five calls in one day from people interested in Reno real estate (that’s a lot). Two are exploratory calls looking to purchase later this year. Three are coming up this weekend and want to see stuff. The calendar quickly fills.
I take one set of buyers out to Cold Springs to see newer homes in the outer reaches of civilization. Last Fall the builder had so many homes to move that he actually listed them on the MLS and offered a nice commission. Now, they’re all gone, and they won’t be paying us anything after Phase 13. Okay, so the party’s over. These are entry level homes in the high twos and low threes… definitely the best value in town. My buyers end up looking at mostly resales, and there are plenty to choose from. But the new stuff is selling again. I wonder, is Cold Springs a leading indicator?
The following week, more buyer calls and another full weekend. I take some investors out to Stead to see newer homes there. Again, a good value in the low threes. But there’s a ton of them, and I get a lot of anxious follow-up calls from listing agents afterwards wondering what my buyers thought of each (and frankly, I saw thirty homes… I can’t remember half of them).
Meanwhile, that week in the paper, the Saturday Homes section is still thick with builder ads, and Centex has one of their Saturday-only sales, where you can get $10K-$50K off the price, one day only, and whoa… your Realtor can get a 4% commission for bringing you in. (That’s a far cry from the 0% they usually pay.)
Then I have lunch with one of the top producers in town. He’s been a Realtor in Reno for 25 years, and in all his years of business, he hasn’t seen anything like the conditions we’re now facing. I make some pithy remark: "Oh, I don’t think prices are going to go down that much." But he shakes his head in disagreement. He’s already called three of his title people. They say numbers are down from last year. He carries a lot of listings. His calls are way down. He sees a lot of new building activity, a lot of resale inventory, and boils it down to economics. Supply and demand. I don’t think he’s ever seen so much supply. The question is, will it be absorbed?
One of my particularly astute clients clues me into the lack of model home visitors and huge number of sales taking place in Sacramento right now. Builders offering huge discounts, upgrade concessions, and, wow, actual commissions to Realtors. It sounds like a blood bath. Is it coming our way? This same client gets a cold call from Del Webb in Somersett, talking about all the great stuff they’ll get if they buy now (but they still want their $100K lot premium). So he says, no thanks.
So what is going on with this market? It’s still in flux. Office calls are down, but internet activity is up. My title officer says that things were dead between Christmas and early February, but now things are picking up. My lenders tell me that calls are up. Soon I’ll be looking at February data and will have more concrete info.
For now? I still think it’s a great time to buy, a tough time to sell. Lots of inventory from which to choose, if you’re a buyer, and lots to compete with, if you’re a seller.
