My Reno Real Estate reality…

No one in my family is a good dog trainer.  In fact, we are terrible at it.  We have a 10 year old lab that is pretty much perfect but that’s because he trained himself.  A few months ago my youngest daughter brought brought home a chihuahua puppy.  Until yesterday he refused to go on a leash and we were hopeless failures in attempts to teach him this skill (or any others actually).  I’m not sure what changed but yesterday he let us hook up the leash and he enthusiastically joined in the walk as if he had been doing it for months.  I believe in miracles and this, I believe, was a small miracle.

Speaking of small miracles…that is what some in my industry are saying it will take to get the distressed properties in our area moving again.  If you aren’t in the real estate business or currently involved in buying or selling a home, you may not have noticed that our Reno/Sparks market has changed overnight.  Our inventory is much lower than it has been in years.  We currently have around 3 or 4 months inventory on the market compared to about 11 months a year ago and much more before that.  Low interest rates and even lower prices have stimulated buyer demand and the supply is dwindling.  Due to AB284, which went into effect October 1st, 2011,  our inventory is projected to dwindle even more as this year progresses.

AB 284 put requirements on lienholders seeking to foreclose on properties that, so far, has stopped most of the larger lenders in their tracks.  Supposedly they are working with the State Attorney General to comply with the new law so they can once again start the foreclosure process against folks who are defaulting on their loans.  I’ve checked with a local title company that does a large percentage of the pre-foreclosure title work for banks and they are still not seeing anything come through.  They usually do this type of title work about 2 to 3 months before a bank files a Notice of Default.  Once a Notice of Default is recorded it then takes around 4 to 6 months for the bank to complete the foreclosure action.  So, for now, those unable to pay their mortgage are flying below the radar…at least for the foreseeable future.  This is a good time to attempt a short sale, modification or look at other options that aren’t as easy when the foreclosure clock is ticking.

This is, for some, a window of opportunity which will not last forever.  It may take a small miracle, but someday, the banks will figure out a way to comply with the law and will proceed.  When they do it will probably happen suddenly and seem like they had been doing it all along.

Yesterday I attended a Celebration of Life for my ex-boss, Scott Fritz.  We met at The Galena Lodge and crowded around the bar to remember Scott who was killed in a skiing accident at Northstar last week.  Scott was a great guy to work for and a friend, as well.  It was sad to say goodbye and to know how hard this must be for his wife and family. At the same time, this occasion turned into a big reunion, of sorts, for a bunch of us who worked together at Centex Homes during the boom. As everyone knows, the boom has long since busted, the company (once a top builder in the country) is no-more and the employees have been scattered like dust in the wind. 

A group of us started talking about the crazy days of the boom when builders were throwing money around like confetti.  We were treated to ski trips, trips to Hawaii, and annual trips to Las Vegas.  We would be put up in places like The Bellagio and Wynn. No expense was spared with accomodations, banquets, parties, and entertainment.  In the middle of the reminiscing and commenting on how much has changed, someone blurted out, “WHAT HAPPENED!”  What happened indeed! Most of the sales people who worked there have moved on to re-sale and have had to transform themselves from being order takers with hundreds of people on waiting lists and big paychecks coming in to resale real estate agents slaving through short sales, foreclosures, making a lot less money for a lot more work.

My response to what happened is that we are now paying for the obscene excesses during the boom.  What went on in our industry WAS obscene.  Fraudulent lending practices, buyers who were lying about living in a house so they could buy it and flip it for a quick buck, builders who were raising prices every week while decreasing the quality of the product they were delivering… I could go on and on but it all comes down to greed. 

It’s only been seven years since I left that company and tight-knit group of co-workers but it may as well be a lifetime. Things are certainly different now but I don’t think it’s a bad thing.  There is more honesty in the marketplace for one thing and people who have embraced the change as an opportunity to be better are surviving and thriving.

Thomas Edison once said, “Opportunity is missed by most people because it is dressed in overalls and looks like work.”  I love that!

At the game.

Today my daughter went to the UNR Women’s Basketball game and they won.  Winning isn’t everything but it can be pretty sweet especially when it hasn’t happened for awhile.  The smiles on the players faces and the high-fives passed around by the coaches don’t lie.  Winning feels pretty good.

I had that winning feeling while giving a presentation to my networking group yesterday. Its nice to feel like there are some winners in the real estate business after a few years of feeling frustration and loss with so many situations.  I pulled an old presentation from a year ago off the shelf thinking I would dust it off and update for this presentation. I shouldn’t have been so surprised but was totally blown away by the differences between now and a year ago.  The first part of the presentation showed a search for a hypothetical client and what they could by for about $175,000 in our area for a certain sized home in certain school areas.  Last year that hypothetical buyer would have had 45 homes to look at and this year only 13.  Additionally, that buyer was getting more home for the money this year based on home size, lower prices and lower interest rates.  That is something that should never happen at the same time and emphasizes just how big of a win buying in this market it!

The other presentation has to do with what I would call the new move-up buyer.  In years past a move up buyer would simply (and quickly) sell the smaller home, take the equity from it and buy an bigger home.  Those days are virtually gone with most people in our area in negative-equity positions on their current homes.  With the help of Vince Lotito at Prime Lending, I have been able to structure 3 deals recently in which we were able to help people move up without having to sell the upside down home.  In 2 of the situations the clients were about $100,000 upside down on their current homes and able to buy bigger homes.  The main rule is that it has to make sense to the lender.  They have to have income to cover both house payments and a legitimate reason for getting another house.  Things like having kids and growing out of the old house and needing to be closer to work.  After they move they rent out the first house.  One of the clients ended up with lower housepayments on the new home which was twice the size as the old one and closer to work and town.  I would call this a big win for someone wanting to move up!

Dave Liniger, founder of RE/MAX, posted his annual RE/MAX  Top 10 Housing Predictions via YouTube.  It’s definitely worth the watch, as this man is one of the biggest movers and shakers in the real estate world and knows what he is talking about.  The bottom line is that 2012 is supposed to be better for real estate than 2011 was.  That being said, it is important to remember that all real estate is local and for those of us in Nevada the recovery is something we are still waiting for.  Our state was, and still is, one of the hardest hit in the real estate realm.  Some of the recent legislative changes in our state have seriously stalled the flow of foreclosures coming on the market and things could get interesting as demand for homes picks up and supply dwindles…at least temporarily.

One area that the demand will likely come from is the 18-30 year old crowd.  Liniger said that in a normal market about 5 million of them are living with their parents.  In our current market there are 29 million living under that arrangement.  He commented that they aren’t particularly happy about it and neither are their parents.  This made me smile in light of some of the conversations I’ve had with friends in that situation lately.  With the low prices, record low interest rates, and low down-payment programs available, buying a first home is a fairly achievable goal for a young adult.  If you know a student who has some savings or even access to a down-payment gift, there are some things they can do to position themselves to buy.  Basically, they need to be 18, and have a couple of lines of credit for 2 years and can even qualify with a part-time job if they make enough and have 2 years job history.  The opportunities will be out there for a while.

2011 was a year full of challenges for those of us who call Reno, Nevada “home”.  We made the national news way too many times this year and I’ve heard many comments on how 2012 cannot come soon enough.  However, this is a really great place to live for so many reasons.

The following You Tube video “Why I Love Reno” was passed on to me by Drew Rolley from Jet Plumbing, Heating and Air.  The video was produced by local commercial broker, Tim Ruffin of Colliers for use in drawing companies and clients to our area.  I have given a similar review of Reno to friends and clients myself and have concluded, as did Tim in the video, that the best thing about Reno (and there are a lot of “things” to choose from) are the people.

Happy New Year to all!

http://www.youtube.com/watch?v=HQoCG5tN3dU

Yesterday I had my turn to speak at my business networking group, BNI Noon Networkers.  I get a chance to speak every few months and as I was preparing for this turn it came to me that I have been incredibly blessed with phenomenal people in my life.  Not just personally, but professionally.  They are really the ones who make me good at what I do.  So, instead of speaking about my own credentials I decided to talk about the team of people I work with on a regular basis.

There are others, for sure, but these are the ones who I talk to weekly, if not daily.  First is Vince Lotito who is the branch manager at Prime Lending.  I’ve worked with many lenders in my 24 years but he is the BEST.  We have a great working relationship based on trust and teamwork.  He has gone the extra mile on many occasions.

Ticor Title is top-shelf in this town for Title and Escrow.  They also have a great reputation and aren’t in the business of doing some of the more questionable practices that have surfaced in the past few years.  I’ve worked with several escrow agents there but my shout-out goes to Alice Escalante.  She’s the one I have on speed dial and she is a great “team-member” whenever I have a question about something…even if it’s not a transacation she’s working in.  She is great with clients under stressful situations and is a genious when it comes to working out the numbers and troubleshooting things like short sales.

There are a few good home inspectors in this town and I’ve worked with many of them.  Tony Nannini, owner of Armstrong Inspections, is one of my favorite people.  Not only is he a master inspector and well-respected in his association, but he is incredibly caring.  I’ve seen him exhibit a great deal of patience with people (who don’t always deserve it) and has gone over and above the call of duty on many occassions to explain issues before and after the sale.

Last, but certainly not least,  I had to mention my family and friends who encourage me everyday as I work through the ever changing Reno real estate market.  So, in the spirit of Thanksgiving,  I am grateful to you all.  You know who you are!

I recently led Grace Church’s annual women’s retreat.  One of the activities we did that weekend was a sort of team building exercise led by Coach Jane Albright.  This activity turned out to be a retreat favorite.  Partly because Jane can make just about anything fun and partly because of the way these ladies participated.

The assignment was to build and decorate a paper house with your team.  Each team divided its members into designers and builders.  The designers had to come up with plans following a specific list of criteria and the builders had to put it together and decorate it with magazine clippings.  There were a couple of catches, of course.  First, it had to be done in a limited amount of time and second, the designers could only use one hand each.  The process erupted into chaos and laughter as each team executed their project.

I’ll be the first to admit that my team came up with the most pathetic house in the room.  Pretty embarrasing for a group that included a professional faux painter and myself with 20+ years in the real estate and home building industry (not to mention some other pretty capable ladies).

Each house was presented by a representative from it’s group.  They were to be judged on a few different categories: Did they follow the required specifications?  Did the builders actually accomplish what the designers instructed?  Did it have good asthetic quality, etc… This is where the competition became very interesting to me.

The first group had incorporated a cross and a picture of Jane’s dog, etc…into their house to have an emotional appeal.  One of the other groups had come up with a beautifully constructed home.  But, the winner really went for the heart.  They created Jane’s parent’s home and a flood of childhood memories.  It won.

This demonstrated something that is very true when it comes to selling people homes.  Buyers want a certain size, a certain price, a certain location, etc… but that’s not really how they pick a home to buy.  It’s got to appeal to their emotions.  Does it “feel” like home.  Can they see their kids and their dogs living there?  Are there flowers up the driveway; a wreath on the door; cookies in the oven; friendly neighbors?   Something about the house will need to trigger emotion or the sell will not happen.  Period.

I’ve had writers block for a couple of weeks.  I’ve had lots of great material for my blog but everytime I go to write something about the real estate business it just hasn’t seemed that important in light of everything else going on around me.

Then the crash at the Reno Air Races happened on Friday which really got me to thinking about what’s important.  I’m guessing that the people impacted by this tragedy really don’t care about how much value their home has lost in the last few years.  I bet they aren’t thinking about the latest bale-out plan proposed by the government. 

I cannot pretend to know what they are going through but I suppose they have a new appreciation for how fragile and precious life is.  Every relationship they have with family, friends and God probably just took on immeasurably greater meaning for them. 

Selling homes is what I do for a living but it doesn’t really matter at the end of the road how good I am at ; that I found someone the perfect house; that I helped someone get out of an upside-down distressed situation; that I solved all of the problems so we could close, etc… What matters are the relationships that happen as a result of working with people and getting to know each other.   Like they say, “it’s not what you know, it’s who you know.”