The U.S. Treasury is thinking about intervening
directly in the mortgage markets to
get rates down to 4.5 percent in an effort to
boost residential sales.
On the other hand new lending restrictions
by other federal agencies are expected
to dampen home sales in northern Nevada in
2009. Realtors say, however, it's too early to
determine how stricter lending requirements
from the Federal Housing Administration,
Fannie Mae and Freddie Mac will play out.
Stephen Haley, broker/salesman for Keller
Williams Group One, Inc., says beginning this
month the FHA lowered its maximum loan
amount to $325,000 and raised its down payment
requirement from 3 to 3.5 percent. The
possible net effect of those new guidelines,
Haley says, is that fewer mid-range homes
will be sold, and some first-time homebuyers
will need to wait longer as they save for a
higher down payment.
"From 3 to 3.5 percent doesn't sound very
significant, but with some first-time buyers
that can equate to $1,000 or $1,500 dollars,"
Haley says."It may take them out of the
game, and they may have to buy a lowerpriced
house."
In addition, says Rick Lund, broker/president
of Ferrari-Lund Real Estate, Fannie Mae
and Freddie Mac no longer will
underwrite home loans for people
holding four personal loans,
such as a personal residence
and three rentals, which is locking
investors out of the market
at a time when home values are
at their lowest in years.
"That is what is affecting
the market more than anything,"
Lund says."It is almost
impossible for investors to get
into the market right now. By
tightening guidelines, they have
definitely choked out a lot of
investors.
"We don't have all the tools
we started with in 2008, so it
will be interesting to see how
2009 goes," he adds.
Still, homes have been selling
throughout the Truckee
Meadows, especially those in the
lower price ranges. In many
cases, Realtors say they are fielding
multiple offers on entry-level homes.
Keller Williams' Haley says Realtors in Reno
sold more houses in 2008 than in 2007 by
a mere 200 units or so but the median
price dropped 18 to 19 percent.
"We are definitely reaching a point in values
on the low end of the market,"Haley says.
"We are back at 2003 prices, and I don't know
of any other product you can buy at yesterday's
price."
Wayne Capurro, president of the Reno-
Sparks Association of Realtors during 2008,
says continued price declines increase the
number of buyers who can quality for a home
loan.
On the other hand, he says the number of
foreclosed properties overhanging the market
raise the possibility of further price declines.
"The existing home market has a deep
hole yet to climb out of," Capurro says.
Haley says interest rates will determine if
values will continue to decline in 2009. Lower
interest rates will spur competition and
increase demand, which will keep values
from falling further, especially on entry-level
homes.
"I think we have reached some stability
on the low end, but the upper- and midpriced
homes still have some range left," he
says.
Haley notes that buyers in the $300,000 to
$600,000 range have been the most reluctant,
and with the new FHA requirements they will
have to get conventional loans from a bank or
mortgage lender.
"Those guidelines are little more strict
than FHA guidelines,"Haley says."You are
going to have to be conscious of debt, credit
worthiness and value."
Lund says that despite new lending
requirements, it's still a great time to buy a
home.
"The market for this year appears to be
another great buyers'market," he says.
"Between lower interest rates and lower-priced
homes, there are some great opportunities."
Opportunities abound in the greater
Carson City area, but Jim Wilson,
broker/owner of Century 21 Jim Wilson
Realty, says Carson City-based Realtors are in
for a long winter.
Home values in Carson City have plummeted
as much as 30 to 35 percent, he says.
Home sales in Dayton have dropped as much
as 40 percent, while homes in Minden and
Gardnerville are down about 25 percent.
Listings in Dayton may sit for six months or
more, he says, while the average listing in
Carson City is roughly 150 days.
"People are really shopping," he says.
"There are some good buys out there, but
people aren't convinced yet."
