December 31, 2007
Sales of existing homes continue to be a mixed bag in the Truckee Meadows as 2008 dawns, says Nancy Fennell, president of Dickson Realty.
“What happens in Montreux is different than in Wingfield Springs,” Fennell says. “It is micro markets.”
Sales of luxury homes costing a million dollars or more have been fairly consistent whether at Lake Tahoe or down in the valley, she adds.
The real challenge lies in selling the $500,000-and-below markets, where sellers of existing homes face strong competition from new homes that are priced competitively. Fennell says new home builders in the market continue to liquidate their inventories and sold more houses in 2007 than they did in 2006.
“That is what has put a lot of pressure on existing home sales there has been lot of new home construction very competitively priced,” she says.
Kyle Krch opened a small real estate office on Pyramid Way in Sparks in December of 2005. Using a flat-fee business model, Krch’s small staff of three salaried agents has recorded about 100 transactions each of the past two years.
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The subprime mortgage crisis and rising number of foreclosures fueled much of the small company’s recent growth growth. “We are doing better now than we ever have due to unfortunate circumstance of so many people having to sell their homes,” Krch says.
Krch Realty continues to record more short sales buyers selling homes purchased in the past year or two that quickly depreciated in value than any other transaction. Krch expects new home prices to remain low through the first quarter of 2008, which doesn’t help sales of existing homes.
“New homebuilders, with their incentives, it’s hard for resellers to compete,” he says. “People are really bringing their prices down so they can sell quickly. Hopefully by the third quarter of next year we will see a nice easy increase in prices, 1 to 3 percent.”
The median price of a home sale in Washoe County hovered near $295,000 in December, says Amy Lessinger, broker and owner of the RE/MAX Realty Affiliates office in Reno. In 2005 the median resale price was $350,000.
“Resale also has had a significant adjustment,” Lessinger says. “It couldn’t be a better time for buyers. They have lots of choices and low interest rates. Many sellers are willing to offer incentives also.”
Lessinger says big builders are looking to hold land in the coming year rather than create more inventories of homes to be sold. That will remove some of the pressure on pricing of existing homes.
“Most of the heaving lifting with adjustments already has been done,” she says.
Dickson Realty’s Fennell says the status of the new housing and resale markets is a short-term issue.
“At worst we will be flat in 2008,” she says. “It’s an election year; it’s hard to see us go into much of a slide.”