The home front

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."