RENO, Nev. —-The golden days of multiple offers and fast sales have returned for buyers and sellers of homes in the low-priced end of the market.
Homes selling for around $100,000 and below are among the hottest-selling residential properties in the Reno-Sparks area.
In early December there were 897 homes in the $100,000-and-below price range listed for sale in the Truckee Meadows, says Sherrie Cartinella, president of Reno-Sparks Association of Realtors and broker/saleswoman with Coldwell Banker Select Real Estate in Reno.
Nearly 60 percent of those residences — 528 homes — are currently under contract. And in many cases, homes selling for under $100,000 are receiving multiple offers.
“That has been the trend for the last several months,” Cartinella says. “We are seeing that within our office, and I have made offers on several different homes priced under $100,000.”
Cartinella points to the example of a young couple that recently bought a home off Robb Drive as an example of the forces driving the Reno-Sparks resale market.
“Their payment was $863 a month with everything included,” Cartinella says. “The same floor plan three doors down was renting for $1,200. Why wouldn’t you buy? When you can purchase for less than you can rent for, it is an amazing time. That hasn’t happened in my lifetime.”
The nearly 900 homes on the market priced at $100,000 or below account for the lion’s share of the available inventory in the region.
By way of comparison, 403 homes are listed around the Reno-Sparks area’s median price of roughly $150,000, and 738 homes in the market are listed in the $100,000 to $200,000 price range, Cartinella says.
The median sales price in the Reno-Sparks market has hovered around $150,000 for several months.
Many of the homes selling for well under that median average are in older parts of Reno and Sparks, or in outlying communities such as Stead, Golden Valley, North Valleys. Lot size is a major factor for homes in lower price ranges, Cartinella says.
The brisk sales activity is due to a combination of low interest rates and low sales prices that have helped buyers formerly priced out of the market become homeowners.
“Agents are pricing properties to sell,” Cartinella says. “It is so affordable, and with interest rates staying down that is really a big help, particularly to first-time homebuyers.
“A lot of buyers out there are scurrying a bit to take advantage of the prices and the interest rates — the low interest rate makes a big difference on what they can qualify for and their payments.”
Dave Hilbig, broker and team leader for the Keller Williams Group One office in Sparks, says affordability has continued to increase as prices declined.
“The rate of decline has slowed, but affordability has gone up for buyers that were priced out of the market and remained priced out,” Hilbig says. “Now the affordability is such that new buyers that can qualify for FHA loans and buyers that previously couldn’t buy are back in the market.”
Along with former apartment and home renters, another segment of buyers of lower-priced residential properties include investors who purchase the homes out of foreclosure on the courthouse steps. These buyers hope to turn a profit after investing in improvements to the property, such as new paint, carpets or roofing, and placing the home back on the market, Hilbig says.
“We have investors that have purchased homes in that way in Washoe, Churchill, Lyon and Douglas counties,” Hilbig says. “They believe there is a margin there. If the investor is savvy, they will find homes that are capable of being placed back on the market and make a profit for themselves.”
Distressed properties still account for between 60 to 70 percent of all sales, and that is probably true to an even greater extent for homes in the $100,000 range, Hilbig adds.
The same story is playing out in smaller northern Nevada communities, where severe price reductions and a glut of inventory have reduced the median sales price to well under $100,000.
The median sales price in October for a home in Fernley was $82,100, down 17 percent from the same month in 2010. In Dayton, newly constructed homes are selling for under the $100,000 threshold, says Heidi McFadden, president-elect of the Sierra Nevada Association of Realtors and Realtor/office manager with Realty Executives Nevada’s Choice in Carson City.
Last week there were 56 active listings in the Dayton area for homes under $100,000, with an additional 30 homes in escrow, McFadden says. Dayton, which, like Fernley, was among the hardest-hit communities when the economic downturn took hold across northern Nevada, has again become a popular place for first-time homebuyers.
“Now is definitely a good time to buy — there are plenty of homes on the market, and so many are great for first-time homebuyers. There are a lot of new builds in Dayton, and with interest rates the way they are it is good time to buy.”
Carson City is seeing its fair share of activity on lower-end residential real estate, but many of those homebuyers are investors snapping up homes to use as rental properties or to flip for a quick profit, McFadden says.
As of Dec. 8 there were 42 active listings for residential properties under $100,000 in Carson City, with an additional 39 homes in escrow. Many of the homes with offers had been on the market for less than two months, McFadden says. Investors, she adds, are much more interested in purchasing properties near the heart of Carson City than in outlying communities.
“It just makes a lot of sense right now for them to be buying; it pencils out. They can buy homes for under $100,000, and in some cases they do not have to do too much to it and can either turn it around or rent it out for $700 to $1,000 a month.”