Wednesday, July 11, 2007

What in the wide, wide world of real estate is going on around here?

What in the wide, wide world of real estate is going on around here? How is the market?

The market is still feeling its way along with surprises on a regular basis. Some segments are seeing no activity while others are active, but dropping in value. Buyers and Sellers are trying to determine the reality of their position with influences from National media, real estate agents, and general talk around town. Nobody wants to make a mistake which is causing some to simply not act – a market dynamic in itself.

A look at MLS statistics for the area shows sales year-to-date are about one-third of what they were in 2005. Average sales prices for the same time are off 20%. Our real estate market is comprised of many segments throughout the Valley each which must be specifically analyzed to have an accurate understanding of that market, however these generalized numbers will serve our purpose here. Values are down – undeniably – in some areas more than others. Some areas have actually dropped 20% since April alone! You can see market trends for your neighborhood if you go to, put in your address, and look at the chart. We don’t recommend using their values without the interpretation of an agent, but the trend lines on the chart will illustrate what we are saying. If you are going to sell you must be priced right and ahead of the market as it adjusts. Knowing of its brisk decline if you are in such a neighborhood will enable you to be priced right sooner so you will sell before you have to drop it even further.

If you are in a market segment that has had little, or no, activity since the first of the year, i.e.- homes in the seven figure range, you have a different dilemma. How do you determine market value when there is no market? This was evidenced in a dramatic fashion in Elko County in the 1980’s when there were no sales of ranches for a few years. A Buyer with a bundle of cash wanted to buy several ranches and the lender wanted to make the loan. The appraiser used a trend line to predict what the value might be if the sales continued as they were. The loans funded and escrows closed. When the next sale happened it was below the last sale used to establish the trend. Notwithstanding the high sales of the properties using an “estimated” value, the values had in fact decreased and were less than half the “estimated” value. The “estimated” Buyer lost every ranch to foreclosure. Our situation is not as dire with wonderful residential properties, but the circumstances are familiar. What does one offer? You can use replacement cost with consideration of the hassle factor. You can determine what a specific property means to you and your circumstances and offer accordingly. You can simply take a run at it, professional jargon. What we do know is that you won’t enjoy it if you don’t own it.

Our Advice: Buyers should make their offer. You might buy a property at a price you are comfortable with, or at least you’ll know if the Seller of the property is willing to negotiate to a price acceptable to you. With interest rates still relatively low, prices low, and our “Chamber” attraction items still intact, it is a good time to buy. If you are Selling – decide if you really want/need to sell right now. This is not a market to “see if we can get our price”. If you don’t need to sell now … don’t. Wait for the anticipated recovery. If you are “upside down” in your property, owe more than its value, don’t list high with low hopes – talk to a true real estate professional with short sale skills about how you can get out intact financially and emotionally healthy.

Don’t get paralyzed by the market dynamics. Things can change daily. Talk to your agent with candor and you will be able to make the right real estate move for your circumstance.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates,, 775-781-5472.

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