When is a good time to buy a home in the Reno-Sparks area? is a question you might be asking yourself for quite a while now...
I was having a conversation with a client of mine last Tuesday. He's been looking for a home in Reno for the the past 3 months. Joe and I have been showing him properties that have fitted with what he was looking for in a home. One of which is a brand new home in the up and coming neighborhood in Damonte Ranch. He really likes it and told me that it is the number one in his list.
But he hasn't made an offer. Why? well, I have to tell you that this client is a very wise buyer. Even before we personally met he already asked me for some market graphs and statistics,asking questions like, " When did the market topped?" "Has the market bottomed yet? "What was the median home price at the top of the Reno Sparks real estate market?" 'What's the median price of the homes now? "
Yeah, he made sure we did work hard for his business. At first it made me think to myself, wow you're pretty demanding my friend, we haven't even met!
Now, as i look back I'm glad he did ask those questions. I would if I was in his place in this kind of market.
Going back to the new home he hasn't made an offer yet. It is a 1,840 Sq. Ft, single story, 2 car garage, 3 or 4 bedrooms and 2 baths. The price was $309,000 in December of 2006. Two weeks ago we checked the price. It is $279,000.
Can Joe and I honestly blame them for not making an offer even if he loved the house and is already priced competitively? Our hard answer would be NO. Of course he's thinking, 'hey why don't I wait a little while and wait for it come down to $200,000', actually he told me when the house goes down to $250,000 he'll be getting a pre-approval from his lender. Fair enough. I told him that I think that's a good move.
But i also cautioned him of the possible negative advantages of waiting too long to get his house.
This is our reason number 3 of 'Why Joe and I think that buying a house now may make sense for many '. The previous post listed reason number 1 and 2. (interest rates are low and home prices are cheaper)
Reason # 3: Residential building permits in Washoe County:Reno-Sparks is signifantly lower than it was a few years ago. Meaning, the builders are not building as much homes any more. They are cutting down in inventory. The deals may not be there when you wait too long.
check out this graph...
Washoe County: Reno-Sparks
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| 2nd Qtr. 2004 | 3rd Qtr. 2004 | 4th Qtr. 2004 | 1st Qtr. 2005 | 2nd Qtr. 2005 | 3rd Qtr. 2005 | 4th Qtr. 2005 | 1st Qtr. 2006 | 2nd Qtr. 2006 | 3rd Qtr. 2006 | 4th Qtr. 2006 | 1st Qtr. 2007 | 2nd Qtr. 2007 |
| Washoe County | 1291 | 1356 | 1354 | 852 | 1153 | 1723 | 1376 | 852 | 1087 | 1057 | 356 | 387 | 661 |
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Now, let me be clear. I am not suggesting that everyone should start buying new homes now 'while supplies last'. If you have honestly checked your budget/cashflow and you think it is unwise to buy a home. That is perfectly fine. Be patient and continue to save money,don't take on bad debt. Your time will come. Don't over-stretch yourself. You can wait till the market reaches its bottom . Hopefully, by that time prices will be 'friendlier' with your set budget
I am talking to those people who are already financially,emotionally ready to buy a house but is thinking, 'I want to buy a new home but I have all the time in the world to wait till it goes down further'. This is just something to think about.
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