Jim Valentine: Update from the trenches
We are in the middle of a global pandemic with interest rates so low they are practically paying borrowers to take the money and the market is booming. Despite having to practice social distancing by meeting buyers at the home in separate cars, wearing masks to enter homes, and being limited as to what we can touch in the home, houses are jumping off the proverbial rack.
Most of the market seems to be California refugees escaping as quickly as they can. We find it interesting how many are coming up in RVs and camping rather than getting a hotel room. Our showings are based around their timing of finding an open space in an RV park to stay at. Most of the local parks are booked until fall causing them to stay further out of town when they come.
We are seeing many buying now for the short term future, i.e., two to three years. That phenomenon was prevalent in the market surge of 2003-05. People who are close to retirement want to make sure they can go where they want to when they retire, Northern Nevada. They are buying now for that eventuality. They don’t all have cash reserves, and aren’t selling their primary residence yet, so they are hitting their 401(k) accounts, or getting loans, another trait from the 2003-05 surge. The good news for economic stability is that the stated income (also known as “liar’s loans”) loans are now non-existent as are the 125% loan to value loans.
The buyer surge we are experiencing is not only for homes to live in, but California investors are getting their investment properties sold and are bringing those funds to Nevada to reinvest via the 1031 Exchange process. We are seeing many exchanges occurring these days meaning there are cash buyers in the market competing with the typical home buyer. It makes it challenging for the user home buyer to compete, but it can and is done when your agent is diligent, expeditious and writes a quick clean offer for you.
Coordinate a plan with your agent and be ready to roll up your sleeves to help them get you the right home in this dynamic market. We searched three markets for some customers the other day and found 15 in each. Of the 45 listings only one was not pending, under offer. That caused us to regroup and rethink our approach. The new approach allows our buyers to compete where the original plan would have them chasing the market for years. We developed the plan together so we are all on board with the approach we are taking.
We’ve noticed some of our industry partners are getting stretched thin. Lenders in particular are being hard hit as they have many refinances to complete as well as purchases. The indicator on that is when they keep “losing” or “not receiving” your documentation you send them. When they ask you for the same thing three times they are usually buying time. One lender recently promised they would close late, and they honored that promise. There was no reason to as the borrower was diligent in sending everything in within hours of the request, but they were so overrun with loans but wouldn’t tell us and accepted the application. In the end they funded the loan before the loan docs were signed. That is unheard of and certainly our agent readers are reading this in disbelief. It really happened this week. Amazing, but an indicator of how hectic things are.
Like everywhere else in your life, you have to play the hand you are dealt. If you are buying now you are buying in a frenzied but solid market. Deal with it. Understand how you fit into the market, what the market can offer you and make a plan with your agent so you can buy with your needs met and some of your wants satisfied. You won’t have to compromise if you are clear in the difference between wants and needs.
These are the good ole days! Somebody is going to buy the home you want, it might as well be you. Take this understanding and make it work for you.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781- 704. firstname.lastname@example.org