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John Graham's Blog

By John Graham | Broker in Reno, NV
  • New Homes vs Existing Homes

    Posted Under: Market Conditions in Reno, Home Buying in Reno, Property Q&A in Reno  |  April 6, 2013 5:23 AM  |  289 views  |  2 comments
    New Construction vs. Older Homes in Today’s Market

    New Construction New Construction vs. Older Homes in Todays Market

    Due to the shortage of resale real estate inventory in the Reno/Sparks market many people are considering the purchase of a new home. Much like the resale inventory, the new home inventory is also in short supply with some builders having wait lists.

    We are happy to provide advice to you regarding the best way to purchase a new home. We can be reached at www.RenoRealEstateByGraham.com. You can contact Helen Graham or John Graham.

    When deciding to buy a home, one question you may ask yourself is whether you want new construction or an older home. Are you one of those people who love the new paint smell? Or are you looking for a home with “charm” that’s close to everything?

    Every home you see will have its pros and cons. Choosing what’s important to you and creating a checklist of “must haves” will help you decide. For instance, is it more important to have a larger home with a more modern layout or a shorter commute? Or, is your dream having a home in a more established neighborhood?

    Here are some pros and cons that hopefully will help you decide what type of property you’re interested in.

    The Pros and Cons of New Construction

    PROS

    • Layout. Newer construction is usually done with modern families in mind. For instance, most have a family room adjacent to a spacious kitchen in order to accommodate the need of having one large room where families can spend time together.
    • Amenities. Some newer developments have amenities such as a pool and a gym. This is nice since you don’t have to worry about driving to your closest health and fitness facility.
    • Fewer Repairs. Because it’s newer construction, you typically have fewer repairs to do, especially the larger ones like a roof repair or a new furnace.
    • More Energy-Efficient. Since new homes include new, energy-efficient appliances, new windows, and insulation, among other things, your home will stay warmer during the winter and cooler during summer.
    • Warranties. With new construction comes new appliances, new equipment and their warranties. Some builders also have extended warranties on their newly built homes, which can give a buyer peace of mind, especially first-time home buyers.

    CONS

    • Higher Price. Typically, all these modern layouts and conveniences come with a higher price. However, if you compare a new construction with an older home in a city, you may find that the cost per square foot is less for a new home.
    • Potential HOA fees. Since newer neighborhoods tend to have amenities such as pools and gyms, you may have to pay Homeowner’s Association fees to maintain these. On the other hand, having HOA fees may also help keep the neighborhood looking good and therefore help raise your home’s value.
    • Typically less charm. Builders obviously want to increase their profit margin. One way to do it is by limiting the number of floor plans they offer. This means that a newly constructed neighborhood may look like a “cookie-cutter” one, meaning that a lot of the newer homes look the same. Also, unless you choose certain updates, it may not have the detailed work that you see in older homes.
    • May have longer commute to work and schools. Again, since builders want to save as much money as possible, they may choose to buy land outside of a city. If they offer new construction inside a city, this may translate into a higher price.
    • Limited or no negotiating room. Your timing is very important, if you approach a builder at the right time (e.g. at the end of their fiscal year), then you may be able to negotiate price. However, most of the time, builders don’t allow for negotiating room when selling a home. You may be able to negotiate certain upgrades, but the price most likely won’t change.

    The Pros and Cons of Resale Homes

    PROS

    • More styles to choose from. Even though there are some older neighborhoods that have homes that look very similar, established neighborhoods have many different floor plans and, therefore, have less of that “cookie cutter” look.
    • Typically have lower prices. Since older homes tend to need a little TLC, or some updates (or maybe even some major repairs), you may be able to get a lower price for the house to entice buyers.
    • Established neighborhoods. One of the nice things about choosing a home for resale is the fact that it would be in a more established area, with a stronger community feeling.
    • If home was maintained, many repairs have already been made. Some may argue that resale homes are money pits, but others may feel some peace of mind knowing that the house has been “lived-in” and any major issues would have surfaced by now.

    CONS

    • Smaller. It’s interesting to see how floor plan size has increased with time. According to the National Association of Home Builders, the average home size in the U.S. in 2009 was 2,700 square feet, compared to only 1,400 square feet in the 1970s. The main complaints of older homes are storage space, bedroom size and the lack of having a “master suite.”
    • Less energy-efficient. Think about it–windows and insulation are older, some homes were built with older materials, some homes may even have additions that tampered with the home’s structure, or maybe even construction with code violations…there are many ways for an older home to truly become a money pit when it comes to energy consumption.
    • More maintenance. Again, you may have to change the roof, or furnace, or carpet, etc. There are just changes that you need to make on a home every so many years.
    • Older appliances. Unless you find one of those older homes that has been completely updated, you may need to also replace appliances. This is not only to update your home, but it also helps when trying to resell the home.

    Whether you decide to buy a new construction or an older one, buying a home is a dream that can become reality with plenty of research, patience and, sometimes, even many compromises.

  • New Home Builder Alternative

    Posted Under: General Area in Reno, Market Conditions in Reno, Home Buying in Reno  |  April 6, 2013 5:19 AM  |  259 views  |  No comments
    Having spent most of the weekend working with clients wanting to buy a new home in the Reno/Sparks real estate market we found that the inventory shortage that exists in the resale also exists in the new home market. None of the developments that we visited had any completed inventory for sale. Almost all of the builders have wait lists for homes that won't be completed for 4 to 6 months. Another sure sign that the market has moved from a buyers market to a sellers market.

    The builders have not increased base prices much in the last 6 months however lot premiums are on the rise. Builders use the lot premium to effectively raise the sales price without having to change the base price for the new home. A property that has a base price of $330,000 may have an actual price of $380,000 if the builder has added a $50,000 lot premium.

    We can help you navigate the new home or the resale market. If you are thinking about selling your home we can help you determine a selling strategy that best fits your needs. You can contact Helen Graham or John Graham at www.RenoRealEstate.com.

  • Can You Say FLASH SALES?

    Posted Under: Market Conditions in Reno  |  April 6, 2013 5:17 AM  |  189 views  |  No comments

    Sacramento real estate market heats up in flash sales

    Nationwide, Sacramento ranks eighth in the number of "flash sales," where a home went on sale and sold in less than 24 hours.

    As the Sacramento area continues to build a reputation as a hot real estate market, one tracking firm said there’s reason to think it’s also becoming a quick one.

    Nationwide, Sacramento ranks eighth in the number of “flash sales,” where a home went on sale and sold in less than 24 hours.

    Between Oct. 1 of last year and Feb. 26, Sacramento saw 128 such sales, according to brokerage firm Redfin, which compiled its rankings from Multiple Listing Service and other sources. The rankings were based on homes where the status went from active to pending less than a day after being listed.

    Redfin officials cited tight inventory, high demand, and instant message alerts on new homes for sale as creating a high number of flash sales.

    Sacramento was only three listings behind Los Angeles’ quick-turnaround sales and seven behind San Diego, which had 135 during the five-month period, good for sixth on the list.

    Phoenix, however, had by far the most such sales, with 540, followed by Chicago with 261. Houston, Dallas and Austin took the next three spots, while Denver, Las Vegas, Seattle and San Jose all trailed Sacramento in the rankings.

    We can help you with strategies to help you get you into a home in Reno. You can contact Helen or John Graham at www,RenoRealEstateByGraham.com

    Source: Sacramento Bee

  • Experts See Home Values Increasing

    Posted Under: Market Conditions in Reno, Home Ownership in Reno  |  April 6, 2013 5:15 AM  |  227 views  |  No comments


    A nationwide panel of 118 economists, real estate experts and investment and market professionals expects home values to end 2013 up an average of 4.6 percent and rise cumulatively by 22 percent, on average, over the next five years, according to the first quarter Zillow Home Price Expectations Survey.

    Survey respondents predicted home values will rise another 4.2 percent on average in 2014, before moderating somewhat to annual appreciation rates between 3.6 percent and 3.8 percent for 2015, 2016 and 2017. On average, panelists predicted home values to rise 4.1 percent annually from 2013 through 2017, exceeding the pre-housing bubble (1987-1999) average annual appreciation rate of 3.6 percent.

    This is the first time the predicted average annual growth rate for the next five years has surpassed pre-bubble levels since the survey’s inception three years ago. “The panel is quite bullish on home prices near-term, considering a pre-bubble average appreciation rate of 3.6 percent per year,” said Zillow Chief Economist Dr. Stan Humphries. “That said, their expectations are a bit shy of the home value gains of 5.5 percent that we saw in 2012, implying some moderation in the pace of gains. The panel expectations are consistent with continued strong home value growth this year fueled by tighter-than-normal inventory of for-sale homes and robust demand attributable to high affordability and a stronger general economy.”

    The most optimistic quartile of panelists predicted a 6.1 percent increase in home values in 2013, on average, while the most pessimistic predicted an average increase of 3 percent. Through 2017, panelists predicted cumulative home value changes of 22 percent, on average. Expectations for cumulative home value change projections ranged from 34.2 percent among the most optimistic quartile to 11.7 percent among the most pessimistic, on average.

    The first quarter 2013 Zillow Home Price Expectations Survey asked the panel to indicate their view of a reasonable timeframe for “winding-down” government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The majority of panelists (59 percent) indicated that a reasonable and appropriate timeframe for winding-down the GSEs is within the next five years. On the opposite ends of the spectrum, 13 percent suggested a timeframe within the next two years, and 10 percent said they believe a period of more than 10 years is sensible.

    To find out if your property is participating contact Helen Graham or John Graham at www.RenoRealEstateByGraham.com

    Source: The Niche Report

  • Nevada Housing Recovery

    Posted Under: Market Conditions in Reno  |  April 6, 2013 5:06 AM  |  118 views  |  No comments
    Attached is a video from Fox News with Stuart Varney and the HTV Flipping house host Scott Yancy who has an interesting perspective on the housing recovery. If you have any questions or would like to discuss your property situation please don't hesitate to contact Helen Graham or John Graham at RenoRealEstateByGraham.com.

    http://video.foxbusiness.com/v/2245145107001/

 
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