Mining woes flood home market
By Ken Alltucker
The best thing real-estate experts can say about Battle Mountain is it's a good time to buy.
That's a sugarcoated description of a market where foreclosures are common, asking prices are plummeting, dozens of homes are empty and the town's economy is hobbling.
All that adds up to slow afternoons for Patricia Campbell, one of two real-estate agents remaining in this central northern Nevada town of 4,700.
"I don't see an end to it," Campbell said from her office near the boarded-up Owl Club, once the anchor of a bustling downtown but now a stubborn reminder of the town's misfortune. "I don't see anything that will change soon."
Not that Battle Mountain is alone. Towns throughout rural Nevada are enduring an economic meltdown since 2,700 miners have lost their jobs because of slumping gold and copper prices. In addition to vacant storefronts, slumping retail sales and strained social services, real-estate values are sinking and "For Sale" signs are everywhere.
"It's a nightmare - the biggest thing on my mind," said Deann Decker, who is trying to avoid foreclosure on her house. "I never would have bought a home if I thought this would be the result."
Like dozens of others in Ely, Decker is trying to sell a house she no longer lives in. She and her husband- among 433 who were laid off from Broken Hill Proprietary's Robinson mine near Ely - relocated in mid-August to Arizona, where he had landed a job with a brokerage firm, Charles Schwab.
The couple owe $84,000 on an Ely house they bought more than three years ago when the Robinson mine opened with an expected life span of 15 years and White Pine County's economy was strong. With a flood of homes for sale now, Decker said they'd be lucky to get $60,000. They bought the house for $86,000.
The Deckers can't afford two monthly payments - one for their Ely home and another for an Arizona rental. If they don't sell the house soon, the lender could foreclose, blackening their credit.
"You work so hard to keep your credit clean," Decker said. "Now it's out of your hands."
Government tries to help: The U.S. Department of Housing and Urban Development has contacted some lenders in an effort to prevent foreclosures in White Pine County, said Wayne Waite, senior community builder for HUD's Reno office. A similar effort will be launched soon in Humboldt and Lander counties, where mining layoffs have occurred since late 1997.
Those not lucky enough to find a buyer have simply packed their belongings and left their homes. Because holding onto foreclosed properties is frowned upon in financial circles, lenders have sharply discounted prices to sell properties quicker.
"My regular sellers can't make it," Campbell said. "The foreclosures have dipped prices by up to 30 percent. Most of our sellers don't have that mobility."
Foreclosures have put such a dent in the market value of homes that the Lander County assessor is gathering data that could lead to lower property taxes.
"Now people are only looking for foreclosed homes," said Lander County Assessor Lura Duvall. "I've lived here for 19 years and it's the worst I've seen it. It's all a result of the layoffs."
A county can't charge property taxes based on the appraised value of a home when the home's market value - what it's selling for - is actually lower. If the data justify it, Duvall said she'll lower property taxes countywide. That would mean fewer dollars for county government, but it would cut the tax bills of the county property owners, bringing much-needed relief.
"We're still gathering data in case we have to do that," Duvall said. "I care about the people who live here."
Foreclosures depress market:
RENO GAZETTE-JOURNAL
Duvall said it's been difficult counting how many homes have been abandoned. Typically, people leave for another job or flee without telling anyone to duck the embarrassment of eviction and foreclosure. All but a handful of Battle Mountain's 134 homes for sale are either empty or abandoned.
The prospect of foreclosure has seemingly created a sense of shame for some homeowners. Campbell of Battle Mountain Realty said she was aggressively marketing a home owned by a laid-off miner who could no longer cover a monthly $1,300 payment with unemployment checks.
"One day he was there and the next day he was gone," Campbell said. "It was a nice home and it had some amenities. It is difficult when you are fighting an uphill battle."
She said she lost one other client under similar circumstances - a laid-off miner literally fleeing town in the shadow of night.
A competitor, Copeland Realty, folded its Battle Mountain office this year because the sour economy made business too difficult.
"The market was real good in Battle Mountain up until all the layoffs at the mines down there," said owner Evy Copeland. She keeps her office in Elko, which is not only larger than Battle Mountain, but also has weathered mining layoffs better because it has a more diversified job base.
"There is no comparison," Copeland said of the Elko and Battle Mountain markets. "Elko is a different situation. We are a pretty big place here."
Tourism helps Winnemucca: The real-estate market in Winnemucca, walloped by several mine closures and layoffs, also has seen better times.
Area real-estate agents say the town has been able to protect itself more than Battle Mountain. It still relies on agriculture and tourism in addition to mining.
"Manufactured homes are taking the biggest hit," said Harold Hawkins, owner of Vision West Realty in Winnemucca. He said mobile homes dot the outlying area, a symbol of the need for quick housing when the mines boomed earlier this decade. When the economy turned sour, these homes were the first to be abandoned.
In mid-1997, before mines began extensive cutbacks, about 50 homes were for sale in Winnemucca. Now more than 200 are on the market, Hawkins said. Others call that estimate conservative.
"What we're seeing is such an uncertainty of where we are at," said Terry Miller, broker/owner of Century 21 in Winnemucca. "There is a significant amount of hesitation."
Ely also has seen a surge in home listings, an increase that actually started before the Robinson mine shut down this summer. Many homeowners, like Deann Decker, kept a close eye on the price of copper and realized Robinson mine would cut expenses if the metal's price didn't improve. She and her husband listed the home for sale weeks before the mine's owner, Broken Hill Proprietary, announced in June that it would close Robinson and lay off all but a handful of workers.
A lot of people had the same idea, said George Swallow, an Ely real-estate agent who has been selling homes longer than the state has required a license for it.
"Before we had the BHP shutdown, we had more homes come onto the market than the last 10 to 15 years," Swallow said.
Mine closure surprises Ely: Most employees didn't expect the mine to close. "We were really surprised. We thought it would stay open longer," said Don Wilkie, a Robinson employee and mining veteran who decided to rent, not buy, a house.
Wilkie lives at Ely's Mineral Heights subdivision, developed by Broken Hill Proprietary for mining employees and families. With the mine closed, for sale signs are on more than half the development's homes.
Wilkie continues renting the home while he trains to become a bus driver. Although the BHP-owned home is on the market, Wilkie is in no hurry to move because he figures it won't be sold soon.
Joe Eichelberger, who supervised purchasing and warehousing at the Robinson mine, bought a $175,000 home at the subdivision more than three years ago. He and his wife, Lisa, got a 15-year mortgage, matching the expected life of the mine.
"You always have the ups and downs, the boom and bust," said Eichelberger, eyeing a spectacular view of the surrounding valley from his unfenced backyard. "But this bust is the worst we've seen. It's like the Great Depression."
For information about foreclosures and possible strategies to prevent it, call the U.S. Department of Housing and Urban Development, 784-5383.