Pending status homes in the last 24 hours = 491 at an average $371K and a median $308K. Current number of single family homes offered for sale = 4817. Compare this to July’s random pendings check at 432 for an average $386K and a median $310K with 4805 homes offered for sale. So in this moment, if these pendings close, we have a ten-month supply of homes in our market, down from eleven. It’s good to see a little improvement.
These figures were pulled from the Northern Nevada MLS and do not include builder direct sales, for sale by owners or other private transfers. These are single family homes including condos, stick built and manufactured homes pulled from Area 100, the Reno-Sparks metro area. Active listings include actives, new, back on market, price raised and priced reduced. Pending classifications include pending no show, active pending call, active pending loan and active pending house. Pendings were pulled looking at a 24 hour period of time to provide a market snapshot of recent activity.
10 comments
If we go back for the last 5 months and look at Diane’s “Pendings Watch” post, this is what the median price has been:
April………$329,000
May………..$325,000
June……….$325,000
July……….$310,000
August …….$308,000
So we see that the median price has dropped $21,000 in 5 months. That is, the median price has droppped an average of $4,200 a month for each of the last 5 months.
Let’s call it $1,000 a week.
Tip for future house buyers: While you wait for the market to unwind, based upon the above info, it’s easy to calculate the price of your future house. It’s going down about $52,000 a year.
Now of course, a decline in median price of $1,000 a week across the entire market does not mean that any one particular house will decline that much. Some won’t decline that much. Others will decline more.
But you get my point?
If one wants to lock in declining value, there has never been a better time to buy in Reno.
So should I wait 6 years and just pick up a home for free then??
I imagine the pace of dropping prices picks up, but (like the boom) it won’t last long. The fall in prices will come to a stop at the point where there are buyers willing to buy in greater numbers.
“Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would go on forever find their vision destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang.”
John Kenneth Galbraith
“A Short History of Financial Euphoria”
“A modern equivalent of peonage, a lifetime spent working to pay off debt on an asset of dwindling value.”
Harpers Magazine
May, 2006
It is true that a house, unlike a share of pets.com, has some intrinsic value, and that value will not fall to zero.
However, that is not to say that value cannot fall substantially over a period of years. It has happened before. There are many realtors today who have no experience with how ugly a housing market can get. Many of them were in high school the last time there was a serious downturn. So beware the 30 something realtor telling you we are almost at the bottom and prices are going to turn around here any day.
Yesterday, on NPR’s Talk of the Nation, the topic was the deterioration of the housing market in the U.S. Only 3 months ago, it was rare to see a story in the mainstream media about the housing market deflation. Now the media is obssessed with the story.
I do note, however, that during yesterday’s broadcast, nobody pointed out that Reno is different because Reno is special. The media is still not yet onto the story that economic forces present everywhere else do not apply in Reno.
So when to buy? It is as difficult, if not impossible, to time the real estate market as the stock market.
I’m a rookie at real estate. If I’m looking to buy a house in the Reno/Sparks area, should I buy now or try to wait a few months to see if the prices drop even more? I know the current trend is that prices continue to decline so that might be my answer right there.
Is it cheaper to buy a new home or used home if they were the same sq footage and bd/bath combo?
Any suggestions?
Hi, I’m a rookie as well. I’m also one of *those* Californians who think that Reno really *is* different. If it isn’t, then why do you live there?
For the last few months I’ve been reading everything I can about Reno real estate. I subscribe to the RGJ, several blogs/news feeds and I search online every day. And I always read the r e n o . r e a l t y . b l o g . Let’s hear 3 cheers for Diane!!!
Perhaps my situation is a little different. I want a 2nd home in the Reno area to be near family members. Unfortunately, I’m interested in only one specific neighborhood. Several homes are currently for sale in that neighborhood, but they are all out of my price range. Many smaller, less expensive homes exist there, but none are currently listed.
So I wait.
I’m prepared to make at least a full-price offer the instant that something pops up in my price range and I don’t care what happens in the future because I will never sell.
My situation may not be the norm, but I’m guessing there’s some pent up demand just waiting for prices to table.
Anyone else notice that interest rates are dropping?
-EyesWideOpen
PS: Diane, I’m truly sorry that I found my agent before I found your blog or I would have called you first.
Al-nonymous, I would watch and wait. In fact, my own mother-in-law is looking to move from the Bay Area, and this is what I’m telling her: If you see the perfect house at below market value, jump on it. Otherwise, don’t fall in love, watch and wait. I think sellers will crack in the coming months, and prices will weaken.
EyesWideOpen, you’re doing the right thing, and I’m glad you found a realtor to work with who makes you feel comfortable. But if you want to refer friends, I’d be happy to help them out.
“I think sellers will crack in the coming months, and prices will weaken.”
Diane, you are starting to sound like me.
Eyes: If you are certain that you will own the house for 20 or more years, and if it does not matter to you that the house you buy could be worth 20%-30% less than you pay for it within 3 - 4 years, then of course you should buy as soon as you can. And yes, indeed, offer full price, or more. Although I would be dumdfounded to hear that any competent realtor would advise a full price offer in this market.
Yes, mortgage rates have been declining the past 4-5 weeks. The yield on the 10 year Treasury at auction yesterday was 4.75%. Traders have been bidding up the price of Treasuries, causing the yield to decline.