[Sorry for the lame title of this post.]
Our colleagues, Mark Buergin and Lexi Cerretti, in our Incline Village office have just released their 2007 Incline Village Home Sales Report. According to their report median sales price, volume sold, and units sold have all increased for 2007 compared to 2006. From the report: "The median price of a single family home or townhome in Incline Village, Nevada, was up 6%…in 2007 compared to 2006." See the complete report here.
Guy JohnsonA successful prior business owner, Guy brings to the table twenty-plus years of exceeding client expectations. “Listening closely to my clients is the most important step to meeting their needs,” he says. A former Chicagoan, Guy earned his MBA from the University of Illinois.
Mike McGonagleAn architect, business owner, and compulsive public records hacker, Mike reads the tea leaves of the local real estate market from a unique perspective. Yet another Chicagoan, Mike earned his MArch from Harvard University.
6 comments
Sorry Guy, here we go again.
Mark & Lexi CONTINUE to be in denial.
The number of sales of SFRs, PUDs, freestanding [but not manufactured] housing units for 2006 was half of 2005 at 280 [23/month]. And the number for 2007 was exactly the same as 2006.
Interestingly [at least to me], the number of sales of SFRs increased in 2007 from 121 [10/month] to 138 [11-1/2/month]. Conversely, the number of sales of PUDs decreased during the same period from 118 [just under 10/month] to 97 [8/month].
Since the median price of a SFR is higher than that of a PUD or freestanding housing unit, is it any surprise then that overall median prices increased in 2007? And again, with such a minute statistical sample this micro-area represents, I submit that median prices have become immaterial.
In the under $2.3M category, day after day I see price reduction after price reduction [this data is reported almost daily by Don Kanare (www.insideincline.com)]. And quite a number of these price reductions are in the $150K and greater range.
I also see property after property being taken off of the MLS altogether in frustration. I then see them popping up as rentals on craigslist or one of the several local vacation rental sites.
So you want to characterize this a market as being immune to everything going on around it? Be my guest. But to those who are close enough to see what’s really going on in Incline Village, the head of the SFR/PUD market has been cut off and the body just doesn’t realize it yet.
Are sales in excess of $3.5M strong [at least by traditional standards]? Yes. But what does that mean to the readers of this blog?
S. Martin is well aware that the home sales are down in terms of volume. We are all aware that the market is well off it’s peak from 2004, where we saw 294 SFR and PUD units sold, and a whopping 317 condos.
I am not sure what data S. Martin is refuting, some of his figures are incorrect- 183 SFR’s and PUD’s sold in 2007, which is actually 35% less than the 278 units sold in 2005 (not 50% as S. Martin reports), and the number of units sold in 2007 was not the same as 2006, 183 units sold in 2007 compared to the 162 sld in 2006. we must keep our facts straight.
Nowhere in our reporting are we putting a “spin” on the numbers of homes sold or median prices in Incline. As S Martin recognizes, Incline is a different market- where else do you see a $32 million lake front sale in the midst of this current real estate market slump? Of course we are in a very different market from Reno, Sacramento and Las Vegas. The closing statement on my report reads…
“In all, home sales were again very slow in 2007, and not expected to change significantly for much of 2008. Incline Village is a very unique market, and sales prices have remained strong in the $1 million and over price range. We have noticed a growing inventory of homes, especially under $1 million, and do see increasing downward pressure on prices in this range.”
In addition, Don Kanare does an outstanding job of cataloging the daily activity, price reductions, and good buys (of which many are popping up) in Incline Village. I too follow his blog, and witness the state of the market actively in dealing with Mark and my listings.
What S Martin is omitting is the other side of the coin in this bear market is the opportunity for buyers. This week we have seen a price reduction on a bank owned single family home in a great neighborhood on a 1/3 acre lot drop to below $600k. My associate, Mark Buergin, recently put a condo in escrow which was listed under $200 K. Last month, I represented the buyers in a Four Seasons condo sale who purchased the unit for $48,000 less than the previous owner paid for it less than 2 years ago.
In all of my market reports, I point out the dichotomy of the high-end versus the low-end and condominium markets in Incline Village. Rather than rant and rave about how lousy the market is (on the low end), I seek to point out the opportunities for my buyers, many of whom have not been able to afford to buy a home until now. The decline in prices is difficult for home buyers who could afford to purchase in an up market (and it was easy for everyone to spot that up trend). But it is extremely important to recognize the opportunity for buyers in a falling market.
Of course, no one knows when the bottom will hit, and the prognostications change daily, hourly and even to the minute depending on what financial and economic report hits the press. It is our job as real estate professionals to provide data, news, tools and resources to inform our buyers and sellers so that they are educated on the market, and can make sound decisions in real estate transactions. When we look back to this market in 5 to 7 years, we will see those who sat and grumbled about the lousy sales figures, doom and gloom, but we will also see some very good deals transacted by buyers and (this may surprise you) SELLERS.
Sellers who are looking to buy more property in a down market benefit in taking a loss on a lesser value home on the sale, making up the difference in buying a bigger investment at a huge savings. It goes back to the basic prinicple of “scale of economy”. If you loose $50 K in the sale of your $200 K condo, but you sell in order to buy a large single family home,saving $300 K in the purchase of a $1.2 M home on the golf course.
I welcome your comments, and am happy to review home sales data with anyone confused about the figures or the common “spin” the media loves to portray. We all benefit by being educated on the state of the market, and in the micro-market on Incline Village, it is important to see the anomalies which do take place. Big buyers do dictate many markets in resort areas, and when they start moving money into large investments, watch out. That is when the bottom is in, and everyone wants to hop on board.
Observing our own decline, before Reno-Sparks prices dropped 20+% in some areas, volume was off 20+% in those same places.
I haven’t been scrutinizing housing markets long enough to say for certain that an X% volume drop is a sure-fire precursor to an X% price drop in the following year or so, but I have observed this trend in the past.
As someone who someday hopes to own in Incline, I watch this market with interest. Yes, the Lake is different. I get that. But I wonder if market forces tend to cycle through the same patterns everywhere, perhaps at different rates.
Kudos to Lexi and Mark for tracking the data, acknowledging the contributions of colleagues like Don, and adding to the conversation here in Reno.
And kudos to Smarten for challenging their point of view. I think enough of us either own or want to own a nice little vacation place up there or make use of a gorgeous Nevada tax haven… What’s happening in Incline is absolutely relevant to the conversation about local real estate.
Other forces are at work that may keep Incline Village prices high in the next two years… Tech jobs are coming back strong in the Bay Area, filling office vacancies, keeping unemployment low, propping up their housing prices and perhaps leading to a new round of IPOs in the world of social media.
Watching MySpace and Facebook, we may have one more tech bubble ahead of us after all, which inevitably leads to discreet purchases along Lakeshore Boulevard a few months after stock options are cashed in.
I also belong to the Incline MLS and would be happy to help you with that purchase…
Lexi, I didn’t say that 183 SFRs AND PUDs sold in IV/CB 2007. What I did say was that in 2007 there were 138 SFR sales; 97 PUD sales; the number of SFRs, PUDs and freestanding housing units [combined] that sold [280] was identical to 2006; and this number was half the number sold in 2005.
The only thing incorrect about these numbers is that in 2005 there were 514 [versus 280 in 2006 and 2007] SFRs, PUDs and freestanding housing units [combined] that sold.
These numbers come straight from Don Kanare’s Incline Village/Crystal Bay year end updates [ http://www.insideincline.com/real_estate_update.htm ].
Throw out the mega [over $3.5M] and low end [under $700K] sales and the overwhelming majority of what’s left over is simply not selling. Nor are IV/CB sellers generally realistic in their pricing because rather than doing what new housing builders are doing in Reno, IV/CB sellers would by and large rather take their properties off the market. As Don Kanare has stated on so many occasions, unlike Reno they don’t need to sell.
As a result, I still don’t see IV/CB opportunities for buyers unless you’re talking about the extreme low end of the market. And that’s the problem.
If you need to use very unique, then you should use unique less. Unique means one-of-a kind. Perhaps that sheds some light on the blinders that the RE industry has. Prices are falling, and while interest rates are low, financing is harder to obtain. The people with money are the buyers right now, will they buy an asset while it’s declining in value? - maybe if it declines slower than the stock market.
We have huge problems in the economy..too much local(city) debt, too much county debt, too much state debt, too much Federal debt.
Too much personal debt..
I have been in Incline Village since 1988.
IV is not getting hammered like some areas in the California Central Valley, Sacramento, Stockton, Antioch in the East Bay, Las Vegas..
Only 1/3 of IV houses have loans on them..
People did not buy 2-3-6-12 rentals in IV..
Are there going to be some people who have financial problems who have to sell..Sure, like every other area..
No one knows how long this loan crisis will last..Last time it brought down the complete Savings & Loan industry..Go back and read up on that in case you missed it..
Now you have so many problems..Sub-prime, alt-A, stated income..Neg-Am
Even the best of borrowers used stated income when they could not afford the house..
Like JP Morgan said..Don’t buy till the blood is in the streets..
Like Trump says..Cash is King