Washoe County re-sales increased for the third consecutive month (up 20% over March); however April new homes sales decreased in April over March (down 11%). Summing re-sales and new home sales results in a nearly 9% increase in Washoe County recorded home sale recordings for April over March. 605 recordings vs. 556 recordings.
Unfortunately this sales activity is negated by the increasing foreclosure activity. As has been the case for the last twelve months Notices of Default (NODs) continue to skyrocket. April saw another 457 NODs recorded in Washoe County. This number is truly staggering. 457 NODs is more than 15 a day (or more than 20 per day, excluding weekends). And this trend does not look to subside anytime soon. We’re already at 58% of 2007’s total (and it’s only April). At this rate 2008’s NODs will outnumber 2007’s by July.
Click on the charts below to enlarge.
These charts are provided by our friends at Ticor Title.
11 comments
This chart for NOD’s is beginning to look like some of the tech stocks in the late 90’s when they were taking off on their parabolic rise.
How can anybody suggest that the bottom of the market, in terms of sales price (the only bottom that matters to normal people)can even be on the horizon?? With thousands and thousands of REO properties hitting the market as we move into Fall and Winter, the bottom is in January?? January 2011 maybe.
And yes, that’s thousands and thousands.
You want to know how big the REO tidal wave that is expected to hit Reno is? I had lunch last week with some broker/owners of a large well known real estate office in Reno-Sparks-Tahoe. They have established a division of their business to exclusively service REO properties in the area. This division will do such things as work with the defaulting “owners” to assist them to vacate the premises in a peaceful and appropriate manner (no holes in the sheetrock), maintain the property during the marketing phase (no dead lawns), act as agent of the seller-bank, etc.
I asked how big do they expect this “REO market” to be. One said maybe 3,000 REOs by year end. I said that’s almost 3/4 of the size of the entire MLS now. He replied that they now conceive of themselves to be a different business than they were in a year ago. The REO business. Many agents will be seeking only REO listings. No private resellers need apply.
I said I had heard some predictions that the market bottom might be around the end of the year or early next year. He politely, and quite professionally, laughed out loud.
I have no comment on this man’s predictions. But I can tell you he is a highly experienced and well known realtor in town.
Well, if that is the case, then it certianly sounds like this bubble will follow all other bubbles. That being prices falling below fair value when all is said and done.
Just learned that the greatest risk to potential house buyers (house debtors), is the “off MLS balance sheet” inventory.
Inventory that you can’t see…(dark pools) of NOD’s, Foreclosures, REO’s that you are (or will to a greater extent in the future) competing against.
This thread addresses that very risk.
You need to view Mr. Mortgage Guy, a straight shooter on the state of the RE industry. He’s now part of Mortgage Lender Implode O Meter.
Links below, for reality..and a real education….
http://youtube.com/watch?v=1PDeMZYRjLQ
http://ml-implode.com/
Boy this is really getting fugly. A median of $175k might be a bit high. $150k?
I just hope the vast majority of the forclosures are people trying to flip or buying rental properties. This is a lot of pain. Losing your home has to be pretty darn awful.
Imagine if 75% of MLS being REO, banks compete with each other in the real estate market. Could it be that soon banks will be advertising quick response times on offers; or shocking things such as “No Waivers Required!” or perhaps, just a promise to sell at the asking price.
DonC…my sense is that the foreclosure picture here in Reno is similar to what it is in most places where REOs are taking over the market. Some were no more than greedy flippers who got stuck holding the bag when the bubble burst, some were people who bought to live in the house but fully understood the lies they told to the mortgage broker who was more than willing to wink and nod, and some were naive and ignorant enough to believe they really could afford a $400,000 house driving a truck for a living. That’s why the “the solution” if there is to be one, other than to just let the market sort this out over the next 3-5 years by itself, is complex.
I hear the foreclosure bus tour has added an additional bus and added a second departure time. Will we soon see competing foreclosure bus tours? Perhaps an evening sunset dinner tour?
I just hope the vast majority of the forclosures are people trying to flip or buying rental properties. This is a lot of pain. Losing your home has to be pretty darn awful.
There are a lot of families in there with the speculators, families who overextended, counting on the next year’s appreciation to climb out of the hole.
It’s sad, for sure, but losing your home isn’t the end of the world and they will learn a valuable lesson from it.
And, hopefully, so will their reckless creditors, though massive write-downs and losses.