The good news is that it was a short month. We have been under varying degrees of "foreclosure moratoriums" from Fannie, Freddie, FHA, and the last banks standing. Surely the madness must have finally stopped?
Gross NODs (bank and HOA filings) rose to 891 from 790 in January (+9%), and from 424 in February 2008. NOSs did fall to 424 from 470 in January, still the 3rd highest month on record, but up from 248 in February 2008. TDs soared to 303 from 256 in January (+18%). February 2008 was a freakish low month with only 99 TDs, but the trend is pretty obvious. My question is: Where would we be without the moritoriums, or are they just shuck and jive?
I am rightfully accused of being a bloging elitist, based on some of the upscale properties and locations I profile. So for the "Dude", here are are some 89502 follies that showed up in the public realm late this week:
– 836 S. Center – 8 on Center is the project ‘yall love to hate, though I kinda’ like it. Remember "sold out" or "available units sold out"? Only 4 of the units ever sold to outside buyers. The developer ended up with 2, as did a partner. One of the deveoplers units, 836, went TD this week.
– 414 Vassar – Only half a block on the "wrong" side of Wells, 414 is a 2/1, 848 SF house that looks OK in the shots on MLS 90003057 (garage conversion not counted in the SF). It was purchased in July 2005 for $255,500. Previous sales were for $159,000 in May 2003 and for $97,900 in June 1997. It just listed as an REO for $89,900. This one just got blown back into the stone age.
– 2070 Mill / 2071 Market – 2070 was most recently Kristine’s Kars and has a small office building on it, and 2071 is the vacant car lot behind it. 2070 was purchased in March 2000 for $135,000 and 2071 was purchased for $55,000 in December 2002. The combined properties sold for $850,000 in December 2006, the sellers carried back an $800,000 note subject to the existing loans of about $200,000. The NOD was filed today. I’m pretty sure MGM Sales isn’t too happy to be getting this one back but, damn, it must have looked good on paper for the last 2 years.
– 526 Cheney – 526 is 2 units, a 2/1 and a 1/1. Bought 4/13/2006 for $335,000 with 95% financing. It went back to the bank 12/5/2009, and is now listed at $109,995. Down 73% in 3 years! This should cash flow easily for an investor if the units can generate $900 a month between the two (monthly rents x 120 – just a rule of thumb). Is this unreasonable for the area?
Don’t worry, I have a couple of elitist posts planned to get us back on track (3 ArrowCreek custom homes going NOD for over a million each in one week is a good one).
So it was a glorious day, it’s the weekend, and I got to meet a valued blog reader today. Life is good. What do you folks want to talk about?
Image courtesy of www.lostamerica.com, used with pernission. Full sized image here.
Valued Blogger
Glad to have met you today Mike, keep up the good work!
SkrapGuy
Ahh yes, 8 on Center. I remember it well. I remember when I and others here suggested it was an overpriced mistake built in the waning days of the bubble that was likely to go down in flames. Diane responded with some realtor spinjive about how it was soooo urban chic, soooo ahead of its time, and soooo much an example of how a creative idea could be successful. So where is it now? Values down 25% from original pricing? I’m sure that soon to be REO will just do wonders for the comps.
And then Downtown Makeover Dude chimed in about 8 on Center and how great it was too. Now 414 Vassar is right in Dude’s neighborhood. What does he call it? The “bungalo district”? Sold for $255K in 7/05, and now listed at $89,900? That’s a 65% haircut from the bubbled up frenzied nonsense of 2005. Cool. Looks like prices are getting back about to where they ought to be in the “bungalo district.”
Raymond
First it was the Somersett Village place that sold for 65% off peak price at auction. Now 414 Vassar is going for 65% off bubble pricing?
I remember when hearing about a house selling for 35% off was big news. Are we now into the days of 65% off?
The REOs and bank sales are starting to drive the comps all over this city straight into the ground.
I can’t wait to hear about the 3 Arrowcreek houses going REO.
Marla
I remember 8 on Center and the “sold out” spin. So it turns out that only half of the 8 units ever sold??
Man, and realors and developers wonder why they have zip credibility?
BanteringBear
With all due respect to MakeoverDude, that area east of Virginia St. is going to crater hard. It’s quite simply not a very desirable neighborhood. “Old and charming” just doesn’t cut it when you walk outside in the evening and someone busts a cap in your you-know-what.
DowntownMakeoverDude
Yes, home values going down in a neighborhood that’s always been a bit iffy is SUCH a shock, isn’t it? You should be less shocked about home values dropping in this area than Sommersett…to be honest. My neighborhood is an inner-city neighborhood.
First of all SkrapGuy, it’s bungalow, not bungalo. Second, that’s exactly what it is, a district of bungalows. Some of the oldest homes in Reno. We’re proud of our neighborhood’s rich history. The V&T Railroad used to go right down my street.
Yeah, my neighborhood is tanking. So is 80% of Reno. That isn’t going to stop a dedicated group of us (50+ neighbors) from softening the blow as much as possible by improving and watching over our neighborhood.
What’s interesting is my house is very similar to 414 Vassar. Mine is about 850 s.f., but in much better condition structurally, overall more appealling than 414 Vassar. (you should take a drive-by of 414 Vassar, Mike). My house sold in the mid nineties for $90,000, and 414 Vassar sold in the late ninties for $97,900. 414 Vassar sold for $159,000 in May 2003, I bought mine in 2003 not long after that for just under $149,000. So by that logic, for what 414 Vassar is listed at, my house is only worth $79,000? Oh well if that’s the case, not much I can do. At least I can afford it.
And of course I chimed in about 8 on Center, I chimed in on everything being built at that time, and still do. 8 On Center may not be my first choice of style in this neighborhood, but it’s better than the piece of crap falling-apart paint-peeling-off closed down pizza joint with dirt parking lot that was occupying that lot previously. I loved Frescos when it was open, but when it closed that lot went to hell fast.
And yes, Bantering Bear, crime in this area is a huge concern to me lately, but not all of us can afford a shiny pad in Arrowcreek or Sommersett. This is all I could afford…so I don’t have much choice other than to stick it out, work with our new graveyard shift officers and our neighborhood watch group to try to keep it from getting much worse, and wait for things to turn around in a decade or so.
CorusFollower
Mr. DowntownDude. I think I enjoyed you when were more positive haha. I did a little research for you.
Based on one REO in your neighborhood does not mean your house is also instantly worth that. I know where you live (via your business and some good detective work), and when I dig online, your immediate neighborhood is pretty stable. I can only find a few forclosures west of Wells Avenue and east of Virginia St. However there is a large cluster of them centered around the V.A. Hospital over in the Kirman/Vassar area that could potentially affect your neighborhood values. Luckily most of those homes are 3 bedrooms, much larger than yours, and would not be included as comparables when being appraised. Also, in looking at overall sales from 2003 to present (didn’t have time to go back further) there was relatively little sales activity in your neighborhood to begin with. Conclusion: There are areas of town in much, much worse condition than yours, so cheer up a bit.
Let’s save the depressing talk for the Montage…you’ll need to take a lot of happy pills when you find out what’s going on with that project. 🙂
CorusFollower
Also, dtm guy, you might consider hiding your domain name registration for downtownmakeover.com, that’s how I found your address, or what I assume is your address. There are a lot of psycho people in this world. Being a web designer I’m sure you are aware you can hide your contact info for any domain name, and probably simply forgot or thought it wasn’t important. It’s important! Especially when you own a public web site. We wouldn’t want any disgruntled Montage owners coming after you yes?
DowntownMakeoverDude
Thanks for the heads up on that CF, although next time maybe email me letting me know instead of splaying it out for the world to see lol.
I am always happy, for the most part. Mainly because I DID NOT BUY MY HOUSE AS A SHORT TERM REAL ESTATE INVESTMENT. Nor did I buy a house I couldn’t afford. I bought it to live in, for decades…not to try to refinance it a year later or improve it and sell it a year after I buy it.
So what’s going on with the Montage? Do tell. Email me, so we don’t change the subject of this thread. You must really know some people, because Mike McGonagle and I have been trying to get information out of buyers/L3/Corus for a month now.
Horacio
@ SkrapGuy and BB… So you think tract housing out in boondocks was a better investment in a tanking market?
Ripping up Peavine Peak with a flurry of subsidized little boxes was a better idea than trying to bring quality to the city?
For every dollar spent on developing the ilk of Summerset/RedHawk there was a social rip-off effect of about a dollar (the cost of transportation and other intangibles that these developers are never held accountable for) How about adding that into the “cost” of buying?
When the caulking on those matchstick faux Tuscan vinyl villas starts popping and the “builder” quality fixtures start packing it in are you going to count that into your depreciation schedule?
SkrapGuy
Horacio, what the hell are you talking about?
All I can say is that you must be a very new reader of this blog, who has NO understanding of what I and BB have been saying here for the last 2 plus years. Now I’m not here to speak for BB, but I suspect he agrees with me on this.
I was one of the very first posters here that said Somersett was going to be a trainwreck. I may have been the first poster here to tell Diane just how badly she overpaid for her overpriced mistake in Somersett.
To suggest that I and BB say that Somersett is a “better investment” than anything is a joke, and obviously you don’t get what BB and I and others, like RI, have been saying here for years.
But let me try to make it clear so that even you can understand it Horacio. IT WAS THE BIGGEST FREAKIN’ BUBBLE IN HISTORY. This whole town got bubbled up in the “you can’t ever lose money on a house in Reno” spinjive crap. Thousands and thousands of people in Reno bought houses they could not afford with crapola nothing down, I/O, teaser rate, stated income liar loans. Hundreds and hundreds more bought with ALT-A and option ARMS.
So you see, Horacio, it isn’t just Somersett that is going down in flames, it’s also Dude’s “bungalow district” too. You know, where people bought 800 sq. ft. 70 year old claptraps for $250K with bubble money because “houses in Reno always go up in value.” And it’s the downtown condo trainwrecks too. And it’s the absurd “upper end” like Arrowcreek and Saddlehorn where the Alt-A crowd threw a party. Just give it about one more year, and we will all see just how many of those Alt-A addicts could really afford that oversized overpriced monument to their ego.
Horacio
It is much same as what I’m saying, except that I’m pointing out that the social and environmental cost is both qualitatively and quantitatively higher for those peripheral ‘burbs than it would be for bungalow and downtown developments.
Time to do some land reclamation projects in those suburban tracts and offer some real fiscal incentives to keep downtown redevelopment projects going.
Talking about “popin’ caps” in people as a mechanism to slight their neighborhoods only privileges the very crime ridden existence of places such as outer Spanish Springs and that ilk. Those “70 year old claptraps” as you call them did no where near the socio/economic damage that those bulldozed ‘burbs have.
BanteringBear
Horacio-
Calm down- we’re on the same side here. I loathe the over development, and the hideous waste of natural resources. I’m going to agree with SkrapGuy in that “you must be a very new reader of this blog.” Otherwise, you would recognize that you’re venting at the wrong people.
I, for one, have never considered a home purchase an “investment”, so I would never even use that term when describing a purchase. I will, however, stand by my assertion that certain areas will fare a little worse than others because there is something to be said for location. But, no neighborhood is immune, all places will take a miserable beating.
GreenNV
“Planning” in Reno / Sparks / Washoe means planning how to increase property tax revenue. It has nothing to do with preserving the quality of life and environment that makes this region desirable in the first place. Just look around and see what we end up with.
I can’t speak to policies in Sporks (inside joke), but I do have personal experience with both Washoe and Reno policies, and they are a sick joke. Washoe shouts from the rooftops their success in preserving Canapa Ranch just south of Mogul as open space, while Reno annexes a 5 mile ribbon of parcels all the way around it to the state line for another Somersett sized development. Your first view of Nevada as you come out of the canyon is slated to be an industrial park instead of Quilici Ranch. Reno has implemented the West Fourth Street Transit district to allow intensified development, which could be a good thing (but mainly serves to get the old River Inn property developed). But then they extended it through Verdi, which was vehemently opposed, to Gold Ranch to allow intensified gaming development. Psychotic.
I have a draft of a post called “Inside the Loop” that I will have to finish up one of these days. There are incredible development opportunities here within the “city” to provide for growth without Somersetts, the abandonment of the forest interface plans along Mount Rose, Winnemucca Ranch (major EEECH), and the continued for-profit destruction of what the area is really about. It is just that the powers that be are short sighted, biased, or in some case legally bound to approve mind numbingly dumb projects. We need to change that.
BanteringBear
GreenNV posted:
“Winnemucca Ranch (major EEECH)”
I’d like to see a thread on that development, Mike, if I may suggest that. That’s a major sore spot with me. I’d be interested in hearing others opinions on that disaster.
Grand Wazoo
I always thought the 8 on Center “sold out” story was pure baloney. Who was the guy telling us it was all true, with golden insider info straight from the developer? The Dude of course!
Reno Ignoramus
“legally bound to approve mind numbingly dumb projects”.
Well, Green, as you know, we’ve had this conversation before. The “powers that be” may not be “legally” bound to worship at the altar of the Developer, but they sure as hell are politically in the bag. Bought and paid for. It wasn’t all that long ago, during our most recent election, that I pointed out that most, if not all, of the developer’s favorites got some of the most valuable and coveted free advertising space in the city and county courtesy of the whatever projects the developers had going. Why buy expensive billboard advertising when your developer buddies will give you prime construction site fences upon which you can plaster your campaign signs? Let me ask you: can you remember one instance when a slow growth or controlled growth candidate ever got his/her campaign sign up at a construction site? Ever?
Speaking of 8 on Center, well, yes, how about we just call it the “Boondoggle in the Bungalow”.
And if I recall correctly, the developer of that place was also selling some shoebox renovations of 1930s property nearby. I remember we had a discussion about the wisdom of paying about $400 a sq. ft, or some such thing, for about a 275 Sq. ft. closet sized room. And then, if I recall correctly, the thread just vanished.
Corina
I believe it was also the Dude who assured us, based upon reliable inside information, that the condo project at Victorian Square in Sparks was 90% sold out in Phase I. You know, the same project that went belly up, but did at least return their deposits to the 5 or 6 people who had entered into a purchase contract.
I supose any day now we will hear from the Dude that he has reliable inside information that the highrise condo project slated for the corner of Lake Street and 2d Street (whatever the hell it is called) is a go. Never mind the fiascos the Montage, Belvedere, and Riverwalk have turned out to be. THIS is the project that will resurrect downtown.
Martin
I tend to think that Makeover Dude is a good guy. His only problem is that he believes developers when they lie to him.
Reno Ignoramus
I agree with you Martin. I also think Dude is a good guy. I think his enthusiasm is commendable. Even Dude himself has acknowledged that, in the past, he was a bit taken in by developer smooth talk. There’s worse things that can be said about a man. Long time readers of this blog know that Dude and I don’t always agree on Things Downtown, but so what?
BanteringBear
I like DowntownMakeoverDude. We’ve had our differences regarding downtown, still do, but I admire his dedication. He’s a pretty good sport too, as he’s taken more than his fair share of heat. And, I think he’s finally starting to lay off the Kool-Aid.
Sully
Regarding Winnemucca Ranch there is a lawsuit filed in federal court.
http://www.nevadaobserver.com/TNO%20Transfer%20Folder%20090215/reno_sued_over_growth.htm
I don’t think this goes far enough though, as I have remarked before the planning commissions in Washoe/Reno/Sparks must rank dead last in a national contest!
They really have to stop meeting at the local pub.
BanteringBear
Thanks for the link, Sully. I especially liked the last sentence of the article:
“The Reno City Council did not hold any discussion among its members before approving the zoning ordinance.”
The entire Reno City Council should be fired.
dopey
you are also rightly accused of being a scumbag too, which you are.
TahoeTeal
I deeply appreciate the effort DownTownMakeoverDude has put into his website. You all have to admit that his information isn’t any less reliable then what any newspaper or any news organization puts out as gospel. And we all know they’re never wrong! I personally read as many sources of information on any topic as possible and then make up my own mind as to what I believe is accurate. There’s been a whole lot of Kool-Aid consumed by many over the years. It comes down to using the ability God gave you to make your own decisions and be responsible for that decision.
I’ve only posted here infrequently, but I’ve read frequently for a couple years. I’ve lived in Reno now for 9 years. Good Day……..
smarten
Okay BB, you’re going to love this one.
Five Indicted in South Lake Tahoe Mortgage Scam [ http://www.tahoebonanza.com/article/20090227/NEWS/902269954&parentprofile=search ]. According to Acting U.S. Attorney Lawrence Brown, “aggressive pursuit of those who engaged in mortgage fraud duing the boom and bust of the region’s housing market remains a TOP PRIORITY for federal law enforcement.” As Exhibit “A,” apparently here some fellow allegedly made offers to purchase five South Lake Tahoe properties at higher than listing prices with the proviso the sellers pay this fellow’s agent a 20% sales commission. After closing with the help of purchase money financing from Countrywide, WAMU and others, this fellow allegedly induced his Bay Area agent to turnover most of the commission. As a result, a series of federal lenders [and now taxpayers] lost over $1M just on these five transactions [between June of 2005-April of 2007].
I am asking Mike and any other RRB reader to refer specifics of the type of mortgage fraud which has permeated this blog in recent months to Mr. Brown for prosecution.
Martin
Can anybody really be surprised it happened here? It happened everywhere.
I am still very suspicious of those resales at the Palladio that showed about a 25% increase in value, when everything else has gone straight down in the same time period.
How can the median price be down 42%, and the median of condos down even more, but the Palladio is up? The Montage is a trainwreck but the Palladio is up? Riverwalk REOs showing up all over the place but the Palladio is up?
It’s just way too suspicious IMHO.
Grand Wazoo
I think the Palladio is no different than 8 On Center. The straight story will turn out to be quite a bit different than what the local Kool Aid swillers led you to believe, whenever the real story finally sees the light of day.
I would say there are lies, damned lies, and real estate.
GreenNV
A fun Palladio resale surfaced briefly on the MLS last week. Mr. Somersett bought units 801 and 811 for $1,354,950, combined them, put in $250,000 in additional improvements (according to the listing information), and the property listed at $2,150,000.
Grand Wazoo
Mike, that one has been on and off the MLS for the last several months. Wasn’t it you that pointed it out to us right here back in the fall?
Reno Ignoramus
Hey Mike,Green:
Just so that you don’t get accused of being a blogging elitist, let’s take a look at the condo market in Reno/Sparks. There is a bloodbath taking place at the bottom of the condo market. Did you know that there is a condo listed at $24K? Now, granted it is not anything the usual readers of this blog would ever be interested in. But just to see a listing for $24,000 is a sign of the times.
There are 42 condos listed for $50,000 or under.
There are 142 condos listed for $75,000 or under.
There are 225 condos listed for $100,000 or under.
There are 314 condos listed for $125,000 or under.
There are 369 condos listed for $150,000 or under.
At the other end of the condo market, there are 18 condos listed for $500,000 or more. 10 of them are in the Palladio.
And Mr. Somersett has his 2 units combined into 1 now listed for $1,995,000.
And yes, I quite agree with Martin and Grand Wazoo that something is very strange about those Palladio resales. It defies credulity that in a market where everything, and I mean everything, has fallen in value, that there could be bona fide arms length transactions representing a 25% increase in value.
Marla
Let’s see a 6% commission on a $24K sale is $1,440. Split between buyer agent and seller agent, it is $720 to each. Then agent has to give 50% to broker. So each agent takes home $360.
I would guess that the listing agent didn’t spend a lot of money on nice glossy brochures.
GreenNV
This was the first time I had seem Blake’s place listed with photos of the renovations. My feeds haven’t picked up the reduced price yet, but interesting. It is really easy to track the bogus and F&F sales at the Belvedere, but I really haven’t seen any insider action at Palladio. That said, I know of at least 2 local buyers that are in default on their primary residences, which could exert downward pricing pressure in the near future as their Palladio units come to market.
To pick up the newest listings, I search on the Prudential site. The limitation is that the site only tracks 200 listings max, so the lowest end drops off my radar. As a result, I’ve missed the total meltdown in the lowest end condo market in some zip codes. I was about to write about 2345 Tripp #6, listed at $34,900 and well below it’s original 1987 purchase price, but it looks like I’m behind the curve. Tanamera, Fleur de Lis, Silver Creek, and Turning Leaf are also tanking, but not so dramatically yet (except Fleur, with the failing foundations and construction defect suits going on). Guess who is financing Tanamera> Corus Bankshares.
Marla
Actually, there are a number of condos priced in the 20s and 30s. It appears that the asking price of Mr. Somersette’s combo unit in the Palladio, all by itself, exceeds the combined asking prices of the least costly 50 condo units on the MLS.
billddrummer
Don’t assume all of us are unwilling to look at/live in a cheap condo.
$75,000 or lower makes the payment much less than my rent, even adding some $$ for HOA fees.
Anybody interested in a mortgage loan to somebody with lousy credit? (crickets chirping.)
Didn’t think so.
Paul
Hey bill what about an FHA VA loan? The rules used to require 2 years since foreclosure but they take low credit scores. Try to save some money and open a secured credit card, spend a small amount each month and pay on time to boost your FICO. You mentioned you were renting – my friend living in one of the downtown condo projects renegotiated 25% off of his rent for a 6 month lease.
Raymond
You were pretty darn close Marla. The combined asking prices of the 50 least expensive condos on the market total $2,219,000. That’s $224K more than the $ 1,995,000 for Mr. Smith’s McMansion in the Sky. Actually, the asking price of the McMansion in the Sky is equal to the combined asking prices of first 46 condos listed on the MLS.
billddrummer
Paul,
Thanks for the tip. I’m almost at that 2 year mark from foreclosure, and I might qualify for 1st time homebuyer help as well. I don’t know about the foreclosure rules–whether the date of the NOD or TS is what governs. My NOD was filed in January 2007 but the TD didn’t record until October.
I’ll keep all of you posted, and thanks for keeping up this blog. As has been stated many times, this is the best source of local real estate market info.
Phil
Stock market back to 1997 levels today, seems the real estate market is holding up a bit better maybe?