Below find the updated Insured Recordings statistics for Washoe County from our friends at Ticor Title.
Resales continue to climb for the fourth consecutive month. At 590 May’s number of resales has returned to 2007’s level.
Refi’s fell due to increasing interest rates; and new home sales continue to skate along the bottom.
Note: Ticor did not provide the Notice of Default stats for May because they are looking in to their data source to ensure accuracy. I will provide the monthly NOD stats as soon as I receive them.
[June 25, 2009] Update: Ticor has revised the methodology used to produce the Notice of Default filings chart [see explanation below]. This latest chart should reflect more accurate numbers.
From Ticor - [Previously] it was suggested that there was a discrepancy on the statistics that we have provided in the past, in regards to Notices of Default filing in Washoe County. After doing some research, we found that the service we were using was off 150 to 200 filings per month. We apologize for the discrepancy and if it was miss-leading to you and your clients.
We are now researching the information ourselves through the Washoe County Recorder and hope this will provide a more accurate depiction of our market. The total notice of default filings includes, all types of notices of defaults (e.g. all types of deed of trusts, HOA, etc.)
Thank you for your understanding.
31 comments
Guy, has Ticor made up the NOD chart for May?
Sully,
Yes, coincidentally I have just received them. I will post them here very shortly.
I Dont know if this has been mentioned yet but a $30 Million Notice of Sale was filed on the Belvedere yesterday. The auction on the courthouse steps will be July 16 i think.
I read it again and its July 14th
To Guy,
On the revised Ticor NOD list:
Just goes to show that things are much much much worse than anyone expected.
Now, this list includes HOAs and other low value claims, but the implication is clear: More NODs are entering the pipeline than are exiting as closed sales.
Result? More downward pressure on comps, more inventory, lower prices across the board, and an opportunity for those who want to work REOs in the title and escrow business.
61 New Home sales + 590 Resales = 651 home sales. Graph shows ~950 NODs. That’s a 50% excess over the home sales. Looks like there are many moons ahead of us before a bottom is found in this real estate market.
FRH said ‘Looks like there are many moons ahead of us before a bottom is found in this real estate market’
I agree but would add specifically the bottom in the Reno market. Other areas will pull through first, as some areas are seeing the first signs of stabilization. Unfortunately Reno will be close to the tail end of that progress do to the overbuilding in general added to the perceived notion that high end houses would sell.
Even at the end of this who will be buying at Montreux?
I WILL BE BUYING IN MOTREUX
I’m sure Spanish Sprigs (sic)is issuing a collective sign of relief.
Guy,
Can we go behind that figure a little bit?
Of those 590 resales, how many were for under $200K?
Under $300K?
Between $300K and $500K?
Over $500K?
How many were REO or short sales?
Thanks.
Of those 590 resales, how many were REOs bought with an FHA 3.5% down loan?
The median is now $175,000. 3.5% of $175,000 is $6,125.
I’m sorry, but to me this is basically what got us into this problem in the first place. Who honestly thinks that just because people have to come up with $6,125, that they are a better bet not to default than the people who had to come up with nothing in 2007?
The FHA is now peddling just a slightly warmed over version of the subprime crap that got into this mess.
The median has droppped 7.5% in the last two months. In other words, all the people who bought with 3.5 % down three months ago are already underwater. I predict that at least 50% of these 590 resales will be NOD by next Spring.
The nonsense continues.
It’s nice to think that cash is king, but reality is the country runs on credit. If they are lending these loans to properly documented borrowers, then this ISN’T The same thing that got us here.
Shut down credit = shut down our economy. Like it or not.
Well if the Federal tax code and other unsavory nonsense such as the Federal Reserve didn’t keep promoting the greater assumption of debt, then the United States would have a more sound economy based from savings and production. Ultimately, that is where it is going to have to return to and thus housing prices will continue to spiral downward to meet the new reality, which is nothing more than the old reality. Adding more credit to base your economy is like giving a heroine addict more free juice for just one more kick before they keel over. Time for a wake up call and Deflation Nation is calling it in.
I’m with Martin. If the only way somebody can buy a house is with a 3.5% down loan, then that person ought not to buy a house. 3.5% is basically a joke down payment. Why don’t we just give people 100% financing as long they are “properly documented borrowers”, Down? Why ask people to put any of their skin in the game, just to keep the game going.
If people had to put even 10% down, the bottom end of the market would be as dead as the top. But then, I guess that’s the whole reason for the 96.5% financing, isn’t it?
The least expensive property listed on the MLS is a condo for $20,900. If I could get one of them FHA loans, my down payment would be $731.50. If I could finance the $20,168.50 balance at 5.5% for 30 years, my P&I payment would be around $115 a month.
And then, after I got the loan, I could turn it into a rental. How could it not cash flow?
Could this be why there were 590 resales last month?
“If they are lending these loans to properly documented borrowers, then this ISN’T The same thing that got us here.”
Wrong. It’s well documented that when people have skin in the game, ie. a down payment, they are less likely to walk away from the house and continue paying EVEN IF the house is underwater. The zero down nonsense is a large part of why the market melted down. Should there have been 20% down payments required all along, we never would have even had a bubble. A measly 3.5% down is hardly an improvement given the fact that the transaction costs to sell a home run at about 8% or so, meaning buyers are underwater to the tune of more than 5% the day they sign the paperwork. We’re still minting foreclosures.
bantering bear
SHUT THE PIE HOLE
Are they giving loans with ZERO down still? the majority of lenders ARE NOT!
were they REALLY documenting income during the bubble era?
NO not really, I think we all know that
Are they now? for the most part YES!
during the bubble era you could get a ZERO down mortgage as long as you had a pulse
NOW you have to have SOMETHING down, as well as documented income..
the documented income alone would have helped prevent the bubble..
BB go back into hibernation, you have an ugly face
R.I.,
The breakdown you requested follows. Note: it is difficult for me to replicate all of Washoe County using our MLS system, so I am looking at sales in Reno and Sparks, as well as some surrounding areas. The number of sales I find for the month of May total 497. …not quite Washoe County’s total of 590, but the breakouts should be relatively similar. Here you go:
Sales under $200,000: 62.6%
Sales $200,000 - $300,000: 23.3%
Sales $300,001 - $500,000: 9.0%
Sales over $500,000: 5.0%
REOs: 56%
Short sales: 14%
I count that 4% of Guy’s numbers equals 25 homes in the $500K+ range, up from before. Also, 70% distressed is down from nearly 80% before. I’m no ‘green shoot’ believer, but these metrics are at least slowly heading in the right direction.
…until the annual Spring Fling is over, which it soon will be. Let’s see what these numbers look like in Sept, Oct, Nov, etc.
***
NOD’s are filed, sure, but what happens when an NOD results in clearing of the default? Does some ‘nevermind’ notice get filed or the NOD get removed? Is there a way to track un-NOD’s, for lack of better word? This might point to another metric: the % of NODs clearing through non-trustee sale means, which presumably as the market gets better would go higher and higher as a percentage. This might be a leading indicator of the true recovery, or at least of the bottom.
***
Derrick, wow, thats the longest posting you’ve done in months and months without a personal insult, … until the end. If you left the insults off and the tangential crap like oil shorts, and stuck to your comments which otherwise were sensible above (in your 2nd post anyway), you would not be so dismissed on this blog. Just a suggestion.
CL,
The “un-NOD” is “Cancel Default” on the Recorder’s site. Jan - 125, Feb - 115, Mar - 177, Apr - 199, May - 159, June - 116 to date. Many are HOA cancellations, but still a larger number than I would have guessed. I’ll keep tracking them - it is an interesting metric.
To GreenNV,
One wonders if Cancel Default means the borrower made a deal with the lender, or whether the lender couldn’t get the documentation together in time for the auction.
It will be interesting to see whether the completed NODs track upward or downward in the next few months.
Thanks Guy for the update.
Not much has really changed. 86% of all sales are for $300K or less. 63% are for less than $200K. 50% are for less than $175K.
If 25 houses sold for more than $500K, then only 4% of all listings over $500K sold last month. 96% did not sell. Still dead. (There are 622 listings for more than $500K, and 25 is 4% of 622).
46 Smithridge Park is on the market for $53K. This is $8500 less than I sold one of these for 30 years ago.
1955 Russell Pointe in Somersette. Sold for $893,567 on 11/7/05. At least another $75K in landscaping and interior improvements. Reduced today to $499K.
Bottom? What bottom, Lucy?
Here is an interpretation of why the percent of sales that are ‘distressed” has dropped from 80% to 70%:
Non distressed sellers are realizing that unless they want to wallow on the MLS forever, they need to drop down in price to compete with the REOs. This is exactly the impact REOs have on a market. I don’t make much of the drop from 80% to 70%.
Not while the median continues to drop.
I believe that this simply signals that some non distressed sellers are waking up and smelling the coffee. Maybe having been 3 years in denial is getting tiresome for a few nondistressed sellers.
24 homes listed in Reno today. 10 were foreclosures, 6 were short sales, and 8 were listed as standard sales. 15 of the 24 are listed below the current median. The lower the list price, the greater chance it was a foreclosure or short. And some of the standard sales are homes investors have bought at foreclosure auctions.
“And some of the standard sales are homes investors have bought at foreclosure auctions.”
In other words, these people are trying to flip in this market. Can somebody explain this strategy to me? I’m serious. So you go out and buy an REO. Then, while the foreclosure tsunami continues unabated, you put your brand new purchase right back on the market for more than you paid at auction? Didn’t the price you paid 2 or 3 months ago set the comp for the very house you are trying to flip now?
Can somebody please help me understand what I am missing here.
Flipping houses in a downward moving market. That does seem a bit puzzling.
But then I never was a real estate genius.
Great stats from Guy and Mike. Insightful analysis by CL, BillD, RI, Martin, and Skrapguy. Just wanted to pass on my thanks, and request all involved please keep it coming.
Low end feels like it is stabilizing, but maybe not even at bottom yet. Those attempted REO flips show that there is no sure bet in this market. Feels like above $300k will have a very rough year ahead.
is 10298 morning song in arrowcreek a flip?
Why would someone flip an REO? Could be (okay, remotely possible) that since they can close quicker than the short sellers that some buyer out there will bite. In other words, the investor is betting that they can move the property through the pipeline more quickly, and make a small amount on it by doing so.
newbie, Mourning Song is in fact a flip. The transaction price listed by the Assessor is incorrect. Peter McAllester bought it for $535,500. The transaction is much more complicated than it looks.
longerwalk, the money is in flipping properties bought at Trustee’s Sales, not REOs. There is one very active player out there right now. I’ve just completed my research, and will have a post about it up later today.