This report isn’t very useful. It doesn’t give any stats at different price bands. It doesn’t give much historical data for comparison, outside the graphs (and that median sales price graph doesn’t impress). Still, I thank Guy for putting it out there, so I can see the mindless drivel that the seller’s agent is spewing. Denial ain’t just a river in Egypt, according to many of the whacky prices you can find throughout the MLS.

That said, Sep/Oct 09 will give everyone a false hope that things are shaping up in the Reno RE market. Volume and stats will be up at the low end because of the (theoretically) expiring tax credit and the end of the buying season. Heck, I’d even go so far as to say that we might be near bottom at the <$250k level. Congratulations! Woohoo!

But, OBTW, look at the market above $400k. Jobs are gone. Exotic financing for clerks at Home Depot is gone (no offense to the lurkers in orange bibs out there). Ergo, demand at/above that price point is decimated. No one is left to afford those houses, except the underwater homeowners that already have one. And they ain’t moving. Now, recall that at the top of the bubble, $400k was the MEDIAN.

So, for all the zombie RE Agents out there, please repeat after me: Lower prices aren’t the problem, they are the solution.

Wages just won’t support these prices period!..The selling season is coming to an end…When interest rates go up and they will? That will be all she wrote..This false/propped-up market is on borrowed time..

Just heard 32% of the FHA loans from 2008 are now in default?…

Only thing that does remain consistent is the landslide of coming inventory and job losses..

but YAY dow 10,000 !!!!!!!!!

(deja vu over a decade ago—10k by 2K was my internet screen name in the 1990’s)

Smarten,
Yeah, I guess we all would take a million dollar house, given the choice. Just look at the bubble, when millions who couldn’t afford it went out and got the exotic financing to secure that dream home…which turned into a nightmare.

So, what’s your point? You talk about deals falling apart left and right due to no financing, and then you kinda try to argue that there is demand? If that’s demand — wanting something that you can’t pay for — well, whatever.

I could give a rat’s butt about how many hapless yuppies would love a house in Lake Tahoe, or the more expensive parts of Reno. What matters, is how many can afford one. Perhaps my waxing philosophically was just a bit too poetic to be perfectly clear. No jobs, no credit, no financing = no home sales above $400K, the old MEDIAN. Just because many would like that expensive house, doesn’t mean it’s gonna sell.

Hell, I want a million dollar place at IV too! You wanna call that demand, go for it. As comprehensively laid out by you, though, there ain’t nobody left that can actually qualify to buy the place.

So, demand above $400k is decimated. Put it any way you want, bro.

Smarten,,

excuse me? You think the real problem is the President… or Feds (common taxpayers) are not willing to support the well-off buyers of $400k or above?

I think the “well-off” should let the free market dictate the jumbo financing. I would be extremely depressed to think my tax dollars went to supporting the financing of those Million Dollar homes. Sounds fairly delusional in itself and very greedy.

Of course… if I pay the taxes to support your loan….. the rich man gets his Million Dollar home… banker gets his golden parachute… wall street keeps snorting all of the columbian…. then in the trickle down I will at least have a job to cut your grass. Where do I sign Sir?

In the end… this is not a “high cost” market. It is a severely over inflated market. There is absolutely no high paying industry to support a high costs market. Juicing the jumbo loans with taxpayer money is just more inflation of the market and making it harder for everyday family to buy a home.

Jesus Mary! When in the world are people going to get it into their heads that a real market is demand and supply! It isn’t the government backing loans to create demand. That is why prices have to drop because it was a fraud folks. All inflationary bubbles are a fruad brought about by misguided monetary-tax policies and scrupulous lending practices that were condoned by regulators. Notice how AIG was continually bailed out? That was to save Goldman Sachs. GS would be Enron right now if not for you and me bailing them out. It is disgusting and the chicanery in the housing market must cease also before the market can and will reach bottom.

Another issue with demand is retirees. Most retirees have seen these peaks and valleys and don’t have the time to wait for prices to come back to normal, therefore buying in areas that are priced right. The demand for high end will take quite a while to come back, most retirees wouldn’t expect to live that long!

BTW, very few retirees want/need a 3500 sq ft house. So the market for overpriced, over-sized (above 400K) housing will depend on younger people making the money to afford them. There is where the problem is, as the Reno area doesn’t have enough jobs with high enough income to support the higher end houses.

Its a catch 22 situation, the people that want/need the larger houses can’t afford them, the people that can afford them don’t need them.

Smarten,

Will you ever figure out that the Government’s involvement in all price levels below $417K has made housing unaffordable over the years? What about the person who saved and wants to pay cash? So I guess they should pay the artificially inflated prices thanks to the markets getting stuffed with FHA loans? You say the problem is not demand, but the reality is the problem is false demand being promoted by bogus government intrusion into the market place. This type of crony capitalism is why the housing markets still have a long way to correct. Maybe two to five more years until we reach bottom, which will coincide with the U.S. Government calling it quits with their support for the housing markets.

BB -

Nice to have coaxed you out of hybernation.

My ire is not with the government. I feel the same way as you about banks, the lending industry, Wall Street, bail outs, etc.

All I am saying is that my experience [which I have attempted to share] tells me that there IS demand for SFRs priced in excess of $500K. Part of the problem is that jumbo financing to fund such purchases is either non-existent/unreasonably priced.

To answer your question about the “risk” of a jumbo loan going under compared to that of a conforming loan [going under], I see the two as being about equal. Would you say that the “risk” of a $417K 80% LTV loan going under is higher than that of a $100K 80% LTV loan going under simply because $417K is more than $100K? If so, then you’re right; the risk of a $1M loan going under is higher than that of a $417K loan going under [which then begs the question: where do we draw the line?].

But in the real world, the larger the jumbo loan, the lower the acceptable LTV which compensates for the “risk” of a larger loan amount. So although one may be able to get a 80% LTV $417K loan, one may only be able to get a 65% to 70% LTV $900K loan. Assuming the same rigid underwriting and appraisal guidelines are applied equally to both loans, I personally find the $900K loan with the lower LTV to be no more riskier than the $417K loan.

We’ve talked before how the government is trying to “stimulate” the housing market because of its adverse effect on our overall economy. All I was trying to point out is that the >$500K segment of the market is dying in Washoe County NOT simply because of a lack of demand but rather, because: listing prices are in many instances still too high; and, there’s little reasonably priced jumbo mortgage financing available. Although we can’t do much about the former, there IS something the government can do about the latter. I’d much rather see FNMA buying jumbo 70% LTV mortgages than making the bailouts we’ve witnessed.

If you don’t want the government to do anything, that’s fine; let’s let water seek its own level. And while we’re doing nothing, maybe the government should lower the maximum conforming loan amount in Reno/Sparks because the median sales price as dropped so much in the last several years? Or maybe FNMA/Freddie Mac should go out of business? That way there will be even fewer Reno/Sparks homes that sell because without a mortgage, your pool of buyers will evaporate. But that’s a good thing, don’t you think, because anyone that requires a purchase money mortgage to buy a home probably can’t afford the home anyway. Is that what you really think?

Smarten — As usual you bring up some interesting points. But I’d ask a question: Isn’t the fact that some buyers can’t qualify for larger loans just another way of saying that demand at higher price points has dropped? IOW if there are fewer buyers at a given price point, either because of tightening qualifications on the part of banks or lower income or higher interest rates or some other reason, at the end of the day what this means is that market clearing price has to drop. (Or it doesn’t drop and nothing sells).

As for the reason banks are not offering jumbos so easily, all you need do is look at the default rates on jumbos. They’re going up so banks are being more careful with these loans, and they want higher interest rates.

Moreover, I’m not sure regional and local banks have a lot of money to lend at the moment. These institutions are sitting on a lot of commercial and home loans, and that inventory is looking shaky. As a consequence, they’re beefing up their reserves, and the more that goes to reserves means that much less money available to loan out. Commercial Lender may have a good idea of how this is working out in the Reno area.

A $500K house is 9 X the median household income in Reno.

Unless we are going to bring back the NINJA loans, the suggestion that there is real “demand” for $500K houses in Reno (as opposed to wishes, or dreams, or desires, or fantasies) is absurd.

Smarten, Smarten, Smarten,
You now advocate the Fed Govmt to create a market where no viable market exists? Do you not see that this in fact leads or will lead to a bubble, not corrects the bubble we just had? The Fed-controlled agencies of HUD, Fannie and Freddie have allowed banks to ignore the free markets (no one willing to buy the debt on the open market) and go straight to a new/false market (government willing to buy the debt absent any others). In fact, this articificial limit of $417/$729K is currently re-creating another bubble! Same with the 1st time homebuyer tax credit, not unlike cash for clunkers. Look at all the press in the last week of homes flying off the shelf in areas like SD, LA, etc. There is a mini-bubble being created in the low end of the market. What happens when and if these homes start defaulting: another bust? More taxpayer bailouts?

My point at the macro level is govt should be a regulator, legislator, judiciary, but not a buyer of mortgages that the free market is supposed to dictate! The govt and its policies crowded out the entire mortgage market over the years, which is why there are no appreciable buyers of non-govt debt today. The free market experienced a bubble, and now is trying to correct it as free markets do, but the govt is propping up at least the sub $417/729K strata. The problem is not a low govt mortgage debt ceiling, it is that the govt is a buyer of private contracts at all!

(Worried Guy, I agree with you fully, except for ‘crony capitalism’ I believe is misplaced in your sentance. This is a govt trumping free markets issue: ‘crony government’ but not necessarily capitalism en masse.)

It has been said many times before, made famous by Reagan: the government is not the solution, it is the problem!!

Since there is no market for the $500k plus home in Reno, what will ultimately happen to all the $500k plus short sales and foreclosures. How far can these $500-900k homes fall? Will they become the future $300-350K homes??? Would love some insight into the future of these homes.

Future Reno Home Buyer: Will they become the future $300-350K homes???

MLS 90005452 that’s the way it’s shaping up…not sure about anyone else but I’m sensing the price drops in the 400k-550k area are about to accelerate.

Commercial Lender,

Crony Capitalism: Crony capitalism is a pejorative term describing an allegedly capitalist economy in which success in business depends on close relationships between businesspeople and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.

Crony capitalism is believed to arise when political cronyism spills over into the business world; self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals.

Future Reno Home Buyer,
What’s up? You took my name! What in the hell am I gonna do now?!

Seriously, maybe I should just start writing in as Smarten. Like they always say, if I can’t get positive attention, I’ll just try to get any attention. I don’t know why all you poor folks out there can’t afford a nice spread in IV like me, anyway. Must be the President’s fault

Or, since he is suddenly so popular, maybe I should just be the the new Bantering Bear. I’ll see if I can put that other grump back into hibernation. God, I never knew that being an old sourpuss could be so endearing.

I could be Derrick/Big Baby/Johnny/etc…, too, but I don’t think my fragile ego could handle the vicious feedback to my nasty remarks. But, I’d prefer to just dish it out than have CL and company constantly calling me out.

Well, I guess I just pick a new moniker at a time and place of my choosing. Meanwhile, for all the FRHB critics out there, rest assured that the new guy ain’t me. FWIW…

WG, ‘duh’ to me, thanks for the clarity. your original post makes plenty o sense now.

2012, your journey will be very interesting with many variables to watch/consider. Good luck. I think there were many 2009 buyers back in 2008 who are now 2010 buyers and 2011 buyers or are just plain content-to-rent for now. My own experiment of voluntary renting is now in its 4th year. I might just join you in 2012.

2012 Reno Home Buyer:

How the market stabilization plays out in Reno and what it looks like in 2012 is going to be very interesting, there is such an array of factors within the melting pot.

My 2c:

First the low end should firm up and see some appreciation, with demand fed by those forced to downsize plus gov incentives and canny investors realizing it’s going to be the only cash flowing option for them.
The interesting part is how this demand and value appreciation percolates up the price range….really, really slowly. As many have pointed out it’s going to be a long time before households will be able to rebuild their wealth to facilitate any kind of move up market activity. The classic flow of first time buyers to young family to mature family back to retiree is going to be stalled at the young to mature stage but the retirees are still going to want to downsize and may be the only ones that can afford to absorb the equity loss. The big question will be how prepared households will be to suck it up and work thru the equity loss or throw in the towel and let the Banks do their thing, which leads us to employment, or lack thereof. The simple fact that there are no where near as many households in a financial positions to create demand in the 300-500k market coupled with the steady supply from the Banks, distressed and retirees should just keep forcing the prices lower and lower via comps that actually sell.
Then the funny stuff starts, as the higher market starts to collide with the appreciating lower market it essentially crushes the growth until the whole lot settles to an equilibrium the matches the areas income and wealth levels.

2012, I wish I could wait that long…

Interesting times….

Note: all the above should be qualified by the fact that I have no real estate experience, I do however have a horse in the race, we are looking to settle in the area and reading this blog rocks…

2012,
Glad to hear your comments. No worries at all about the outstanding initial name you chose. You must be pretty brilliant. Ironically, it sounds like your are looking for the same place as me, but possibly a bit cheaper and a few years down the road. FWIW, I fear raising interest rates now more than imploding prices, which may influence me to buy next year at a good price, rather than three years from now at a great price.

BB,
Thanks, you made my day.

All,
Replacement cost is frequently raised as a valuation tool, especially on distressed properties. How does one come up with a good estimate for the cost of a new home? Do you just use a flat guestimate of ~100/sq. ft. for instance, adjusting upward for enahncements like upgraded floors, kitchens, and bathrooms?

Any info/opinion on this greatly appreciated, as it will definitely be an aspect of any offer I eventually make.

“To get 3000 ft, expect to pay over 400K. This mortgage meltdown will not change the cost to build one iota; builders will just quit building.”

That’s kind of a silly statement, Sully. With deflation, the cost to build is falling, and builders are also discounting their rates.

Wow. I’m in the same position (planning on retiring to the Reno area in 2012). Don’t worry, I won’t take your screen names. We live in the Sacramento area and like to go up and look around on the weekends. We’ve been tempted a few times to buy now and use as a second home or rental. We will definately do this once we are certain the market bottom has been reached or we find a really great deal. We have looked predominately around Somersett but have recently looked around Arrowcreek too.

As a matter of fact, Sully, I DO know about building. In fact, I have several friends who are contractors, both residential and commercial, and I work in a closely related industry. They’ve been lowering their bids over the course of the past several years. Are you a builder, Sully? I’d bet you’re not, because you haven’t a clue what you’re talking about.

BB, I am a contractor and have been in the industry for 45 years.

Oh well, if my three responses finally show up you’ll be able to see my temperament lowering with each comment.

I count over 110 price reductions for properties in Ward 1, Ward 2, and area codes 89509, 89511, and 89521. These are mostly SFR in some of the nicest parts of Reno, with most properties listed over $250k.

Having used this search over the last year, I’ve never seen so many reductions on one day.

If anyone has any confirmation/denial/additional info, I’d be quite grateful to hear about it.

FutureRenoHomebuyer,
You comment regarding the high number of price reductions caught my attention. I checked the MLS for all price reductions since 10/14 within area #100 (all Reno/Sparks) and found 68 price reductions. What you’re observing may be a glitch with the Trulia system.

Guy,
Thanks very much for that fact check. Still, 68 price reductions in Reno/Sparks since 14 Oct is a very high number in my experience. I would be interested in your take, as you are an RE professional.

If it is a real bump, I wonder if these are the homebuyers that have resigned themselves to the fact that they will not sell in time for the tax credit, and so have just lowered the price accordingly.

Bob C, great ideas for new topics. Enthusiastically second that motion.

There is something wrong when a stucco box in Damonte is DOUBLE the tax rate of a home in Old Southwest.

I’d be happy to put up a post on later today with the new listings that are piquing your interst. Just email me the addresses you are interested in (570 Reno will make my list). I think clicking on my name on this comment will bring up my email, or click my contact info on the bottom of the page.

This article is showing a big increase in building costs:

http://www.reedconstructiondata.com/news/2008/09/us-construction-costs-jump-dramatically-in-second-quarter/

My point was not to say costs were up or down, but to say that builders are having a very difficult time competing with foreclosures, as they cannot get their costs low enough. Regardless of the mortgage problems, they still have to contend with the 78 - 99/per ft foreclosures. So, if it costs an average of 125 - 135/ft to build in Reno, then the builders are hurting big time, as they can only lower their prices to a certain point - after that its work for free. And that doesn’t last very long.

I think I misunderstood what you’re saying a bit too, Sully. I’m sure you’d agree that, during the boom, profit margins skyrocketed. Now, those have been greatly reduced as bids are lower. That, in conjunction with cheaper materials (which I’m sure you’d agree with) have led to a decrease in the cost of new construction to the consumer. I don’t know about Reno, but in WA, the lumber yards, etc. are giving deals on lumber packages for new homes, etc. Also many deals to be had on finish materials. That makes it cheaper for builders to build.

but you are wrong bantering bear

the collapse in commodities has almost
done a round trip and we’re getting close
to even on the CRB index year over year

the 140 barrel oil left a distorted imprint
on peoples minds—yea we have deflated from
there, but that was a BRIEF spike

most of my cost savings are my suppliers eliminating their profit…..just trying to stay
afloat…..cutting each others throats

i can’t see why there is 1 new home anywhere under
construction….why add supply and lose money
in the process

we are in a recession…it is a weeding out process…the strong survive

bantering bear, you are steadfast that this is
a depression (and you have a chance to be correct)
but why argue with everyone when a simple “we
are headed into a deflationary depression” would eliminate the need for you to elaborate any further and bicker how its going to occur

i’m going to continue to live my life…get a nice
casa in reno and believe that this is not armageddon—–so i look for tips on getting
the best current market price and understanding
reno’s neighborhoods , tax structures etc so
i’ll be educated and ready to buy when i fulfill
my commitments here in san jose and can actually
leave

its fun to look at the daily new listings…..
looking for the that one special casa

have a nice evening and day tomorrow

Well, the spam filter just ate my long post with numerous articles about falling construction costs. Perhaps Guy can retrieve it.

BB,
Retrieved. I guess the auto spam filter didn’t like so many links. Sorry about that.
- guy

Banks selling their REO properties for 50% less than the previous owners paid in 2006 or 2007 is making it difficult for new house builders to compete?

Really? This is news? This is dificult to comprehend?

Foreclosures are making it difficult to sell existing houses for what they sold for in 2006 and 2007? Really?

I believe that it is the accepted thinking that a lot of foreclosures generally are not good for the market.

12,000 REOs in a town like Reno starts to become a rich bitch at some point.

Wonder what will happen when the tens of thousands of MIA NODs start to show up.

Every time I sit down and try to analyze where we are in the market meltdown, and where we are going, I return to the huge issue raised by Walter. Where are we in the foreclosure lifespan? If all the foreclosures that are going to happen are conceived of as a lifespan, where are we? Teenage years? 20s? 30s? 40s? 50s? 60s? Moving into old age?

We are in unprecedented times. Nobody has ever seen this many tens of thousands of NODs filed for this many years running. Nobody has ever seen literally thousands and thousands of NODs fall off the screen. Are they going to surface as future TDs? Are they going to disappear forever? I do not believe that the housing market can stabilize until the foreclosures stop. I cannot see how anybody can predict where the market goes from here without answering these questions. And we have no map.

Retiring says maybe new building will resume in 2-5 years. Maybe. But if even half of the missing NODs turn into TDs, maybe not.

Hey Bear,

I know that this may not have much meaning to many of the newer posters here, but it appears that the ‘million dollar house’ at 4271 Dant STILL has not sold, and is now listed at $625K.

I think this started out at $1.1 million, no?

“…it appears that the ‘million dollar house’ at 4271 Dant STILL has not sold, and is now listed at $625K.”

Oh, my. That poor sap Allen “I’m a good fisherman” Murray STILL hasn’t sold that boat anchor. I’d forgotten all about it. He didn’t listen to us two years ago when we suggested he was delusional in asking $1.1 million, and that he could drop the price and cut bait. We warned him that he’d ride the market into the ground and he screamed in opposition, but he did just that. He is so far behind the curve now, that he should just send the keys in. There are far superior properties selling for much less. The neighbors might want to pay attention to the chimney- I’ve a feeling the furniture might be used to heat the house this winter.

Norton,

In regards to the equity markets and commodities issue. If you have noticed, the equity markets are being run up on increasingly lower volume over time. Institutional traders like GS-JPM with public monies are driving short covering rallies. But here’s the catch, a lot of retail traders are in cash this time around. You also have record insider selling in the last year. This is a precarious situation that can lead to vacuum declines a la 1929 and 1987. The question comes down to whom will they sell to once again. Remember 2008? The short covering rally of Oil all the way up to $147 per barrel? What happened thereafter? We are witnessing a redoubt echo investment bubble with public monies. It is a travesty that insolvent institutions such as JPM-GS 1. Are in existence anymore and 2. Using ‘Joe The Plumber’ public monies to perpetuate their own existence. I am certain J.P. Morgan in 1907 would of never approved of the Federal Reserve System if he saw what is taking place right here, right now. GS and most likely JPM should of disappeared when AIG and others went bustola and that is a fact.

Interesting housing forecast for Reno:

http://www.rgj.com/apps/pbcs.dll/article?AID=/20091016/NEWS/91016056

BTW, has anyone heard of Veros?
Maybe I’m glad I’m still renting.

Why should the $8000 first time home buyer tax credit be extended? It has already added $14 billion to the deficit.

I mean, it has to end sometime, right?

I’m sure realtors would love a $15k tax credit for all home buyers, and jumbo mortgages backed by Uncle Sam up to $900k.

Like you, am looking to buy and am eagerly waiting the demise of the tax credit. Prices in the $300k level and higher will drop.

Ya think maybe these agents are saying the tax credit will not be extended to get their clients to BUY NOW! before Nov. 1st? I like the way they are playing the doubting game up to November 30th with the extension so today’s buyers will not wait as prices continue to go lower. It’s all a game.

“Prices in the $300K level and higher will drop”.

You are absolutely right, Move.

And that’s why the tax credit is sure to be extended.

The forces at work to prop up housing values are immense, they are rich and well-financed, and they span many constituencies. As the many wise commenters here have said over and over, in the end all these efforts will ultimately fail. But they will have the unfortunate effect of delaying the inevitable for many many years.

“Prices in the $300K level and higher will drop”.

And, so will all other properties below that level. Some people seem to think that “the lower end has bottomed”. This couldn’t be further from the truth. When a $500k house turns into a $300k house, that $250k house turns into $150k house, and the $150k house joins the under $100k group. All houses’ prices continue to fall.

willk, perhaps a little perspective about Somersett will help you understand the comment. All those houses you now see for sale in Somersett for under $200K? Those houses all originally sold in the $350K-$400K range. Many of them are now 50% down from initial sales prices.
You say that ‘many’ of the short sales over $400K have offers. Well, who knows if they will sell or not. The uncertainty of short sales ever going on to close has been well documented on this blog. Just look at the house of Diane Cohn in Somersett. That house has been showing “pending short sale” for about 5-6 months now. But the larger point, willk, is that they are short sales. As in, the sellers have taken a bath and are trying to convince the bank to accept less than is owed, sometimes hundreds of thousands less.
Somersett has been pretty much a train wreck, and will continue to be so for a long time. The whole place was built on the bubble, and I suspect that that huge majority of people who ‘own’ their house there are upside down. They are not trying to sell, just continuing to pay the alligator on a house that will NEVER again be worth what they paid for it.

As for winter maintenance of a house in Reno, you will have to keep the furnace on.

Downer-

The dollar amounts were not meant to be taken literally, but rather as a figurative example. I thought that was obvious, but I forgot little eyes were reading. Say, isn’t it past your bedtime?

PA posted:

“BB you are now an expert on Chinese economics?”

I suppose, if common sense makes me an expert.

You’re splitting hairs, Downer. You have absolutely no coherent argument to refute my assertion, so you resort to the same trivial nonsense you’ve been littering the blog with ever since you showed up. Time to go into ignore Downer mode again…

I think a major problem with the ‘temporary shortage’ scenario is the about 6,000 NODs that are unaccounted for in Reno-Sparks. As I said in an earlier post on this thread, that is the major wildcard. Can we pretend that these 6,000 houses in some stage of foreclosure just don’t exist?

And it is not “just” 6,000 houses in some state of foreclosure. That number gets bigger every month. The recording of NODs continues unabated. We are looking at another 800-900 this month. Probably another 300-350 TDs.

There will be no recovery of any kind, let alone a V shaped recovery, in housing prices until the loan defaults and the continuing tsunami in foreclosures stops.

Not sure if you are being sarcastic, bob c.

But let me say: I have been following this blog for about three years now, and the consensus has not been wrong yet. In fact, it has become absolutely amusing how ahead of the curve this blog has been with respect to the local market.
I am convinced that the RGJ reporters follow this blog, as well as the “experts” at UNR. They used to just hand out the realtor swill. They have been far more accurate since they started sounding like the people who post here.

Unfortunately, you are all lost little lambs of Bantering (Bent) Bear and Reno Ignoramus (Is Bliss).

The turnaround is now — real time.

1) Record low interest rates
2) Record high government incentives
3) Record low new construction
4) Record high bearish sentiment
5) A growing majority of homes priced at above replacement cost.
6) The govt printing money like it is going out of style (more $$ = inflation and higher real asset prices, and real estate lags the stock market, just like the nasdaq bubble)

Look at all the new posters planning to retire to Reno. We all know that, if the conditions were right, people would be flocking here to Reno. I don’t care about unemployment. Those poor folks got foreclosed upon and they ain’t comin’ back soon.

Who is? California disenchanted. Oregon non-liberals. Folks who just like to have a good time. If Reno sucked so bad, none of you would pay attention to this blog. All of you must like Reno, or you truly are morons.

Bottom line: buy it now while you can. ‘Cuz next year you’ll pay a heck of a lot more in interest and principal.

Bears, your moronic mantra has grown tiring. Don’t fall victim to not being nimble enough to change your attitude with a changing environment. I call the bottom. And it is NOW.

Well if we are at the bottom then:

A. The U.S. Federal Gvt. no longer needs to extend the $8K tax credit after November 30th.

B. The U.S. Federal Gvt. no longer needs to back Fannie Mae, Freddie Mae, FHA loans and GS-JPM-BAC-WFC-C..etc..etc…

C. All shadow inventory can be brought to the market right now and swallowed with new buyers.

D. The Unfederal Reserve can normalize the Federal Funds Rate back to 5-6%. This has been an absolute crime perpetrated on people who saved for years to then be handed zero rates to support a bunch of greedy baseless whores is beyond reproach. The market should dictate interest rates for cash, not an arbitrary Politburo in New York and Washington.

The list goes on-you get the point. None of these are going to happen right now and until they do, we are not even remotely close to a bottom..It is a shame that more people will get wiped out in real estate from all the schemers inthe coming months and years..But look at the Federal Reserve, Gvt. and Banks…These are the biggest schemers of all time and it is dismantling the country.

and the 15K credit proposed for all buyers is
essentially the government decreasing the down
payment by 15K, because the 15K will be added
onto the selling ask price if passed
(make loans easier, for those who don’t have the down payment….isn’t that what got us here?)

japan has had 0% intrest since 1987 (22 years);
they have had to eat the worlds inflation and
people with savings have had to play the currency
exchange to get any ROI as far as interest rate
or get next to 0 investing at home

so if japan is eating 2.5%/year in relation to the
rest of the worlds economies…their waelth is
now 22 years x 2.5% less than it was

they call it deflation….i call it absorbing
the inflation (they deflated in relation to
rest of world)…thats the path we are headed on
….that 2.5 % adds up after 22 years

to get ROI they can buy foriegn bonds, but
then they need their currency to comply and
it has weakened over the 22 year period (although
recently it has staged a rally as have their
long term rates which are 1.5% or so)

btw the nekkei peaked in 1987 at 38,000 + or -
and is what 10,000 or so today

in 1987 60 minutes featured the japanese as the
worlds leaders and they were….they dominated the usa in autos , electronics and manufacturing

india, asian tigers and china will overtake
usa in computer technology so the last frontier
the usa leads in is biotech…we are an aging
society and the young bucks are zooming up on us

Whether one buys now or later depends on several factors. Very low interest rates is one factor. price per sq. ft given construction quality is another. To me, the deciding factor is the location of the house, its siting, and its layout and whether the previous owner put a lot of bucks into the place in additions and upgrades.

It’s very hard to buy at the absolute bottom but if one is within 10% of it then the buyer has done well.

I’m looking to buy in Las Vegas and houses offered near the median price are selling like hot cakes. Houses $250k and higher stay on the market for some time unless they are compelling buys.

“Real easy for all the Cassandra’s out there to be calling for the end of the world as we know it right now. I wonder where they were in 2006? (BB and those of his ilk excluded from that remark, as they’ve got a chronic case of grumpiness. Yeah, they were right on the downturn, but they also missed the upturn, as they will next time around. Even a broken clock is right twice a day.)”

Upturn? BWAHAHAHAHAHAHAHAHAAAA! What upturn? Let’s see- record foreclosures, mammoth shadow inventory, escalating unemployment, stagnant to declining prices- you call that an upturn? Your diarrhea of the mouth makes you look awful foolish. Best to know what you are talking about before you utter such garbage. Get back to us late this winter so we can laugh at you even more than we are now.

Oh yeah- hit up the archives from 2006 before “wondering” where we were. We were right here, on top of things. Where were you? Misunderstanding the situation then much the same as now, I surmise.

Bantering Bear is like all critics. When you cannot do, you criticize those who do.

So, in the interest of full disclosure, tell us Bear. Do you own any property? If so, why? You should have sold in 2005 if you believe your own posts.

If not, will you ever buy? This is key. Perhaps BB just won’t ever have the money to buy, which is why he is so grumpy.

I think all reasonable folk would agree that buying one’s own home can be one of the best investments ever made, as long as it’s for the long haul.

Even in this historic crash, prices have only reverted back to 2002 levels, at worst, with a few insignificant exceptions like condos in less-desirable parts of town.

I’ll freely admit that the fed govt. has long subsidized homeowners with the mortgage interest tax deduction. Like it or not, that is not going to end anytime soon. So, as long as you think you can buy a place near replacement cost, and can hold it for 5-10 years, why wouldn’t you avail yourself of that incredible financial incentive?

If BB and his acolytes think it is not a good time to buy, and it never will be, then why do they even follow this blog? If there are conditions under which they would buy a property, then they should clearly define what those conditions might be.

Otherwise, they are just blabber-mouthed bears that do no one any good.

1)Homes are selling for less than replacement cost.
2) It’s cheaper to buy than rent.

Please, can anyone try to refute this?

I reckon it matters a hell of alot whether one “one owns property, does not, has plans to buy, or wants to rent for life…” It goes to the root of this very blog. If you cannot back your daily assertions up with actions, past or present, or at least with future plans, then you are just a blabbermouth. Actions tell the rest of us where you actually stand, not just where you say you stand. Smarten, for example, has fully disclosed his opinions in quite personal detail and his specific actions as a result of those opinions. This gives him solid credibility in my mind, and his posts have been invaluable.

If you want to hide behind personal attacks and non-sequitors, no one needs to refute your arguments, as you obviously have none.

BB- Thanks for the complement, and I’ll take it as such, but I’m happy to watch this one shake out. I happen to agree with RB on a lot of what is being said.

BTW- if you really had some skin in the game you’d let us in on it - the ‘As far as my situation, go back into the archives, newbie, and figure it out’ BS is ridiculous, as nobody has the time to read through 2006 just to figure out what you did back then.

Besides, it doesn’t tell us what your doing now. Blabbermouth seems to fit IMO.

No blogs for RE in WA?

I don’t think you’ll be missed, PA. I can’t ever recall you offering anything even remotely insightful. You might try Active Rain, or another of the shill sites. I’m sure you’d fit right in. They’re big on happy talk, saying things to make each other feel good, putting the blinders on, you know- sheeple food.

One issue the would be bulls are missing, is the fact that Reno has just experienced a classic real estate BUBBLE. Now, bubbles come and go, but all Bubbles share 2 common traits.
1. The outrageous prices NEVER return(nominally).
2. Before median price is restored prices ALWAYS OVERCORRECT.

Now I believe, 180K is about par for Reno, and come 2013, this is more or less where the median will be. However, between now and then you have to allow for said overcorrection, so median is definitely going to drop further. What’s really frightening though is this will occur in the face of upper end compression.
Houses that sold for 600-700K in Somersett, will sometime in the next 5 years years exchange hands at least once, for about 300K.
I also find it amazing that anyone seriously thinks there is inflation in our near future. If only we could be so lucky..

It looks like we’ve acquired some desperate agents trying to drum up some buying buzz, along with some recent unfortunate homebuyers who are trying to justify their decisions.

Briefly, the prices don’t match the wages here. Sorry, that’s the simple truth. There is good news: our economy is diversifying away from low-paying, low-education casino jobs. Bad news- its being replaced by low-paying, low-education retail jobs. Local governments, by givng STAR bonds to (duh) stores, and the state stripping away Millenium Scholorship and other education money will keep Nevada a “low-pay-can’t-afford-a- $300,000-house” state.

Second, low interest rates have not worked up to now to create a buying binge. Third, replacement costs are irrelevant…too much inventory trumps that and will cause further price drops. And buying is not the bargain over renting it was anymore. Rental rates are falling, and Washoe property taxes, at least where I live are much too high.

I tell everyone I know…wait 2 years to buy, at least. You’ll save $$$.

“Briefly, the prices don’t match the wages here. Sorry, that’s the simple truth.”

What prices are you exactly talking about? if you are talking about the 250k> segment then you are partly right.

if you are talking about the 200k< segment then you are flat wrong. It’s pretty obviouse that the 200k< market HAS bottomed

“I tell everyone I know…wait 2 years to buy, at least. You’ll save $$$”

and how much do you plan on “Saving” when interest rates on a traditional 30 year fixed rate mortgage are at 7.5%?

and with the banks holding many foreclosures off the market, inventory levels getting VERY low, what kind a house do you expect to buy?

oh yea, what about when inflation increases considerably in the next 2-3 years? do you have an answer on that too? will that make houses cheaper? lol

Realize this…If commodities and equities start rolling over in a pivot point continuation of the collapse in 2008, the Federal Reserve and U.S. Treasury have nearly used up all of their ammunition to stem the tide. This is quite a scenario building here for the deflationary outcome. The next move could be the wipe out acceptance phase. We are already at zero rates and the Kill The USD trade is not a never ending answer. Just right now, the overvalued currencies vs the USD are sending economies into a slowdown as a result due to a reduction in exports. It is an echo bubble redoubt that is set to burst. This will have dramatic results for real estate valuations going forward once again as has already been witnessed.

J Rusin said ‘I tell everyone I know…wait 2 years to buy, at least. You’ll save $$$’.

Someone before on this thread hit the nail on the head (Future Reno Buyer?)and that is buying that special one of a kind place MAY NOT BE AVAILABLE in two years.

Put another way - most everyone talks about house buying like your buying a Chevy - maybe you all buy Chevy’s- I’d like to buy a DeLorean. Therefore the difference 8k in first buyer incentives, or 1/2% in financing becomes meaningless compared to getting what I want. (maybe it was Smarten that pointed this out?)

Are there really that many sheep buying?

The CPI number is being run on energy related components. The entire point of bringing the USD down since March is to massage CPI numbers with those energy components to fear the money into asset inflation and feed the beast. Zero interest rates are the primary culprit. Either way, when reading the CPI you have to ask how many Gvt. sponsored banks (GS-JPM) in conjunction with spec HF’s ran Oil up to juice CPI numbers? All is not as it appears. These guys are pulling every trick in the book to avoid deflation print numbers. They are going to happen nonetheless as GDP in the U.S. goes negative in 2010. BTW..the change in M2 has fallen to a slim 1% growth rate in the last six months. This isn’t what you would normally see in a true inflationary/hyperinflationary environment. The Federal Reserve has increased the monetary base by 1000% since the last 3 months of 2008, but it has been flat since that time. Normally that would result in those deposits being multiplied nine times through the fractional reserve banking system, but it is not happening. Why? The fact remains that banks remain unsound at this time and want to collect on loans rather than lend. This is credit being destroyed in the system as loan volumes are collapsing along with consumer asset prices. The money multiplier has gone to zero along with money velocity. This is decisively deflationary as the Fed is just flat out losing the battle.

RE: “2) It’s cheaper to buy than rent.”

Well, prices can’t go up until local incomes support the mortgage qualification requirements, so, if that rent/own imbalance remains, rents will fall.

“Can’t we get back to beating up on Bantering Bear? At least that had some truth to it.”

If that’s beating me up, you’re about as weak as they come.

Reno Ig,

I want that house but it is too rich for my blood. Would be complete suicide unless held onto for 10+ years.

There was a bank owned that came up today in Old South. Looked pretty interesting. Called the realtor and it looks to sell for 170/sf. This is a common case of “hurry before the tax credit runs out”. Pretty smart of the Bank IMHO. Pretty dumb on the buyers part though…

These realtor shills can’t lay a glove on Bantering Bear because he has all the critical facts on his side. High levels of unemployment, independent appraisals now required, 20% down payment, fully documented mortgages, strict limitations of amount of mortgage given available income, consumer confidence is zip, etc. Yeah, houses are selling below replacement cost but the cost of new homes has fallen as well. The fact that bank on letting some folks stay in their houses even after they stop paying the mortgage means there is a back log of foreclosures in the pipeline in the boom areas.

As for comparing USA to Japan, there are a lot of differences between the two countries and I doubt that the USA will repeat what happened to Japan. Our population is growing for one thing.

Now is not a bad time to buy if you find that extra-ordinary house that is priced like an ordinary house. AS the realtors love to say, your “dream” house..

I never thought I’d see the day where I got something out of Johny C/Derrick’s posts while BB’s were flat and unsubstantiated name-calling. Johnny at least offered his rationale for buying and cost/rent metrics for his business plan, thank you.

****

Many of you are spirited debaters in bottom calling. I submit you all may, for the most part, be correct if you correctly identify the strata of home in your analyses. Those calling ‘bottom’ appear to be doing so in the sub-$200K strata while those calling ‘bs’ appear to be focused upon the mid and upper end.

Bear with me a moment here. Most posters here are familiar with the concept of a ‘yield curve’, or a graph of the current market yield of the 2, 5, 10, 30 yr UST bonds/bills. Quickly, a normal YC slopes upward to the right as typically 30 yr rates are higher than 2 year rates to compensate investors for future inflationary risks. At times the curve is steep where the longer the maturity, the more the rate needs to be to attract investors. At times this is flatter where investors demand not as much increased yield to hold the bonds for a longer duration. Also, the entire curve can stay sloped the same, but shift higher or lower en masse.

Stick with me. Now think in terms not of interest rate yields but of housing prices. What we went thru in this past bubble was, I submit, both a shifting upward and a steepening of this supposed curve. All houses went up in value (shifted upward), but particularly in the high end homes (sloped more steeply). Now, in this bust the entire curve has shifted downward for sure, but particularly so in the low end. We now have a fairly steep ‘housing’ curve with the low end having dropped so fast due to reasons such as subprime lending and the relatively lesser cash flow abilities of lower end home buyers faced with job losses. The lower end of the curve has dropped to such a degree where ‘affordability’ has crept back in to that end of the housing market, compounded by $8K tax credit, FHA loans, and foreclosure pricing. Simultaneously, the high end is down certainly, but it is not down enough to create the demand we are seeing in the lower end. Additionally, prime and Option loans are just hitting the fan, job losses have reached middle and upper middle classes, and financing for jumbo loans is difficult at best. Thus, the $500K end is effectively on life support while a tremendous amount of resales are occurring in the short end.

Thus, Johnny C and others can buy in the low end assets that cash flow and/or they are OK to take the risk of further declines as they perceive most stress in this end is behind them. However, many others are not OK to take the risk of further declines in high end strata, because that end of the housing curve is perceived to still be too high with too much risk of the curve flattening out.

Now that everyone has that picture in mind, anyone want to venture a guess what shape and level the housing curve will take this winter? 2010?

Thanks Sane Economist and Worried Guy…good stuff the think about…

BB,
You made … my point.

FRH,
Thanks for the compliment.

BB,
First you call me a hater, now hypocrite?! Huh? Where on earth do you get this from? You make a blanket statement “Being in the industry, as you are, it’s no surprise you share such hate and vitriol”. This logic is ill suited for a thinking person of your heretofore evidenced caliber: are you saying the commercial mortgage market is inherently hateful and vitriolic, or are you attempting to tell me, whom you’ve never met and clearly misunderstand, that I carry extreme adverse social and personal traits?

FWIW, there’s exactly no one on earth that I hate. Find one. Given how you adamantly defended yourself when people incorrectly attributed words to you in the past, how would you suggest I now act? Please substantiate that I am hateful, vitriolic and hypocritical, or otherwise retract your slanderous assertions.

Re-read my comment above in which I observed Johnny/Derrick gave us rationale and reason, with numbers to boot, so we could all glean something we obviously care about: Reno area real estate. I contrasted his posts to those of your own that gave us childish name-calling: “Downer”, “Raging Bullsh!tter”, “you’re a phony”, “newbie”, need I go on?

I’ll write the same thing I wrote the last time you and I got into a written scuffle, namely I often derive a good bit of data from your posts and enjoy your point of view except when you devolve into personal attacks. I find they cheapen one’s argument where facts and logical debate would otherwise strengthen it. Thus, I actually derived good input from Johnny / Derrick instead of you, an observation which I mused was something unexpected.

****

Finally, others today have challenged you to share a bit with us on your own personal situation so we know the backdrop to your comments and so we can glean some constructive information on the Reno real estate industry. You quipped they should go back and read posts from 3 years ago. Others commented they don’t have the time to do so. Consider saving us all the time and the necessarily improper assumptions that your thoughts and situation in the past 3 years has remained entirely static, and pray tell what your skin in the game is in Reno real estate? [Smarten, its coming…] We’d all like to learn from your experience and observations.

I’m not sure why, but I welcome your responses.

Bear,
I took the liberty of reading some old posts, as you requested in one of your rants, and as referred to by CL.

These occassions gave me confidence that you probably are BanteringBear, although I had begun to wonder. You seemed much angrier and more personal than you were before your break. I was mistaken. You were angry and launched personal attacks three years ago. So you are probably the legit Bear.

On a number of occassions back then, Diane Cohn implored you to stop the personal invective, or she would terminate the thread. It had a salutory affect. You stopped. You seemed to have respect for Diane. Has her absence caused you to regress and step up your vicious personal attacks?

Could you take another look at your postings and possibly rethink your approach? I value this blog incredibly. I don’t want this great resource to go away or get devalued.

BB, for the sake of yourself and the rest of us, stick to the facts and keep up your insightful commentary, and stay away from the personal attacks.

Thank you CL. I share your views concerning different strata of the Reno/Sparks residential real estate market. And that was my point earlier. When one makes a blanket statement concerning the “bottom” of the market and one doesn’t define his/her definition of the term, the statement is meaningless. To coin a phrase, one man’s bottom is another’s spouse.

In response to Martin’s earlier question: “how come everybody who suggests that the bottom has arrived absolutely ignores the thousands and thousands of houses in the foreclosure process?” There is no ignoring Martin. Exactly what strata of the market are you talking about when you make the assertion there are thousands and thousands of houses in foreclosure? If those foreclosures involve mortgages in excess of $350K and I’m a buyer in the under $180K strata of the market, what difference do they make to me?

And when we accuse commentors of ignoring the “thousands and thousands of houses in foreclosure,” how about those who ignore data such as the increased median sales price [for how many months?]; the increased number of monthly sales; the dropping of DOMs; the increased absorption rate; the leveling off/increasing of the sales price/square foot; etc? You see, we tend to rely upon whatever data suits our personal beliefs.

Finally, a personal request of BB. Remember your New Year’s Resolution? For the first six months of this year I felt you were making tremendous progress and I for one appreciated it. But lately, I fear you’ve gone backwards. FWIW, you don’t need to take comments directed to you so personally. You don’t need to respond to every Tom, Dick, Harry or Derrick who challenges one or more of your comments. And you don’t need to “hammer the last word” on an argument. Chill out a bit.

Future posted:

“On a number of occassions back then, Diane Cohn implored you to stop the personal invective, or she would terminate the thread. It had a salutory affect. You stopped.”

She wasn’t only directing that towards me. You drew the conclusion you wanted to arrive at, and you know it. If you want to draw my ire, get in line, but quit misrepresenting the situation. As a future buyer, I’m your friend. But get on my bad side, and you won’t enjoy me.

All of these attempts to coerce me to change my behavior do nothing. Until you guys get a spine, and address the real problem- haters like RagingBullsh!tter, Downer, Derrick, etc., piling on me like little schoolyard bullies who only have strength in numbers, I cannot take any of you seriously. It’s rather pathetic how you jump in with the pack of wolves.

Welcome DocMD,
Which recession is most analogous to our current, in your opinion? You mention “post-bubble credit collapse”. I see very few credit driven recessions but the Great Depression and I believe the 1909(?) one (early 1900’s). If possible, what happened to the housing market in the 1-3 years immediately following the bottom and what effects did inflation and rates play? Much thanks.

BB -’As a future buyer, I’m your friend. But get on my bad side, and you won’t enjoy me.’

More threats??? get help dude.

You tried to take your best analytical/ psychological shot at me earlier.
There wasn’t anything you surmised right. Not surprising though.You have deep ingrained preconceived notions.

So how about my turn?

You’re mid 30’s.

Raised by your mother.

Had to move a lot, renting and low income jobs being the biggest reason.

Local HS, Community College, never graduated.

Above average testing, but never a lot of guidance, mostly due to not having a father figure around.

In and out of trouble, even though your teachers felt you had tons of potential, none would commit.

Moved from job to job- Reason; each previous employer not respecting what you felt you really brought to the table.

No friends moved with you.

Currently trying to connect with the happiest times in your life- growing up in Reno.

Recently divorced- spent the last three months incarcerated from a restraining order, therefore not able to post.

No skin in the game, but consider yourself an advocate for the first time buyer/ blue collar worker

Now, you ask yourself - why is everyone such idiots they don’t listen to me?

‘I could sit next to you at an Aces game, and you’d think I was the nicest guy you ever met. Funny, really’

Do you really believe that? Step away from the bong. Stop drinking the Koolaid. Delusional comes to mind.

Or - am I as wrong about you as you are about me? Hmmmmm. Really makes for an interesting thought.

Neither of us know shit but surmise to?

Take a break.

BB

I think you should take a look at the business cycle.
let me spell it out for you or anyone not sure.

peak,recession,trough,recovery in that order

if you take a look back 100 years this cycle has ALWAYS repeated itself, and will do so again, and again and again and again.

further, the only way for the Real estate market to stabilize is to let supply/demand come back in to balance, then the market will discover its equilibrium price, unemployment will slowly come down AFTER the recovery. the reason it comes down AFTER is because once the economy starts recovering most companies will RAISE the hours of the employees that had their hours cut. That is why the unemployment rate will not see any improvement, but the average work week will (leading indicator)

With the median price at 180k the average person in reno CAN afford to buy. Add in an 8,000 tax credit and its even sweeter. I also believe it will be extended.

I could draw a graph with x,y axis but Im assuming most understand this to be elementary economics.

I don’t need for you to spell out the business cycle for me, tired. If I want a tutorial in economics, I dust off the old college text. I don’t believe we’re at the trough- we’re still going down. The road to the bottom is never a straight line. We’re in a dead cat bounce period, for lack of a better term. Familiarize yourself with Isaac Newton and the South Sea Bubble.

And, when I mention recovery, I am talking about housing. Housing doesn’t lead an economic recovery, it follows it. Housing cannot recover until jobs do. I don’t care what the median affords, if there are record unemployment numbers, it’s bad news for housing. Put that in your economic text and smoke it, shilly.

…still renting. Money in the bank and in gold from when we sold our house 3.5 years ago in Elko. Looks like we won’t be buying this year. Why? We both need to see how secure our jobs will be in a year. We also wonder about the impact of that “shadow inventory”.
At least rent is cheaper than when we moved here.

“peak,recession,trough,recovery in that order”

This has been true historically, and a chartist would project it into the future. However, the FED and the Administration + Congress are causing fundamental changes to the structure of the economy, which are so dramatic that reliance upon historical modeling is not helpful. I foresee a disintegrating dollar, bringing devastation of savings to those with U.S. currency-denominated cash equivalent funds and accounts; unemployment increasing — and the true unemployment level is several points higher than the government states, because those who have quit looking or are working part-time only are not included; and an increase in all taxes, as state and federal spending continues to increase.
Globalization economics has resulted in raising the standard of living of emerging market nations on the backs of American workers, whose standard of living will decrease continuously in future years. We are destined to have two classes of Americans–the very wealthy, living in suburban gated communities, who have enough net income or resources left after taxes to sustain their lifestyles, and the lower level, who will have so little left that they shall live modestly on tight budgets, in condos, apartments, and small detached homes on small lots. There will be no middle. We are headed toward what Mexico is today, with enclaves of wealthy in secure suburbs of places like Guadalajara and Mexico City, and millions of the masses living from month-to-month everywhere else. This is unfortunately the politically incorrect truth of the matter, I wish it weren’t so.
I don’t whether to buy now or not, sorry, it will take a wiser man than I to make any helpful conclusions on that point.

Move, where are you currently located? Silicon Valley?

Prior to the boom (2003) Reno real estate was almost flat lining, very slight year over year increase. In 2003, it started to move rapidly upwards. Zillow doesn’t go back far enough, but if you find a house that was built before 2000 and go to the ten year chart, you will see a very,very slight upward trend in pricing before 2003, not near enough to keep up with inflation.

NAR claims real estate increases 6% a year and beats the stock market, blah blah blah. All you have to do is look at how far the median has fallen in the last two years here, to see that isn’t true.

“Countries with the Biggest Gaps Between Rich and Poor”

“No. 3 U.S.”

“The share of income for the top percentile of Americans was 23.5% in 2007, the highest since 1928, according to Emmanuel Saez, a Berkeley economist who won the prestigious John Bates Clark Medal in April. Income for the top 0.01% hit a record-high 6.04%. And the recession may be exacerbating income inequality.”

http://finance.yahoo.com/banking-budgeting/article/107980/countries-with-the-biggest-gaps-between-rich-and-poor

“peak,recession,trough,recovery in that order”

Tired-

You are making a misinformed assumption that this is your typical post WWII recession. Almost all of the 10 recessions since WWII have been fed-induced excess inventory recessions caused by the Fed raising rates. These were more shallow, shorter term in nature and indeed more of a “natural business cycle”. Again, the major difference with this recession vs. all other post WWII recessions is the this is a post bubble credit collapse rececession. WE ARE IN THE MIDST OF A SECULAR (10-15 year) CREDIT CONTRACTION. There has been 14 Trillion in household wealth destroyed. We may get a few quarters of reprieve due to the enormous amounts of “medication” that has been administered to the patient. However, this recession has all too much in common with the 1837, 1873, and 1929 time periods.

A must read is the attached article in the New York times from last weekend which will get a better understanding of why this will likely not end any time soon. It should also clear up why we are not getting inflation (despite enormous federal steroids into the system)! And if we are getting inflation then we are getting deflation (which is not good for any kind of debt as the cost to service that debt increases incrementally).

DOC

http://www.nytimes.com/2009/10/17/business/17nocera.html?_r=1&emc=eta1

umm the CPI DOUBLED in the last 2 months, and is widely expected to increase AGAIN, when they report the numbers on novermber 18th.

those of you who don’t think we have inflation creeping up on us already better think again.

the most unique thing i’ve noticed is
the perma-bulls i know are seriously doubting
this recent spike and recovery (wealthy, successful bulls)

tired, we may well have. But, how do you figure true inflation when the CPI basket has been changed so many times in the last 20 yrs?

Computers are cheaper because they are faster, even though the price doesn’t reflect that. Homes were going up too fast, so take them out and use rent instead.

You need a super computer and very good memory to see where we really are in relation to historical norms.

Tired,

Let’s not only miss the forest while looking at the trees. I would not interpret a doubling of CPI from very depressed levels as a signal that inflation is ready to rear it’s ugly head. Inflation is not in the cards in the near term as the personal savings rate (% of income saved by all US consumers) has gone from 0% in 2007 to 6.5% and is headed towards double digits. This will ultimately be a good thing for the economy years (creating pent up demand) from now but will cause a much longer period of economic malaise than most believe. This coupled with a unemployment rate that will go higher than 10% and most importantly a change in mindset of the US consumer from a frivolous society to one one of a frugalality will have long lasting effects. I am not suggesting that property deals cannot be found (because they can) but let’s not get caught up in a near meaningless uptick in CPI. I would be careful to mistake goverment steroid induced growth for real organic growth–>big difference.

Separately, if it is the stock market move that has the bulls feeling good then don’t forget this could very well be a massive head fake. Japan’s Nikkei stock index was at 38,000 in 1989 and has enjoyed four 50%+ rallies over the last 20 years and is still down 70% from 1989 levels…ouch.

High end capitulating?

Fresh out today from Mitchs list:

mls 90016075. Zillow has this at 2 mill

Bank wants 900,000 = 133/ft built 2005.

SH from Alaska - I ask myself the same question; What’s wrong with this place? I had lunch downtown today and was thoroughly impressed with the food, the service, and with everyone around me that I sat with.

The climate’s great. Proximately to the Bay Area is perfect. I have some business in Carson City Friday. Lower taxes,, etc.

So I ask - what’s the problem that is keeping the Reno area down? Poor Government? Unabated building? Unestablished downtown? Legalized gambling and Ranches? Isn’t all of that just less government?

I’m like you RH - I see Reno as a great place. How many others do? Good question.

I’m gald to see the positive comments on Reno. Most posters and lurkers here likely agree, or they wouldn’t care enough about Reno real estate to read this blog.

It bears pointing out, however, that this is in contrast to many posts from Guy’s thread of 18 Oct “TICOR Title Charts for September.” Lots of Reno bashing in that thread, led by Dirtbagger and thoroughly supported and backed by DBNO, among others.

So, which DBNO are we dealing with today? They one who hates Reno and thinks it’ll never compete with California, or the one that “see[s] Reno as a great place.”

Maybe that’s what’s wrong with Reno. Mixed up folks like DBNO who don’t see Reno for what it is — a great town in a great location with great possibilities. It ain’t the only place in the country with significant problems in this economy, but it will eventually come back.

Thread: Ticor Title Charts for Sept:

Note: Dirtbagger started a rather long discussion with a long diatribe (20 Oct, 2:17pm), bemoaning the subpar quality of Reno’s labor force and railed against Reno’s “Casino Mentality.” He further commented that Reno locals were angry and resentful against outsiders. He let all know he was looking forward to leaving Reno and moving back to Southern California. He began his soapbox by defending DBNO against BB, which may partially explain DBNO’s follow ups in support of Dirtbagger and against Reno.

DBNO (20 Oct, 6:03pm): “Haven’t the statistics that have been shown the last few days made anyone realize this will always be the last place in the Country [sic] to recover from the recession/ depression unless you change your attitude????……
As Sully suggests, I may do a lot more research as to the labor pool before I relocate to Reno.”

DBNO (20 Oct, 7:10pm): “Sorry but I just read my business future in Dirtbaggers [sic] experience and I’m going to look closely at not making the same mistake.”

Finally, following my opinions regarding Reno, DBNO replies:

DBNO, 20 Oct 7:49pm:”Well there’s your demographic. Hope he can procreate.”

Hi,

Well, it sure is not just Reno having problems these days. Yo might feel better by comparison if you look at Detroit.

A few years ago if I were looking to move south I’d have gone elsewhere since housing in Reno was so inflated. Now the pricing is such that I’ve decided Reno is the place. You are getting back to where another plus Reno can tout is “affordable housing”. I’m just one person but I am sure there are others. It will take time but prices will stabilize eventually. I’d rather see a stable market then the crazy bubbles that always end with a huge hangover. Especially since it always seem to be me they want to tax to fix these messes!

Steve Herschbach