Thank you to our friends at First Centennial Title for providing the monthly Market Condition report below.
November’s report shows that many of the metrics (Supply, Withdrawns, Percent Selling, etc.) have held steady for the month. However, regarding prices the report’s overview states:
“Activity gradually slowing. SFR and Condo prices posted declines which were somewhat greater than expected. This trend supports the notion that residual weakness in price is still present in the market. In most Western markets, prices have stabilized with upticks occurring with greater frequency.”
November’s median sold price for SFRs across Washoe County was $183,000; down 1.1% from October’s median of $185,000, and 2.1% from September’s $187,000.
Click on the report to enlarge:
Recent MCR reports:
4 comments
I have a scenario that I hope some of you will offer your opinion on. The first part will be my circumstances and the second is my opinion about the market upon which I base my question.
So, I live in a house worth about $330k maybe a little more according to Zillow (paid $390k). We owe somewhere around $230k. Our equity came from selling an older home in southwest Reno in 2004 that we bought in 2000. . My wife and I can afford the house and have no financial issue pressing us to move. 30 year fixed. The house is large about 3500sq’ and under utilized. We have a rental in town we owe about $100k on in a so so neighborhood.
When I do a search in NW Suburban Reno for homes with 4 or more bedrooms I find a ton. However, digging deeper I notice that most have a status of active/pending/shortsale. This I believe to mean the house was listed at a price someone thought was good and has an offer. Ultimately however, the deal probably won’t close due to the banks being uncooperative with short sales. I see this listing to be a future foreclosure as well as future downward pressure on the value of my current home. The rest of the listings are overpriced active or bank owned overpriced and might as well not even be on the MLS. What I read is there are actually buyers for reasonably priced homes which there aren’t many of that can be bought and closed within 30 days.
What would you do? Stay and do nothing? Sell and move to appropriately size rental in so so neighborhood and almost pay off that mortgage etc? Sell and rent? It seems like if we sell, downsize and buy in the same neighborhood we’ll just save about $450 a month and get half the house. I know I said the house is under utilized but it seems like trading in an S class Benz for a Chevy Malibu and saving $250 a month.
I look forward to hearing your thoughts. This blog has been an interesting read for me over the years. Thanks.
NRM -
First of all, thanks for sharing your particulars.
I say DON’T sell. You’ve told us there’s no financial need to sell either of your properties and you’re looking at a miserable seller’s market. So why? You state you can save some money [assuming you’re able to sell your principle residence for more than what’s owed/costs of sale] with a less costly mortgage, but you also state you’re able to handle the more costly mortgage comfortably. So why?
You haven’t shared the particulars of your two mortgages but I have this sneaky suspicion you can refinance one/both and probably realize the same $450/month savings by downgrading to “so, so.” You should be able to secure a 4.75% 30 year fixed rate loan on your personal residence [with no points] yielding a monthly P&I payment of under $1,200, and a 5.375% 30 year fixed rate loan on your rental [with no points] yielding a monthly P&I payment of under $560. And if you intend to definitely sell one or both properties within the next 5 years, you might want to explore a 5/1 ARM [the rates should be even lower].
So how much more per month than $1,760 are you currently paying in monthly mortgage payments on your two properties?
Smarten, thanks for taking the time to respond. I think I needed an outside view to bring me to my senses. You’ve pretty much got the mortgage balances spot on. We already have the 4.75% on the principle and secured 5.875% on the rental about a year ago so nothing to do there either. We actually have two other rentals with similar rates. They’re all 30 year fixed as well with rents covering the mortgages. The $450 savings I spoke of was by selling our principle and buying a smaller cheaper one in the same neighborhood. A replacement just isn’t cheap enough to make it worth it. I think the motivator is the potential downward pressure on the house not so much the $450 possible savings. I’m thinking we’ll be off another $40k in equity over the next year. It’s the catch a falling knife thing. I’ve always looked at our houses through the dollars and cents glasses instead of a place to live. It seems to have worked out okay for us but it’s hard for me to change gears. I think I get tired of all the houses some times. Rentals can be a pain in the #%^!@# which sometimes gets me thinking start dumping these places including my own.
NRM - Another point to consider is that real estate has very high transaction costs. Even with a refi you have to consider the costs. If the costs of selling and then buying and getting another loan are 5%, which seems reasonable, then at $250/month it will take you about six years to break even.
This is actually similar to your idea of trading in the Mercedes for a Chevy Malibu. When doing this you would often end up paying transaction costs by selling the Mercedes at wholesale and buying the Malibu at retail. (IOW the trade in value of the Mercedes is less than what you could buy it for from the same dealer).