Ninety days have passed since I took a snapshot of the Pendings on our MLS. Readers may recall I followed up with a check of the status of these “pendings” at 30 days and again at 60 days.

So how have the pendings fared after ninety days?

As has been the case with the 30- and 60-day observations, those pending listings with a status of “Active-Pending-Loan” continue to exhibit the highest probability of closing – with 88 % having closed within ninety days.  On the other end of the spectrum, those pending listings that had a status of “Active-Pending-Short Sale” had the least probability of closing – with only a little over a third (36%) having had closed, even after three months.  It should also be noted that after 90 days, 38% of those pending short sales had dropped out of escrow; either by being placed back on the market as Active (19%) or taken off the market completely (19%) – probably destined for foreclosure. 

Bank-owned properties and short sales continue to be the most popular types of properties for buyers – with 14% and 22%, respectively, currently under contract (pending). (see table above).  Also of note, is that 58% of the bank owned properties on the market three months ago have now been sold.  Bank-owned properties continue to dominate sales in this market.

This post will be the last installment of tracking these listings.  Data courtesy of the Northern Nevada Regional MLS (NNRMLS) – July 2008.

Today I went out with some buyers looking in the $200K-$250K range. Like all internet shoppers they sent a specific list of properties to see. Of course they’d picked all the best deals, which meant that half were in escrow by the time we hit the pavement. No problem, I found some other best deals for them to consider. Here are three of the particularly interesting properties we looked at:

Lots of opportunity out there right now if you’re willing to contribute a little elbow grease! If you want to make an offer on any of these properties, please contact JoAnn at 877 963 4263.

120 licensed Washoe County real estate agents and brokers have left the business since January of this year, according to the latest numbers released by Nevada’s Real Estate Division.  Today’s 2,984 Active licensees for Washoe County represent almost a 4% decrease from January’s 3,104 licensees; and a 7.4% decrease from June 2007’s 3,221 licensees.

However, the rate of attrition for real estate agents and brokers in Washoe County is less than that for the state as a whole.  In June 2007, 28,763 Nevada real estate agents held active licenses.  Today there are 25,986; a decrease of 9%.

See all the numbers here.

Or it could be Orinda, Montclair or maybe San Mateo. But the point is, my family and I are relocating back to the Bay Area. The hubby’s small company is doing great, but it’s based in San Francisco, and telecommuting is no longer working. We have to go back.

But don’t worry, the blog will go on as always. Guy will continue to be your local Realtor resource, and Mike, I’m sure, will continue to compulsively follow foreclosure data all the way to market bottom. I too will remain involved, reporting from your feeder market, which may add an interesting new dimension to the mix.

Guy and I have also teamed up with Realtor JoAnn Corriera, a ten-year veteran in our local market with an amazing reputation for honesty, integrity and getting the job done. We are fortunate that the blog generates many inquiries about buying and selling from readers, so she will help us get back to everyone in a timely manner. We may even coax her into blogging with us on the site. Still working on that one…

So now I get to play the role of delusional seller in front of you all and either sell or rent my big over $500K Somersett house that I have a less than 1% chance of selling in this market. And since we need to move in July/August, whatever we do needs to be done fast. This should be interesting.

BTW, yesterday was Guy’s birthday (ah yes, 1977, a fabulous vintage). Please join me in wishing him a happy birthday, so that I can feel less guilty about posting this a day late…

I have a client who bought a brand new home in South Reno in 2005. At the time we thought she was getting a great deal in a great location at a 2004 price, thanks to some flipper that fell out of contract with the builder because he couldn’t secure another buyer fast enough. So in goes my client, and everyone’s happy.

Fast forward to fall 2007. Her adjustable rate mortgage resets to some horrendously high payment that she can’t really afford. She goes through all her options and gets on the phone with the bank. After three months, four phone calls, and many pages of documentation proving income and expenses, the bank lowers her payment.

Still, the house is too big, and she’s looking for ways to reduce monthly expenses. She decides not to sell because foreclosures in the neighborhood have driven down values significantly, and she’s not ready to take that hit on equity. Fortunately she put 20% down when she bought, so she figures she can rent the house out with only a small monthly loss. She’s done the math and figures that even with this loss, she can rent a smaller place for less that’s cheaper to heat and cool and still save money, so she goes ahead and puts her home on Craigslist.

She connects with a family from LA. They’re relocating for the husband’s job but can’t sell their house there, so they’ve decided to rent out their own house and rent here as well. My client goes looking for a smaller place and finds the perfect little cottage in Old Southwest. Turns out the cottage owner couldn’t sell his house for what he wanted, so he’s renting it out as well.

Which makes me wonder… how many reluctant landlords are there now? Renting their houses instead of selling? And how many rentals like these can our market absorb? There are reports on the rental market in Reno-Sparks, but they’re based on multi-units versus single family because there’s really no reporting mechanism for the thousands of individual landlords out there. It’s definitely a shadow market that would be interesting to track.

While writing my last post it occurred to me that also tracking closings per type of  “special condition of sale” would be an interesting exercise.

As of today our MLS is showing 4,305 listings [Reno-Sparks residential]. Breaking out these by the new “Special Condition of Sale” field yields:

Just as I plan to do with the Pendings tracked in my last post, I will monitor these listings for 30, 60 and 90 days and report on how many have closed. My goal is to get a handle on the types of sales that have a higher probabilty of closing.

Having just experienced yet another “pending” short sale fall out of escrow, I am wondering if these “transactions in limbo” can really be considered as Pending.  With no meaningful time lines given by the lenders who are supposed either approve or not approve a pending offer on a "short sale"; days, weeks and even months pass before the prospective buyers finally give up out of frustration and move on to another property.

Almost every agent (and their clients) who has dealt with a short sale transaction has experienced the same frustrations.  Even the approval time frames set by the lenders themselves become a moving target.  With extension after extension after extension demanded by the banks during the course of the "approval" process, it is no wonder Buyers lose patience and look elsewhere for a property.

In an attempt to determine just how bad this faux Pending status is I’m going to track all the current Pendings (as of today) and see where they are 30 days from now. [There used to be a time, not too long ago, when a 30-day close was the norm.  Not so, today.]

As of this afternoon our MLS shows 787 properties [residential properties in Reno Sparks] in various states of “Pending” status.  These breakdown as follows:

I have recorded the MLS numbers for all 787 properties.  I will revisit these properties in 30, 60 and 90 days to see what is outcome.  Would anyone care to predict how many actually close?  Hint: It’s to the point now that when a property that one of my clients had their eye on goes pending, I tell them not to worry because odds are it’ll be back on the market in a few weeks.

Is it just me, or does the 5:30 commute on 395 from South Reno to I-80 seem lighter to you these days? Yesterday I had lunch with some colleagues at a an upscale restaurant in South Reno. I arrived at noon and ended up waiting a half hour as the rest of my party was running late. The restaurant was near empty. By the time my party arrived at 12:30, I think only four out of 30 tables had people at them, eating lunch. This fine restaurant used to be filled with professionals. I hope a lunch crowd this small isn’t typical for them because if it is, the business won’t be able to support itself.

The other day I took my daughter to Meadowood Mall so that she could pick out her birthday present. All the stores were open, but very few people were out shopping. I don’t know if that’s normal for a Monday after 5:30 pm, but my daughter noticed immediately that no one was around and remarked that she’d rather shop on the weekends when there were more people.

That same evening we hopped over to the Sierra Summit, where again, hardly anyone was out. The Abercrombie store was fully stocked with four employees, lots of inventory, pricey halogen lighting, an expensive stero system, and we were the only ones in the store. As a former business owner who used to run payroll and pay all the bills in a retail location, I cringed on behalf of whatever corporation owns this store and wonder how long this can go on.

I had a long conversation with my financial planner back East who manages my 401K. He was so concerned about the sorry state of the credit markets, the housing markets, and all the ripples yet to unfold throughout US and world as result of this mess, that he called to suggest another line of income I could pursue to help me get through these next few years. I wished I had recorded the conversation for podcast because he was so well informed… but then again, for you regular readers of the blog it would just serve to confirm what you already know.

Noah Rosenblatt over at Urban Digs in Manhattan recently posted an update on the credit situation from the front lines.

Meanwhile, back in Reno, 89511 is beginning to seriously correct. I’ve seen a couple of bank-owned properties hit the market recently at real lowball offering prices. One, 770 Sandoval, a 3000+ sq ft home in Southwest Vistas, decent inside, hit the market at $499K, producing at least four bids for its banker owner. My clients bid higher than asking, but not high enough, and another party walked off with the escrow. I imagine this property will close in the lower-mid fives, but we shall see. Its cousin, 410 Octate Circle, another bank owned property, at 2500+ sq ft recently closed for $490K. Even Arrowcreek is not immune, as one of the bank owned Bella Terra homes listed for $200K less than the two neighbors for sale down the street, someone promptly stepped in with a strong offer and opened escrow. Just perusing MLS sales in that area since March 1, I see 18 sold, 14 of them under $1 million. Of those 14, the average sale price per square foot was $190, with a low of $153, and a high of $274. That’s pretty dismal for Area 165, one of the most popular, upscale neighborhoods in town.

But the big shift I’m seeing now is that banks are getting serious. Once they take back the keys, they list them low, respond quickly, take the best offer and open escrow. No more hemming and hawing… they seem to finally be getting down to business, and this will be the year that they blow them out the door.

Buyers in this market need to be poised to pounce on these best deals, they need to be prepared to compete and they need to be highly qualified with fantastic credit scores and 20% down. Sellers, I’m sorry, but if you have bank owned properties in your neighborhoods they will be comp killers. Until we flush the foreclosure pipeline, banks will drive down prices to meet demand.

Thanks to Smarten for pointing this out over on Chase Nation, but here is probably a better place to share this link. I had another column appear in the paper over the weekend, this time about an experience I had with buyers who made a low offer on an overpriced house. Random lowball offers rarely succeed, but a well-crafted, strategic offer often yields satisfying results. In this instance we created a compelling case to the sellers backed up with numbers galore explaining why we were offering so much less. They ended up countering back, and we eventually came to a fair price. Everybody kept their heads together, and the deal closed. Sure, the market’s down, but stuff still sells if you know how to work it.

Thanks to Incline Jim for this doozy… a chart and graph lover’s dream! This informative slideshow presents a compelling case for the we’ve got a long way to go baby argument. Honestly, my head is spinning and I think I may be turning into, gasp, a pessimist. (Say it isn’t so!) Highlights include the salient point that consumer borrowing power is anywhere from 39-41% less than it was just nine months ago, and a sea of questionable loans are still scheduled to reset later this year. These sorts of numbers want to make me downgrade my latest, ever-changing, possible-but not-so-sure local, bottom prediction from 2009 to 2011… What do you guys think?

One new client today was telling me about his experiences with foreclosures and mayhem in the early 90’s in Houston. To him, our current local troubles were mild in comparison thanks to continuing economic growth. He told me the story of a new house that originally sold for $120,000 (a lot at the time in Houston), then sold again to an investor for $80K, then again to another investor for $40K, then again at auction to his landlord for $21K. (When the lumber is worth more than the house, I guess it’s time to buy.) Though neither of us think it will play out that dramatically here, a small part of me says, who knows? Two years ago I was blowing off all the bubble talk as an unimaginative metaphor.

I do watch our numbers with a very close eye. The only positives in our market I see so far are increased pendings, which are suspicious because I wonder how many are useless, fake, short sale escrows that will ultimately fall through as banks take back the houses. I’ve also noticed more builders utilizing the MLS, which means their pendings stay on for months on end as the houses are built, because no builder seems to be building on spec these days. And then of course, it is spring, which always brings a seasonal bump in activity.

The other bright spot is Cyan, the only new home builder I know of doing brisk sales and actually reinvoking the lottery system. With this development, Centex seems to have hit the right price point, the right location, the right value for the dollar, which of course translates into to pending contracts and hopefully closed escrows. I am glad to see that somebody is doing well in this market. It gives me hope. I need some hope.