Yesterday I posted the monthly median numbers and noted that January’s median sold price plunged more than five percent from December’s median sold price.  After seven months of relatively flat monthly median sold prices, one has to wonder if January’s drop was a seasonal blip? Or does it portend the beginning of a “double dip”?

Where prices go from here only time will tell; however that doesn’t stop the topic from being discussed throughout the day.  After reading yesterday’s post a colleague asked me what I thought was the cause of January’s price drop.  At the risk of stating the obvious I replied, “more houses being sold for prices below the previous month’s median”.  “But where are these lower-priced sales occurring?”, she asked.  A good question; and one that doesn’t get answered when looking at the median sales price for Reno and Sparks as a whole.

So, I broke out January’s 334 sales by MLS area.  The sales occurred across 35 MLS areas. However, as seen in the table below, some areas contained a much higher proportion of sales than others.  In fact, from a distribution standpoint, just seven areas accounted for nearly half the month’s sales.

The table below shows January’s sales by MLS area.  For the ten areas with the most sales I have also calculated January’s median sales price.

UPDATE February 10, 2010 - I’ve filled out the remaining median prices in the table below and also added a column for median sold price per square foot.  Decide for yourselve where the data is too thin to be meaningful.

As seen above Stead holds the top spot for highest number of January sales – more than ten percent of sales for the month.  This is consistent with 2009 overall numbers.  See related post: 2009 sales by MLS area

For the Reno-Sparks MLS Area Map, click here.

Note: The data in the table above includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS - February 2010.

Last year a new MLS area was created (Area 116 – “Reno-Downtown Core”) by the RSAR - see Reno MLS area changes. Unfortunately, this new area was never added to the search choices provided by the IDX service employed by many local websites, including this blog.

This oversight has now been corrected. If you click on the Search MLS tab above, you will now see Reno-Downtown Core included in the list of searchable areas. Give it try.

As Mike indicated in his last post, I was indeed in Iowa.  Presently stuck at the Salt Lake City International Airport.  Delayed Delta flight from Minneapolis caused me to miss my Delta connecting flight by five minutes…but that’s another story.

Now I’ve got four hours to kill at SLC International.  The good news is the airport offers free wi-fi throughout the terminals.  Woot!

Catching up on local news I came across this article in yesterday’s RGJ:
High-price homes struggling during economic downturn

…thought I’d forward it to the blog for discussion.  I’ll try to get back to blogging later this week.  Thank you for your patience.

The latest edition of Forbes magazine ranks the nation’s wealthiest zip codes expected to experience the largest decline in house values this year. According to the article some zip codes are on track to fall 15% to 25%.  The top ten include:

   1. Incline Village-Crystal Bay, Nev.
   2. New Vernon, N.J.
   3. Alpine, N.J.
   4. Sagaponack, N.Y.
   5. Amagansett, N.Y.
   6. Bridgehampton, N.Y.
   7. Ross, Calif.
   8. Old Westbury, N.Y.
   9. Santa Barbara, Calif.
  10. Southampton, N.

Source: Forbes, Stephanie Fitch and Matthew Woolsey (07/13/2009)

Read the article here: America’s Most Troubled Luxury Neighborhoods

Last month the Reno/Sparks Association of REALTORS® implemented a few changes to Reno’s MLS Areas.

These changes included:

• a new area was created (Area 116 – “Reno-Downtown Core”)
• some existing areas were renamed (i.e. Area 122 - “Reno-Somersett” has been renamed to “Reno-Northwest Foothills”)
• minor boundary changes

To see the specifics of all the modifications click here.

Click on the map below to access the revised Reno-Sparks MLS Area Map.

map courtesy of the Northern Nevada Regional MLS (NNRMLS)

Longtime readers will remember when I posted a few pictures of the Trailheads around Somersett.  I’m happy to report that the new trail has been completed and we happen to have an electronic version of it below.  Simply click on the map to see the full version along with trail names and distances.

I have just returned from a real estate auction this morning for a house in the Village at Somersett.  Despite the chilly morning the auction (held in the driveway of the property) drew a pretty good turnout.  I counted 26 people in the crowd, including at least three real estate agents. 

The subject property is located at 1655 Painted Rock Trail.  This property is a four-bedroom, three-bath, two-story, 2,032-square-foot, single-family residence built in 2005.  Originally purchased in September 2006 for $473,000, US Bank took over the property in the spring of last year.  It was listed for sale as a bank-owned property in April 2008 at $329,900.  The price was systematically reduced over the next several months until its most recently listed price of $248,500 in December.  I guess after eight months with no takers the bank decided upon an auction approach.

As I said above the auction seemed to be well attended and also included “remote bidders” via a representative on a cell phone. The opening bid was $50,000.  The auction process moved fairly quickly with the price escalating to around $160,000 before slowing in pace.  At that point only three bidders remained interested.  The auctioneer was able to coax a few more bids out of them for a final sales price of $168,000.

Then as quickly as it started, the auction was over and everyone went home; except for the high bidder who stuck around to sign some paperwork.  I caught up with the auctioneer as he was getting in his car to head to Sacramento to sell houses there for the next five days.  I asked him if there was a reserve price, and if so, had it been met.  He replied that there really wasn’t a “reserve price”, however the lenders typically reserve the right to not accept the high bid if it doesn’t meet their minimum threshold.  However, he added that he hasn’t been seeing lenders reject the high bids lately.  He said that with a crowd the size of the one this morning, the final bid “is pretty indicative of the market”.

The high bidder will know within seven days if his bid has been accepted; and then a relatively quick close will follow.  With at least nine properties in the Village currently listed on the MLS, at prices ranging from $228,900 to $379,000, I’d say the high bidder is feeling pretty good today with his $168,000 purchase.

There were only three Notice of Sales published in the RGJ Monday.  All three appear to be Option ARM loans that have reached their maximum 110% of the original loan amount.  Where these properties are and the amount of the defaults are bearing out the predictions from The Next Wave.  Look at the amounts due at the sale vs, the Option ARM loan amounts.

978 Glenrock #38 (pictured) is a free standing condo in Incline Village.  It was purchase in April 2003 for $375,000.  The NOS was posted 13 October 2008 for $549K.  Here’s the loan history:

4/23/2003 - $300,000 first. $75,000 second (100%).

6/1/2005 - Refi $360,000.

7/5/2005 - HELOC $86,250 (see below).

11/7/2005 - Refi $472,000 Option ARM, 110% max.

11/15/2005 - HELOC $41,300.

The last HELOC was used to put 5% down on 661 Saddlehorn in IV, which they purchased for $875,000.  There hasn’t been any other loan activity on this property, but  a NOD was filed 7/9/2008.

937 Jennifer in Incline Village is a SFR purchased in February 2005 for $622,500.   The NOS was posted 13 October 2008 for $721K.  Loan history:

2/5/2005 - $498,000 first, $124,500 second (100%).

3/15/2006 - Refi $650,000 Option ARM 110%, HELOC $120,000.

The same owner bought 861 Jeffrey in IV in April 2002 for $350,000.  By August 2006, they had run their outstanding loan balances on the property to $555,000.  None of the cash out refis or HELOCs went to the purchase of Jennifer.  The primary interest only loan hasn’t reset yet, but I wouldn’t be surprised to see a NOD filed soon.

10100 Via Verona is a Toll Brothers monster house located in ArrowCreek.  It was purchased in May 2004 for $969,000 and the NOS was posted 13 October 2008 for $914K.  It originally sold in January 2002 for $886,056.   History:

5/3/2004 - $649,500 first, $150,000 HELOC (80%).

5/25/2004 - $43,700 third loan.

3/8/2005 - Refi $810,000 Option ARM 110%.

10/16/2006 HELOC 200,000.

This property is currently listed at  $850,000 by Michelle "Honey" Plevel.  Her patented sweet talk the lender into a loan modification system that worked for her on one of her investment properties doesn’t appear to be working for this owner.

I don’t mean to imply that all the properties going NOS are the result of Option ARMS - it was a freakish day for the RGJ.  But look at the neighborhoods effected.  Look and the magnitude of the loans.  Two of the three own multiple properties here.  All have HELOCs on top of the first loans.  Connect the dots - how many more loans like this are out there ready to go sour?

I DO mean to imply that if you have an Option ARM loan and have been paying the minimum option and going neg-am, you WILL lose your house.  No amount of honey can sweeten that bitter pill.

From my monthly median sold price table we know that Reno-Sparks home prices are now more then 30% off their peak reached in July 2005.  But this number is for all Reno and Sparks.  What are the declines by MLS area?  And did every area peak at the same time?  These are questions I was curious about, so I pulled the data and found the following results (see table below).

Depending on the area, sold prices peaked in June, July or August of 2005.  This was expected.  However, the percent today that these areas are off their peaks is much more variable.  For example, MLS area 163 (“Southwest”) has experienced the smallest decline; only 19.4%.  Followed by area 142 (“Hidden Valley”) with a mere 22.2% fall.

Which areas have been hit the hardest?  The “Old South Suburban” area (MLS area 164) has suffered a 46.3% drop in prices; and “Donner Springs” (MLS area 141) has fallen 42.6%.

Here a link to the MLS Area map as provided by the Northern Nevada Regional MLS.

There’s been much discussion on the blog recently about distressed properties (bank owned, short sales, court sales, etc).   Currently, these types of listings account for over 40% of the properties listed on our MLS and 50% of the sales in the last thirty days.

I recently overheard a couple agents commenting about the high number of short sales in Sparks.  Curious, I decided to query the MLS and break out distressed properties by MLS area to determine if a large variability between MLS areas exists, and if so, by how much.

The table below shows what I found.

Click here for a map of our MLS areas.

As you can see from the table above, Sparks leads the area with 65% of the listings having some type of special condition to the sale; followed by the North Valleys (55%); Southeast Reno (53.8%) and Spanish Springs (53.5%).

Those areas with the least proportion of distressed properties include: Southwest Suburban (9.0%); West Southwest (11.5%); Old Southwest (15.9%); and South Suburban (17.6%).

Data courtesy of the Northern Nevada Regional MLS (NNRMLS) – August 2008