Yesterday I passed 10 human builder signs hawking properties on the way to Wingfield Springs. I had an appointment with a past client. A job transfer brought him here last year, and he bought a wonderful, picture-perfect, 3000+ square foot, upgraded executive home for $595K. We even got a bit of a discount through negotiation at the time (unheard of the year before) and felt it was a good buy relative to the comps.
Yesterday, we listed it for $480K. Before settling on a final price, we toured the neighborhood competition. The lowest price comparable is $444K and features a rosy brown shag carpet in need of replacement, brass fixtures, cheap builder finishes and no window treatments, but other than that it’s a good value for someone willing to tackle a bunch of cosmetics. Another is $460K with a lovely yard, but it’s 80’s country awful. And the one for $499K is nice, but smaller, and the split level floorplan isn’t so popular. The next competitor is $549K. It’s on the golf course with wonderful views and better finishes, but it’s smaller, and the owner options eliminated bedrooms, which doesn’t always work for the families that typically move out here (though the home is relo company owned, and apparently, they’re ready to deal, according to the agent). The rest are more expensive.
As for recent solds? One down the street finally closed for $410K and represents a new low for the neighborhood. It’s a bit smaller than my clients’ and has all the finishes that people hate these days (cheap mauve carpets, whitewashed oak cabinets, sheet vinyl floors). But interestingly enough, it was for sale over a year ago when my clients were looking, and we actually toured it when it was listed for $589K. The sellers reduced it numerous times throughout the year, but always behind the trend. If they had priced it more aggressively in the beginning, they may have actually sold it nine months ago for $550K rather than $410K on September 29.
So, it’s a tough climate. If my client sells at this price, that’s a nearly 20% drop in value. We shall see.
Price reductions = 32.
Reno Ignoramus
But Diane, where is the equity-drenched Bay Area escapee to buy your client’s house for 10% more than he paid for it a year ago??
I mean, certain of your readers post here and assure us that our market is immune from the meltdown happening everywhere else in America because we have the never ending supply of Bay Area people coming here and finding our prices so damn cheap. You know, all those employees of Computer Doctor.
So your client bought a year ago for $595,000 and is now asking $480,000. Let’s say he is lucky enough to get an offer for 97% of asking, or, $465,600. Let’s say he has seller’s closing costs of 5%, which lowers his net sales proceeds to $442,320.
He is looking at a loss of $152,680 in ONE YEAR. That is a 25% digger.
What a marvelous testament to the state of the housing market in Reno.
And you know what? Whoever buys this house better deal damn hard, lest he end up the next greater fool. You think prices in Reno are going to be higher a year from today? Read the Moody’s report.
Ok, let’s hear now from someone telling us that the fall is over, that there really are Bay Area people who will come here and make our market special. Give us assurances that this house a year from today will not be selling for $380,000.
And, oh, is your client going to have a bring a big check to the closing?
gotlots
So there is a house on the same street that a year ago was listed for $589K and sold a few days ago for $410K.
Gee, that’s only a 30% haircut in the last year. Some bubble sitter saved $179K by not rushing in a year ago when he was on the verge of being priced out forever?
So now we have houses that sold a year ago for almost $600K today selling in the mid to low $400s.
I don’t know folks, what do you all think? Think Moodys and virtually every other report in existence today that say there is more pain to come are all wrong?
Think that maybe if one seeks to lock in declining value on a house in Reno, there has never been a better time to buy?
Insider
So much for this post /2006/01/not_a_bubble_bu.html “this area will continue to increase in value. Reno is a fabulous place to invest.”
Perry
The slide continues. I don’t have the exact numbers so any realtor out there, help me out. 1620 BELFORD ROAD was listed I’d say a year ago for about $729,000 and is now down to $599,000. Still active.
5855 Blue Canyon Dr is listed at $319,000 and shows pending. This Centex home is very close to what they’re attempting to sell at University Place. I believe the starting price there is $329,000. No wonder they have a human sign out there every weekend. Centex are you listening?
Here’s a flip house to watch. 2075 Skyline Blvd. 07/01/1980 $149,000 03/09/2006 $515,000 great flip! Sold a time capsule. 10/09/2007 listed at $690,000 with tons of improvements. The house is empty, how long can they carry it?