Remember my clients who paid $595K for a beautiful, 3003 square foot home in Wingfield Springs last year at the height of the market? Last night we dropped the price to $450K. That’s only $150/sq ft for a beautifully upgraded, fully landscaped, picture perfect home… I don’t think you could build this home for that price! Let their loss be your gain. It’s a company relocation, they have to move, they’re motivated. You Tube Tour
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gotlots
So let’s see. This house was listed a month ago for $480,000. The price appears to be dropping at the rate of about $1,000 a day. Somebody could have bought it for $480K and already locked in a $30,000 loss in just 30 days!
This house has declined in value $145,000 in 13 months. Your client’s house has been losing value at the rate of $11,000 a month since he bought it.
I can imagine what the neighbors must be thinking as they see this comp fall to the tune of $1,000 a day.
If you all think we are at the bottom, jump in and buy now. Otherwise, if one seeks to lock in (further)declining value, there has never been a better time to buy.
Diane Cohn
Yes, it’s called testing the market. You put it out there at a certain price, and if the market doesn’t respond, you lower it. The market did not respond at $480K, so we lowered it to $460K. The market responded a bit to the new price, but not enough, so we lowered it again. The point is to sell now. The market will determine the final price.
Wazzup
Here’s a good one, that I read today, “we are in a period of wealth reversal”.
Diane,
I was wondering when you were going to post another lightning rod. Thanks…
Waz
Lindie
So this house has lost $145,000 in value in 13 months??
I distinctly remember realtors in Reno in 2004 and 2005 saying that houses in Reno never go down in value. Because they are not making any more land. And there would be a never ending supply of Bay Area people coming here to buy all the houses.
Did they discover more land? Have they closed off I-80?
This house would now have to appreciate more than 30% in value just to get back to what the seller paid for it.
Yes the market is talking here. And what it is saying is ugly. Really ugly.
Anon
Gotlots,
if only you could tell the future as well as you can tell the past! Maybe I’m wrong, but your postings make you out to be someone who’s really bitter about having missed out on the opportunity to make a lot of money during the boom years and now enjoys watching people crash and burn. Sadly, many of the people losing money now are not necessarily the same people who made it a couple of years ago.
In addition to simply looking at how much things have dropped in the last x months and extrapolating from that, it might be more interesting to know if you have any solid basis for thinking (as you appear to think) that things are still so hugely overpriced. Judging from your posts, I don’t think prices will ever drop enough for you to consider buying something, which means that ten years from now you’ll probably be twice as bitter, for having missed the next bubble too!
angela
I don’t understand how anyone can think homes here aren’t overpriced….the current median home price is grossly out of whack with median incomes. A family that does everything right still can’t afford to be a first time home buyer without stretching their budget to the max and using some sort of toxic mortgage (oh wait, that makes me a bitter renter). Reno is on CNN/Money’s list of top places Where NOT to buy and we are right up there on the Moody’s list to have one of the biggest drops in home prices. Reno has miraculously transformed in the last five years from being a “podunk” town (anyone ever seen Reno 911?) to being the next best thing since sliced bread – just doesn’t make sense to me.
Lindie
Anon,
I am not here to speak for Gotlots, who has established that he is more than capable of speaking for himself.
But you want to know if there is any “solid basis” for the suggestion that houses are still hugely overpriced?
Let me give you one.
Consider the traditional rule that the price of a house should not be more than 150 times what the house would rent for. Perhaps in a particularly expensive city, that figure might be 200 times. If you go to Craigslist, you will see that rents for the most part in Reno/Sparks are in the $1200-1400 range. Some a little lower, some a little higher. Let’s use the $1400/mo. figure, which is probably what this house would rent for. 200 times rent at $1400 is $280,000. That is $170,000 less than the current asking price of this house. I think that qualifies as suggesting this house is by all traditional standards overpriced.
Anon, I find it much more enjoyable if we can just evaluate the merits of people’s posts without resort to personal attack on anybody. I for one have found Gotlots posts to be right on over the months. I have certainly not found any hint of bitterness in his/her posts. Just pretty darn accurate commentary. Who cares what his/her personal motivations are.
Perry
I have to agree with the rental analogy. I have a rental house in East Sparks that I’ve owned since the late 90’s and find this rental thing to be a good tool. I was told that what you can get for rent determines the utility value of a home. What you should pay as a mortgage is only marginally higher than rent. The bottom line the rent I charge today is the same as what I charged in 2001. It’s not that I haven’t tried to get more but when I do, I don’t get renters. The value of the home may have gone up but the utility value of the home has not.
Diane Cohn
Everyone: I just deleted four useless, mean-spirited comments from this blog. Disagreement and opposing viewpoints are fine, and humor is a bonus. But rude, thoughtless, flippant remarks are simply unacceptable. From this point forward, comments will be moderated.
Reno Ignoramus
Diane:
If the sellers of this house are so motivated that they are willing to drop the price $1000 a day, you might want to try something.
Put a sign on the house that states the price. Then, every day, draw a line through that price and write in the $1000 lower price.
I saw this done with a house in the SW a while ago, and it worked. It has a major visual impact that MLS listings just don’t have. It creates a real sense of urgency on the part of buyers as they see the price dropping literally in front of their eyes.
This approach only works with a bold stroke. A price drop of $100 a day won’t get anybody’s atention. But $1000 a day is a bellringer. It won’t be long before even in this falling market somebody will say the price is right and jump in before somebody else does. It creates that sense of urgency that otherwise is long gone in the market now.
The neighbors of course will be displeased, but your clients are leaving town, right?
NVMojo
Thanks, Diane. There are plenty of rude sites for attackers to go post on and make no sense. Send em away!
gotlots
One inquires what “solid basis” there is to suggest that houses are overpriced?
I suggest the most “solid basis” of all. The market.
Let us look at this house now offered for sale by Diane for $450,000.
According to the IDX version of the MLS, there are in Reno/Sparks TWELVE houses at exactly $450,000.
Between $450K and $460K, there are SEVENTY FIVE houses. Yes, in a range of only $10K, there are 75 listings (not including condos).
Diane’s listing has dropped $30,000 in price in 30 days. What better “solid basis” is there than the market saying the house has been overpriced?
You know how many of these 75 houses between $450K and $460K have an offer?
NONE.
The market is talking here. Talking quite clearly. 75 houses. No offers. You all think prices are heading up from here? You all think prices are going to stagnate from here?
If only half of these 75 sellers are serious about selling, prices are going down. If one seeks to lock in declining value on a house in Reno, there has never been a better time to buy than now.