I held a house open yesterday in Somersett. Four parties stopped by. What was interesting about this was not one of the visitors was from Reno. Two couples were from Truckee, one couple was from San Jose, and the fourth was an agent representing a California investor. Although I had advertised the open house in the Reno Gazette Journal, none of my visitors had seen the ad. All of the traffic came from seeing my signage placed that day. All had driven over from California specifically to scout the area.
One of the visitors from Truckee explained that longtime residents are getting priced out of Truckee. He also said that Northwest Reno, particularly Somersett, is becoming a “Truckee annex”; adding that he knows of many former Truckee residents who have already made the move to Somersett.
This is not the first time I have heard those sentiments. I think I shall rethink my marketing strategy, and start advertising my Somersett listings in the Truckee Sierra Sun.
Lindie
Guy,
Was your open house at 1680 Sawtooth? MLS # 70003731.
I see you just droppped the asking price from $449,000 to $409,000. That puts the current owners $10,000 upside down from when they bought for $419,000 last May, plus your commission, plus closing costs.
I also see where Diane’s listing on Pepperwood in Somersett just took another $75,000 haircut from $1,400,000 to $1,325,000. These 5% reductions in asking price are oh so amusing. Looks like these owners are now about $300,000 upside down.
Nice spin about Somersett becoming Truckee East, or whatever. Can we tell the truth about Somersett? That it is a bubble bursting. That yes there is increased looking activity, but prices are dropping. And dropping.
Guy Johnson
Lindie,
Yes, that was the open house. (Incidentally, I’ve had additional Californians view the home today.)
Regarding Somersett being a “bubble bursting”, call it what you will, but in actuality Somersett is faring much better than the rest of Reno. As of five minutes ago, I see 83 active listings for Somersett. I also count 11 Solds in the last 30 days. That gives Somersett a 7.5 month supply of inventory, at current sales levels. And given that another eleven homes are currently Pending in Somersett, ongoing sales look to continue.
I’ll admit that seven and one half months of standing inventory is nothing to get excited about, but compare this to the inventory numbers that Diane reported in her recent Reno Residential Update:
Under $300K: 8+ month supply
$300K-$500K: 13 month supply
$500K-$1M: 20+ month supply
$1M – $2M: 28 month supply
You’ll see that things are worse elsewhere. It should also be noted that the “under $300K” inventory number is not even applicable to Somersett, as there are currently no homes listed at that price point in Somersett.
As always, thank you for reading and thank you for your comments.
LindieGee
Of course, Guy.
I’m sure your underwater clients on Sawtooth are just delighted with the state of the Somersett market. I’m sure they celebrated the $40,000 haircut off the asking price.
And yes, Guy, there are houses under $300,000 in escrow in Somersett. Both in Sierra Canyon. Both REO.
GreenNV
Truckee East? I LOVE it!
It has always stunned me that in a town that blames the California buyer for inflating housing values here, the real estate community hasn’t figured out the need to market more directly to the people that are buying (eek, Californians). I would be advertising in the Chron, the Bee, the Merc, Sierra Sun and any place else the buyers are coming from. Guy, look at your geographic list of hits to the Sotheby’s site – numbers 1, 2 and 3 are from California. My #1 question when interviewing agents is their marketing plan, and it better be a good one.
Your 16 Feb 2007 entry tracking median historic sales is like a bible to me. Median (I know, not always the best market indicator) has dropped over 9% since your Sawtooth sellers closed, and their current, reduced asking is only 2% under what they paid. Any questions why there weren’t any Reno folks at the open house?
And finally, Pepperwood. Diane and her clients are doing everything right (except buying the property in the first place). The reductions are always significant, the house shows well and it has an adequate amount of fake rock glued to it, it is well publicized. But these people at losing something like $5000 a DAY on their “investment”. Do a blog about “what I love about Somersett”, and I don’t think you will see this owner contributing!
Josh
Guy et al-
Californian here – and I am in escrow on a home negotiated to 695K from 730+. For me the Reno area (Southwest) holds great promise. As commute times increase more and more workers now work from home in Silicon Valley. This is my second job over a 7 year period where I work from home. Finally sick of long airport lines and upside down real estate prices I am buying in Reno. With property taxes SOOOO low on those nice Southwest ranch homes, huge space, great schools and great living conditions Reno will soon be home.
I was born in California, and have lived/worked here my entire life. With 45% of sales last year coming from Californian’s I don’t see the market devalueing such beyond what you see. Inventory is high yes, but prices should remain stable. For us, we’re moving for a 10 year plan, and I am confident my 2700+ sq ft home in reno on a half acre with pool will be worth more than I paid for it in 2016 when California will see a 35-40 increase in population!
California = I’m over it.
Reno Ignoramus
With all due respect, Guy, I think it is hard to quarrel with Lindie’s assessment of Somersett as a bursting bubble. Just because there is sales activity does not herald an improving market. Without sales, how does a market decline?
The two realtors who post on this blog each have a listing in Somersett. In each case, the owners are upside down. In each case, the owners are going to lose money. In each case, the next sale will add to declining comps. Do you say this heralds a healthy market?
Perhaps we ought to invite other readers to post about other upside listings in Somersett. Or listings that have been reduced, and then reduced again, and then reduced again.
You certainly are not suggesting that values are increasing in Somersett, are you?
Lindie
45% of last years sales coming from Californians??????
Oh, please.
Not even the REIC’s loudest Reno cheerleader would try to pass that one off.
Just because some real state office has a website and just because 45% of the OUT OF TOWN hits come from California, hardly means that 45% of all sales in Reno last year were to Californians.
Please.
BanteringBear
Guy posts:
“…in actuality Somersett is faring much better than the rest of Reno.”
I am afraid I have to disagree with you on this my friend. As many posters have pointed out, prices are down everywhere, including Somersett. For anyone who has already purchased a home there, this is a bitter pill to swallow. And, furthermore, the folks purchasing right now are going to be none too happy in the long run, as well. The Clownifornicators buying in our area right now have got to be some of the most foolish spendthrifts on the planet. Their ideology of, “Since it’s cheaper here than back home, it must be a good deal” is laughable. They’re going to get their hides handed to them.
We who grew up in the area understand what locals can afford, and how important market fundamentals are. Unless these dolts from California bring tens of thousands of $100k+ per year jobs along with them, prices will go back to what local wages afford. It takes but a sliver of common sense to realize that a market cannot be carried by out of towners alone. And, once you’ve lost your first time buyer, you’re done.
I also find it humorous to hear the term “investor” being thrown around. Investors? No SFR’s, or multi families for that matter “cash flow” right now. These morons would be better served putting the money in a CD. Like the old saying goes: “A fool and his money are easily parted”. I say, buy away sheeple.
Mike Van H
Here’s what I know about Reno; I bought my 2-bedroom bungalow on Holcomb for $147,500 three years ago, and now that it’s restored back to it’s Craftsman state, I could easily sell it for $220,000-ish. But I didnt buy it as an investment, I bought it to live in.
I know you guys always go off on tangents about the real estate market as an investment….but what about regular joe-schmoe’s like myself who actually bought their house to live in and not as an investment? The market isnt doing too bad for us 🙂
In fact, one thing ALL of you are missing when talking about neighborhoods is the direction that neighborhood is taking. Take the area of Wells Ave for example….since the City of Reno has been working on a master plan to make this area historic, there has been a HUGE uptick on my web site regarding inquiries into properties in this neighborhood. Especially since a good number of houses in this neighborhood comprise the $300K and under market.(I am NOT a realtor by the way nor have any affiliation with real etsate other than owning a home.) When I look at my web stats, I am getting hits from keywords like ‘Reno historic area’ and ‘Reno bungalows for sale’. When you look at the City’s Master Plans they are putting in place, life INSIDE the McCarren Loop will be much more convenient than life outside the MCCarren Loop; one reason one friend of mine has a house for sale in Sommersett, and is eyeing Brighton Manor to move into, and another good friend of mine has a Starcrest home for sale way out in Wingfield Springs, and is eying Virginia Lake Crossing.
Guy Johnson
Wow! Lots of great feedback, guys. Somersett seems to be a touchy subject. Perhaps that’s why Diane assigned *central* Reno to me. 😉
But seriously, thanks for all the posts. Your commentary is one of the things that makes this blog so useful and interesting to read.
Just for the record, I never suggested that values are increasing in Somersett. I was simply making the observation that Somersett’s inventory is less than that of Reno as a whole.
Also, for clarification, when I stated, “there are currently no homes listed [under $300K] in Somersett”, I was referring to Actives, not Pendings. I should have been more specific. Lindie is absolutely correct about houses under $300K in escrow in Somersett. At the moment the MLS is showing a Somersett home listed as “Pending Loan” for $249,900. My apologies for any confusion this may have caused.
GreenNV
mike van h, you are a demi-god. I don’t bookmark Diane’s blog so that I always have to enter from Downtown Makeover – that way I never miss your postings. The Chamber of Commerce seriously owes you a testimomial dinner for your efforts promoting Reno.
Interesting that Blake Smith, CEO of Somersett Development Company, has just listed the River Inn property on W. 4th for sale or lease. Any insiders know what is going on? Casino development there is one of the key premises of the West Fourth Street Transit Overlay District plan.
I’ve done the research, and it is officially “Somersett”.
Why does Somersett raise all of our blogging hackles? First it is huge (3000+ units before the expansion of the “raisin ranch”). It’s entire existance was probably illegal based on the annexation codes at the time. Purchases there tended to ride the peak of the market, so the resellers are in the most hurt and give a great insite into market strategy and denial. And a great future war looms when the national devolpers take aim at the rest of their holdings in the property. $600,000 or $300,000 as a target base price?
Guy and Diane, if you give us a forum to sound off on Somersett, it will probably be the highest hits your site has ever seen!
Reno Ignoramus
It’s so interesting to watch this bubble deflate. A year ago, I suggested on this blog that Somersett was the biggest bubble neighborhood in Reno because so much of it was built and sold at or near the bubble’s peak. I got torched by the bubble deniers who explained to us all that values in Somersett would surely not fall because there was a never ending stream of rich California refugees that would ratchet values up in Somersett for years to come.
I note that none of those people post here anymore.
Gotlots was the great Somersett bubble observer, posting frequently with specific examples of Somersett declining values. Today, it appears that almost everybody can recognize the pain yet to be had by Somersett owners.
Diane Cohn
Bummer, I guess I won’t be moving for the next six years at least. My neighborhood is almost two years old now, which probably explains the rash of for sale signs on my tiny cul-de-sac. All the flippers stuck in Somersett must be really annoyed at this point…