Real estate geeks rejoice… May numbers are in. Essentially the $0-500K market remained steady as the $500K-$1M improved. The $1M-$2M range wobbled along with 28 months of inventory, while the over $2M range saw a spike in activity. Overall the market is only selling through 9% of what’s available. The median price for May was $310K. Another mixed bag of results as our market wallows along at what I believe is the bottom, though I know many of you disagree. read
I'm Your Guy!
775-722-4011
Move to Reno?
The real estate agents that are creating this web site definitely have a sense of humor.
http://www.renorelocation.net/
Probably the Reno RE market will hit bottom in about a year and then stay there until all excess inventory is gone.
Lindie
Note the description of Somersett:
“Reno’s fastest declining neighbnorhood.”
GreenNV
I am heartened by the relative strength of the under $300,000 market. The lenders seem to have found a work-around for the entry level buyer’s that would have been sub-prime a few months ago. Or are folks just qualifing? I would love to hear about the finacial packages now being offered. Any bloggers have some input?
Over 2 mil, who cares? But the 1-2 mil should get interesting. There are scads of these out there, mainly in 89511, where there are zero listings under a mil. It is pretty cool to watch how close to a mil the listers will go without breaching the unspoken barrier.
$999,999 – rabbits in the mailbox.
Reno Ignoramus
In the $300K and under segment, there is 8 months of inventory.
In the $300K-$500K segment, there is 1.1 YEARS of inventory.
In the $500K-$1 million segment, there is 1.5 YEARS of inventory.
In the $1 million-$2 million segment, there is 2.4 YEARS of inventory.
This signals a healthy market?
Is anybody aware of any way to obtain sales data on a price/sq. ft. basis? To look at the median price of the market, observe that is “holding steady” and therefore conclude the market has bottomed out is problematic. Everybody knows there are houses on the market now that sold in 2004-2005 for $500,000 that can be had today for $400,000. These sales contribute to a “rising” median, when in fact they represent a significant decline in value on a price/sq. ft. basis.
YinReno
Lindie, that’s funny, I’ve lived in Somersett for a few years now and I think it’s one of the best neighborhoods in Reno. Wonder where you get your misinformation? You probably live in some upscale trailer in Sun Valley anyway.
Derrick
some good info diane. along with the previous 3 months numbers it is becoming more and more evident that the market is VERY close if not already at the bottom. Im sure you never insinuated that this was a HEALTHY market just a market that is showing signs of improvement. Its too bad that some people on here prefer to only look at the negative aspect and refuse to see ANYTHING positive in your last 2 updates. However I do and now am increasingly optimistic about the Reno RE market. Nobody ever said the market will recover overnight.
Derrick
good info diane. we now have 3 straight months where the market has shwons signs of improvement and the median price has also improved. Nobody ever said the recovery would happen overnight. But 3-4 months of data cannot be ignored. Unfortunately many posters on here decide to only see the negative side of the spectrum while ignoring anything remotely positive. that being said. I need to have a glass of wine and some cheese.. if you know what I mean . cheers
Lindie
Gee, YinReno, nice cheap shot. I must have touched a sensitive nerve or something.
Actually, the quote above comes from the website linked in the first comment above.
Go check it out at http://www.renorelocation.net. Here are some quotes from the site, which, by the way, is a site maintained by some Reno realtors:
“Somersett–you’ve discovered Reno’s fastest dropping home prices.”
“When you imagine the worst possible timing to construct a huge, new home development in Reno–Somersett pretty much hit the nail on the head.”
“There are huge numbers of homes available with sellers…desperate to unload their turkeys.”
So you see, Yin, all I did was quote from this website. It’s nice to see some local realtors talking turkey (no pun intended, of course) about Somersett.
Smart Money
Some of the real-estate bulls on here might want to read over this article http://biz.yahoo.com/hmoney/070521/040907_shiller_moneymag.html The “Smart Money” says real-estate is still over-valued and headed lower.
Move to Reno?
I posted the link to renorelocation.com not because of its comments about Somersett but because it gives a good run-down on the various neighborhoods/builders in Reno. To those of us who live east of Nevada that kind of over-view makes the various comments here more understandable. I’m sure that Somersett is a fine up-scale community that will do very well in the long run. It seems especially suited for those who don’t have to make a daily commute.
As for Reno’s RE market hitting bottom, interest rates are up and the ARMs are just starting to re-adjust. No matter how you slice it, it’s a buyers market right now and it will be for the until inventory comes down.
BTW, what is Bully’s?
Sean
While sales have not plummeted the inventory is increasing. To say we have hit bottom we would see inventories slowly decreasing. In the reno sparks area there are over 5000!!! listings and the average time of the market overall is still increasing. Some houses in the NW reno area have been on the market for over a year with major price reductions and still havent sold. A house in the new NW just went pending after going for 449k to 349k. This is a 2800sqft house, thats $130/sqft and it wasnt a foreclosure. The house i live in(i dont own it) was bought for 545k in july of 05(the peak) There is a house down the street same exact model on a larger lot for $425k and its been on the market for months so its still priced too high. From what i can tell the bottom will most likely be the Fall/winter of 2008 unless interest rates fall dramatically. and we will stay near bottom for a while till confidence and the economy picks up again. This is also from many realtors i’ve talked to. Staff reductions of close to 50% and even the ones who stay are barely making a living. 400 sales spread over how many thousand realtors in the reno sparks area? I actually think the fernley area will do better than the reno area of the next 5 years with the reno/tahoe industial park and many large retailers building(lowes, etc) out there and much cheaper prices right now than the reno sparks area. Diane or Guy, do you have any number on the fernley area and how it compares to the reno/sparks area?
MikeZ
June 2, 2007 article in the New York Times examines the 1989 downturn:
“The Long Life Span of a Housing Downturn”
It took 99 months for the S&P Case-Shiller HPI to turn back positive after the ’89 collapse.
This most recent bubble was significantly bigger than the one in ’89, leading one to conclude that this downturn will linger much longer than 99 mos. or prices will continue to fall, shortening the time scale.
Lots of graphs and charts at the URL, click on the “Home Prices” link.
Note the 3 dead cat bounces in the “Home Prices” graphic at 24, 36 and 48 mos. into the downturn.
Reno Ignoramus
Sean:
Go to Foreclosure.com and click on Nevada, then click on Lyon County. Count how many foreclosures and preforeclosures there are there. You might be amazed and how badly Fernley is going to melt down.
Starting in 2002-2003 when the bubble in Reno started to inflate, Fernley advertised itself as the low cost alternative. There was at least one Voodoo mortgage company that made a small fortune bewteen 2003-2005 selling suicide loans to unqualified buyers to enable them to purchase houses they could not afford in Fernley. It appears some chickens are coming home to roost.
MikeZ
Whoops! The eternally optimistic NAR has changed its estimates for 2007. Again! Fourth time in as many months, with each new estimate one getting progressively worse:
Mar 07: +1.2%
Apr 07: -0.7%
May 07: -1.0%
Jun 07: -1.3%
http://tinyurl.com/2tau29
Home prices: More pain to come
The National Association of Realtors said it now sees the median price of existing homes sold falling 1.3 percent this year. That’s almost twice the 0.7 percent drop forecast just two months ago, and is worse than the 1.0 percent drop in prices it estimated in May.
As recently as March, the group was forecasting a 1.2 percent rise in the median existing home price for this year.
Lindie
The NAR must be using neighborhoods in Waterloo, Kansas and Muskogee, Oklahoma to come up with this number. A 1.3% annual decline in value?? Mr. Lereah may be gone, but the spinjive nonsense continues.
2sleepy
What’s up with Dayton? It looks like a nice enough place, but prices are really alot higher than other similar places such as Fernley. And, are all those vacant houses on the golf course in Fernley foreclosures? Might be some bargains there if one could figure how much more they will drop.
DERRICK
SPARE US JUST POST A LINK AND GET IT OVER WITH. WE CAN ALL READ.
Sean
Well having a little time last night i went through the MLS in a few random area’s and found out some rather disturbing number as to what is pending. SW suburban- 6 of 110 pending. Golden Valley- 1 of 31 pending. Hidden Valley 4 of 78 pending. Lemmon valley 3 of 45 pending. West Southwest- 7 of 122 pending. Sparks foothills- 2 of 41 pending. Sparks Suburban- 18 of 222 pending. These are only single family homes, no condo’s manufactures, etc.
These numbers show what is pending. Say 80% of these pendings sell in the next month there will be 33 of 649 listings. Thats roughly 20 MONTHS of inventory in these randomly chosen areas. This time of year is also when the most people buy historically speaking. I dont see how you can say we are near the bottom with the kind of inventory we have and the sales we have.
GratefulD_420
Diane,
Re: June – “The Truth is here”
Have you found the answer for this Month’s problem in the MLS numbers ($300k to $500k)?
Do you think it’s a mistake? OR did one of the Reno Realty mogul’s fold their hand and off load a bunch of homes? If so was it in a single neighborhood or spreadout ?
I’m suprised not to see much comments on this problem with last month’s numbers…. seems like it should be a big interest ??
drbrightside
Smartmoney,
I wouldn’t put too much credence in Shiller. He’s been predicting a collapse since 2002. And when it finally slowed 4 years later ( and a lot of appreciation ) he said he can’t “predict” timing. So basically his predictions are useless. I detail it out here.
http://drbrightside.blogspot.com/2007/01/salad-and-garbage.html#links
Reno Ignoramus
Yes Sean you are correct. There are YEARS of inventory in all market segments in Reno-Sparks except the very bottom. This is the thorny little problem that the market cheerleaders never like to talk about. As of couple of days ago, for example, there were 337 listings in the $500K-$600K segment. 17 of them had an offer. If you assume that 17 houses will sell every month in this segment, and NO other listings come on the market, it will take 1.5 YEARS to sell through the inventory. I’m sorry, but there is no amount of shuck and jive that can suggest that 1.5 YEARS of inventory signals a healthy market.
Now there is allegedly some discrepancy between the data the public is given on the IDX version of the MLS that appears on all the broker websites, and the allegedly REAL data that is avauilable only to realtors. The allegedly REAL data allegedly always shows that inventory is not as high as it appears on the IDX version.
Grand Wazoo
I assume the value in this property, given that the selling price was over $200 sq/ft, is that both the main floor and basement can be rented as separate apartments to students? This neighborhood is almost entirely student rental houses, and not all that well kept up. Go east a block or so and you are on Valley Road, a pretty hairy spot in that area at best.
Smart Money
No one is always correct, Shiller is no exception. But he is still “smart money” compared to the average joe out there that is “dumb money”. Shiller said to look for a sudden escalation in prices to signal the top of the bubbel. I watched for this. In the summer of 2005 I saw this occuring in Reno and put my house on the market. It sold and I got top dollar. The “dumb money” that bought my house now rents it back to me. I didn’t even have to move. Anyway, as you can guess the house has dropped in price substantially. The realtors at the time where all lauging at me when I told them we were at the top of the bubble and it was much cheaper to rent. Well I’m the one laughing now….all the way to the bank. The sad part is, bubble always end badly. Plus, you look at the historical price/rent ratio, income to mortgage ratio for Reno and you find that prices are still way over-value, just as Schiller suggests. So don’t expect a bottom anytime soon, though you’ll hear otherwise from the “dumb money”.