Looks like we experienced a 0.5% dip in the median Reno sold price for July vs. June. Has the upward trend we’ve observed since January stopped? Perhaps. Inventory continues to rise; as does the median “For Sale” price. July’s number of units sold is the same as that for June. [FWIW, DOM continues to hold steady too; However, we’ll get a more accurate picture when the CDOM metric becomes available on our MLS (see).]
| Month | # Homes For Sale | Median For Sale $ | # Homes Sold | Median Sold $ |
|---|---|---|---|---|
| July 2007 | 5,346 | $359,000 | 344 | $298,498 |
| June 2007 | 5,331 | $353,000 | 345 | $300,000 |
| May 2007 | 5,149 | $350,000 | 411 | $295,500 |
| April 2007 | 4,907 | $350,000 | 379 | $296,000 |
| March 2007 | 4,681 | $349,900 | 372 | $293,700 |
| February 2007 | 4,441 | $349,000 | 312 | $285,000 |
| January 2007 | 4,863 | $349,000 | 324 | $280,000 |
| December 2006 | 4,702 | $349,000 | 337 | $290,000 |
| November 2006 | 5,333 | $349,900 | 318 | $300,000 |
| October 2006 | 5,753 | $349,999 | 409 | $299,900 |
| September 2006 | 6,068 | $354,900 | 385 | $299,900 |
| August 2006 | 6,347 | $355,500 | 372 | $306,650 |
| July 2006 | 6,404 | $359,900 | 411 | $322,900 |
| June 2006 | 6,436 | $359,900 | 463 | $325,000 |
| May 2006 | 5,953 | $365,000 | 425 | $316,000 |
| April 2006 | 5,200 | $364,000 | 412 | $316,000 |
| March 2006 | 4,897 | $365,000 | 434 | $328,000 |
| February 2006 | 4,399 | $369,900 | 321 | $317,000 |
| January 2006 | 4,244 | $370,000 | 325 | $325,000 |
| December 2005 | 4,039 | $375,000 | 385 | $319,900 |
| November 2005 | 4,431 | $376,895 | 443 | $331,000 |
| October 2005 | 4,695 | $376,900 | 559 | $335,000 |
| September 2005 | 4,565 | $380,000 | 603 | $336,500 |
| August 2005 | 4,368 | $385,250 | 695 | $334,950 |
| July 2005 | 3,860 | $387,000 | 677 | $345,000 |
| June 2005 | 3,411 | $384,500 | 607 | $335,000 |
| May 2005 | 3,113 | $375,000 | 717 | $326,000 |
| April 2005 | 2,808 | $365,000 | 650 | $315,000 |
| March 2005 | 2,611 | $350,000 | 660 | $309,000 |
| February 2005 | 2,198 | $348,250 | 411 | $301,000 |
| January 2005 | 2,078 | $349,000 | 381 | $295,000 |
But the more concerning number to me is the number of units under contract (or Pending). There were 217 homes are under contract at the end of July. That is a disturbingly low number relative to recent months. For reference take a look at the Pending numbers in the table below and see how they’ve converted to closed sales over the past few months.
| Month | # of Pendings | # of Solds |
|---|---|---|
| March 2007 | 418 | 372 |
| April 2007 | 426 | 379 |
| May 2007 | 413 | 411 |
| June 2007 | 413 | 334 |
| July 2007 | 217 | 344 |
| August 2007 | ? |
Keep in mind that transactions typically take 30 – 45 days to close. So July’s 217 Pendings will drive August’s units sold. The last couple of months we’ve observed about an 83% conversion rate of Pendings to Solds. But let’s not forget about the collapse of the mortgage industry last week. Many of these July escrows will fail to close because the funding has been pulled. What proportion of escrows will fall out? I do not feel that 33% is too dire of a prediction. If correct, expect August Solds to total closer to 150, rather than the ~350 homes a month that have been selling in Reno-Sparks. Ouch!
For new readers to the Reno Realty Blog, the median table above is updated on a monthly basis. The median home price data reported covers the cities of Reno and Sparks, NV. Data courtesy of the Northern Nevada Regional MLS – August 2007.
Reno Ignoramus
5,346 listings.
217 pendings.
That is 4% of listings with a pending offer.
A couple of weeks ago I posted that the pendings:listings ratio was deteriorating. But wholly molley it is now down to 4:100. This is a major deterioration in just the past 2-3 months.
Last month 344 houses sold. 5,000 did not. It’s time to give up the story that we are selling through 9% or 10% of inventory every month. We are now around 6%-7% of inventory selling every month.
If you are even close in your estimate, Guy, that only 150 houses sell this month, that would put us at THREE YEARS of inventory.
We may be on the edge of some very major, very serious ugliness in this market. One thing is clear. The bottom is nowhere in sight.
Grand Wazoo
Don’t forget what just happened to “jumbo” loan financing this past week – a major, huge, spike in interest rates. This affects notes around $400K and up – a large percentage of the Reno market. Borrowed money for those deals just dried up as of a few days ago. Wait until the effects of that ripple through the Reno market in a month …
Bob
http://www.housingtracker.net/askingprices/Nevada/Reno-Sparks/
… a different tale.
Reno Ignoramus
Housingtracker.net tracks asking prices. You know, as in dream on and on and on prices.
Perry
Did I read the info wrong? For July solds are more than pendings.
GreenNV
Those pending numbers are truly startling. And how many of those are “pending loan” or “pending house”? Guy, I think you are about right on the 67% conversion rate on the July pendings, but I could see it going even lower. August is going to be a blood bath.
And how does the real estate community respond? Something like 50% of the current listings have relisted in the past few days to get a “bump” on the MLS. It is hard to have an impact when everyone is using slimy tactics, so you bump again the same day. The RSAR should be doing a deep ethics investigation on this one, and heads (and licenses) should role. Fat chance.
And are the sellers getting a clue? Not many, if Guy’s failed listing pitch over a $100,000 price difference is any indication. 3250 Spanish Springs Ct. on Craig’s List appraised at $1,050,000 but fell out of escrow. Now FSBO at $782,000, but the owner is holding the bag on 6 other properties (none of which are listed yet). They are going to have to add a new turn lane for everyone trying to exit the market at 9900 Wilbur May (Tanamara), but where are the price reductions?
Where are the grown-ups that can admit that they bet and lost, sell, and move on and actually get some sleep at night? It would have to be better to know how far screwed you are and be able to plan for the ramen rations than having to deal with the uncertainty.
I can tell you from personal experience how the lenders have been reacting through this reset. I applied for a $150,000 HELOC no doc (it was Citibank’s program, not trying to hide anything). Half way through, the approved amount dropped to $101,000. Mystically, most of my assets disappeared from the application. (I requested a playback from the recorded telephone application, but Citi politely refused) I doc’ed assets, and got the HELOC, but learned that the lenders will do just about anything to get out of their current contracts with borrowers until things shake out. That’s why I think the 67% closure rate for the current pendings may be optimistic.
And one of my 60 Sinners is on a buying streak!
Lindie
Well. If Guy is correct in his estimation that sales may drop to 150 for August, and we go to THREE YEARS of inventory, I think Reno gets national attention. National attention as one of the worst housing markets in America. National attention as one of the most overbloated speculative hyped up markets in America. THREE YEARS of inventory puts Reno up there with some housing markets in South Florida as the worst in the country.
There is a palpable sense of fear that is starting to grip the local REIC. They are finally admitting, at least to themselves, that they don’t even believe their own BS anymore. I hardly hear any more how all those rich Bay Area escapees are going to come here and prop up our market forever.
Casa de Dolor
Yes sir, I do live here. I was born here 56 years ago, and I have never seen anything like this real estate market. Notwithstanding that, I will take your advice, order a pizza and relax… relax in my leased home for another 12 months; then I will take a substantial down payment and purchase a home for $.50 on the dollar from someone who will be crying: “Oh god, real estate is going down the tubes…” and when that time comes, no one will be l’ing their “a” off.
Casa
2sleepy
Talk about the way lenders are reacting..did you see this?
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/15/MNI3RHTDO.DTL