September’s numbers show some dramatic changes. The first is the relatively few number of Solds for the month. 258 Solds represents a 25% decrease from last month; a 33% decrease from September of last year; and a 57% decrease from September of 2005. To look at the impact of this number another way: There are roughly 2,500 active real estate agents in the RSAR (Reno Sparks Association of Realtors). September’s 258 sales equates to one sale for every ten Realtors. The last time less than three hundred homes sold in a single month period in Reno-Sparks was January of 2000.
On a positive note for the first time since October of last year the median asking price decreased. Dropping from $349,900 last month to $345,000 for September and representing a 1.4% reduction in the asking price. Sellers may finally be realizing that they can not hold on to unrealistic prices and expect to sell. [recall last month I pointed out that, despite solds price declines, the median asking price had remained essentially unchanged for the last eleven months]
Unfortunately, offsetting this asking price decline is the continued downward spiral of the median sold price. September’s $288,500 represents a 2.2% decrease from last month.
Here are the numbers:
| Month and Year | # Homes For Sale | Median Asking $ | # Homes Sold | Median Sold $ |
|---|---|---|---|---|
| Sept 2007 | 5,046 | $345,000 | 258 | $288,500 |
| Aug 2007 | 5,457 | $349,900 | 318 | $295,000 |
| July 2007 | 5,442 | $350,000 | 348 | $296,498 |
| June 2007 | 5,442 | $349,900 | 345 | $300,000 |
| May 2007 | 5,207 | $349,900 | 412 | $295,250 |
| April 2007 | 4,952 | $349,900 | 378 | $296,000 |
| Mar 2007 | 4,716 | $349,900 | 372 | $293,700 |
| Feb 2007 | 4,459 | $347,000 | 312 | $285,000 |
| Jan 2007 | 4,875 | $348,900 | 324 | $280,000 |
| Dec 2006 | 4,712 | $349,000 | 337 | $290,000 |
| Nov 2006 | 5,339 | $349,900 | 318 | $300,000 |
| Oct 2006 | 5,760 | $349,925 | 409 | $299,900 |
| Sept 2006 | 6,073 | $354,000 | 385 | $299,900 |
| Aug 2006 | 6,350 | $355,000 | 372 | $306,650 |
| July 2006 | 6,408 | $359,900 | 411 | $322,900 |
| June 2006 | 6,440 | $359,900 | 463 | $325,000 |
| May 2006 | 5,955 | $364,900 | 425 | $316,000 |
| April 2006 | 5,203 | $364,000 | 412 | $316,000 |
| Mar 2006 | 4,900 | $365,000 | 434 | $328,000 |
| Feb 2006 | 4,403 | $369,900 | 321 | $317,000 |
| Jan 2006 | 4,248 | $370,000 | 325 | $325,000 |
| Dec 2005 | 4,043 | $375,000 | 385 | $319,900 |
| Nov 2005 | 4,435 | $376,895 | 443 | $331,000 |
| Oct 2005 | 4,697 | $376,900 | 559 | $335,000 |
| Sept 2005 | 4,567 | $380,000 | 603 | $336,500 |
| Aug 2005 | 4,370 | $385,700 | 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 |
| Mar 2005 | 2,611 | $350,000 | 660 | $309,000 |
| Feb 2005 | 2,198 | $348,250 | 411 | $301,000 |
| Jan 2005 | 2,078 | $349,000 | 381 | $295,000 |
Note: The median table above is updated on a monthly basis. The median home price data reported covers the cities of Reno, NV and Sparks, NV. Residential data includes Site/Stick Built and Condo/Townhouse. Data excludes Manufactured/Modular. Data courtesy of the Northern Nevada Regional MLS – October 2007.
Lindie
According to the glitzy advertisements placed by the Northern Nevada Board of Realtors in recent editions of the RGJ, there are about 3,300 licensed agents serving us here in Reno.
So, 258 closed deals last month. Let’s assume 2 agents for each deal (which of course is not necessarily the case). 516 agents made a paycheck last month. About 2,700, more or less, made nothing.
Let’s assume, for the sake of conversation, that the 258 sales were all at the $288,500 median. Let’s assume all these sales were at a 6% commission (also not necessarily so). So the per sale commission is $17,310, which is equally split between the buyer’s agent and the seller’s agent. So 516 agents last month made $8,655 and about 2,700 agents, more or less, made nada.
You just got to love the REIC and its addiction to disengenous spinjive. The Board of Realtors continues to spend major advertsisng dollars trying to convice us all that the market is fine, and it 3,300 strong are also just fine.
The REIC does, however, appear to be securing one benefit from it’s pay for play with the RGJ. The RGJ editors have apparently concluded that the state of the Reno housing market is not newsworthy, and nothing needs to be said about it.
Guy Johnson
Lindie,
Your math is correct. And I like your analysis. However, there is one more factor you left out. The commission split is paid to the agent’s broker (not the agent). That broker, in turn, takes her split and pays the remainder to the agent. With some brokerages, a new agent may start his career at a 50-50 split with his broker. Therefore, in the scenario you outline, that agent’s paycheck would be $4,327.5 (before expenses).
But your point is well taken, the majority of agents made nothing last month/quarter/year.
Lindie
Thanks, Guy. So it’s actually even more dismal for the agents than I suggested. You are absoluely correct that I forgot to factor in how all the realty offices keep the doors open.
Which raises another interesting point.
Let’s say those 258 sales at $288,500 generate $4,466,000 in total commissions (258 X $288.5k = $74,433,000 x6%). That means about $2,233,000 goes to the 516 agents and $2,233,000 goes to the brokers. When I think about all the real estate offices all over Reno-Sparks, all those free standing edifices and all those strip mall satellite offices and what it must take to keep all those lights on and make all the note payments, or rent, and all the other expenses, $2.3 million spread over all those offices does not seem like it would be enough.
GreenNV
For what its worth, Builder sales of new SFR’s pretty much track Guy’s figures. About a 38% drop from August to September 2007 (156 to 97) and a 62% drop Y/Y (256 to 97).
It is hard to compare anything to August 2007 – sales were way above what anyone was expecting given the credit mess.
The listed REOs simply aren’t selling. The amount the banks decide to write off in the next few months will set the market. I don’t think they are ready or prepared yet to write the full 20% second, though I’ve seen a couple of these happen.
2sleepy
I keep hearing about Reno being one of the ‘worst’ markets, but dang, some of the others I’m looking at seem worse:
http://flippersintrouble.blogspot.com/
http://bubbletracking.blogspot.com/2007/10/new-record-for-phoenix-at-66229.html
http://www.modbee.com/2098/story/70683.html?ref=patrick.net
http://seekingalpha.com/article/48276-think-housing-s-bad-you-ain-t-seen-nothing-yet?
Oh by the way, I was in Phoenix recently and asked my client how the housing market was, she said- “people don’t bother trying to sell anymore, they just pack their stuff and move out”