One of my Chase colleagues up at the lake recently posted an informative market report about current trends on the north shore. What I love about Craig Meyer is that he isn’t much of a candy-coater, so you’ll probably like him.
Two more Chase colleagues, Lexi Cerretti and Mark Buergin, over in our Incline office track that market pretty closely. Here is their latest market report.
smarten
Well I’m sorry to diss your colleagues to the south Diane, but these people are simple out to lunch and in absolute denial [little wonder their clients are in the same state].
Here’s a question for your Mark and Lexi. 107 sales YTD. 350 active members of the Incline Village [“IV”]/Crystal Bay [“CB”] MLS. How many sales have they been a part of in 2007 [IV/CB ONLY please]?
Okay, let’s ask the question a bit differently. Nearly 500 active listings on the IV/CB MLS. How many are Mark’s and Lexi’s? 2 [665 Martis Peak at $1.395M, and 469 Fairview at $5.199M]. Now, how many days on the market for each?
So consider the source.
I’m here in Incline Village. I drive down the streets and see the for sale signs every day. And I get daily reports of IV/CB sales, listings, price reductions, etc. thanks to Don Kanare [www.insideincline.com].
Making the kinds of conclusions these people are making and applying them across the board to nearly 8,000 IV/CB residential properties based upon a paltry 107 sales YTD is not only UN-scientific; it’s irresponsible. It makes the uninformed buyer believe IV/CB is special and immune from everything else that’s going on outside of its walls and if they don’t buy now, the $1.2M home they’re really interested in is soon going to cost hundreds of thousands more.
Mark and Lexi have told you of two $9M sales this year. And now the $32M listing they refer to is in escrow after only 10 days, having received multiple offers. Although it is true “the trend for high-end home sales continues in Incline Village, in sharp contrast to the continued slowing markets in surrounding Reno, Nevada, Sacramento, California and other Lake Tahoe real estate markets,” Mark and Lexi haven’t shared with you that “high-end” in IV/CB means $5M plus and 7,000 square feet or more.
Now what relevance do numbers like these have to 99.99% of the population?
So to extrapolate “high end” of the market conclusions to the market as a whole based upon a couple of mega sales makes about as much sense as paying $800K for a barn in Reno. We’ve discussed this subject before; take 11 sales/month; throw in a $9M, $32M and a couple of $2M-$3M sales and is it any wonder the average sales [or for that matter median] price is going up?
Now what about the other 477 residential properties just on the IV/CB MLS this month? Or what about the 2,500-3,000 for the year? When only 4% of all properties listed for sale and less than 3% of all residential properties [whether or not for sale] in this micro-market are actually selling in a 12 month period, there are really only two conclusions to make:
Either there are no sellers, or no buyers. Now which do you think describes the IV/CB market? Since 11 sales/month in IV/CB corresponds to roughly 230 sales/month in Reno/Sparks, I’m confident the people on this blog are equipped to evaluate the real strength of the IV/CB residential real estate market.
Ann O.
I respect smarten’s opinions, but I don’t think these realtors will mislead very many people. A skeptical person can see they are choosing the data that present the most positive picture.
If you want to talk about absolute denial, a friend who is a real estate agent and building contractor in Vancouver wrote this to me this evening: “I have no work and the market is flat. I do hope it picks up this year.” This year???? I wish Diane had a Vancouver listing in the “Markets” list so I could send my friend to it and help her get a clue.
A few months ago she was surprised when she put her rentals up for sale and no one even looked at them. How could anyone with access to the MLS not see this coming? In June of last year I told her about the rising inventory in Northern Nevada, and she assured me that people (a lot of Californians) were still buying homes in Vancouver and that her phone rang constantly. She finished her last building contract early this year. Now she’s scared. But hoping it gets better THIS YEAR!
smarten
For Mark and Lexi’s benefit, take a look at yesterday’s 15% [$96,000] price REDUCTION for 203 Nadine Court in Incline Village? How does $599,000 for a remodeled 4BR/3BA, 1820 sq. ft. SFR w/2 car attached garage compare to the picture you’ve painted of AVERAGE $1.9M sales?
And guess what? Nadine Court STILL hasn’t sold!
And guess what again? The current owner[s] paid $610,000 [before his/her/their remodel] in April of 2005, and now look at the loss he’s/she’s/their about to realize [assuming this property actually sells].
Like I said before, take out the couple of mega sales unique to Incline Village and Nadine Court becomes the poster child for today’s IV/CB SFR market. Sign me up Scotty!
BanteringBear
Thank you Smarten, for taking the time and having the patience to expose Lexi and Mark for who they really are; a couple of lying shills. The kind of misinformation they spew is why realtors have a reputation every bit as bad, or worse, than car salesmen.
Instead of calling a spade a spade, Lexi and Mark cherry pick information, spinning a web of lies to prey upon the uninformed, using fear as a tool to ultimately pushing them into what could be the largest financial mistake of their lives. Fortunately, as Ann points out, most people aren’t THAT stupid. Nice try Lexi and Mark, but you ARE the greatest fools.
BanteringBear
“…using fear as a tool to ultimately PUSH them…”
Sorry for the typo…am in a hurry. I wish there was an edit button.
Tom
Yikes! Lighten up, guys. They are people trying to sell, in a tough business. Their opinions or commentary may differ from yours, but they still deserve rebuttal with respect and courtesy. Besides, that photo of Lexi caught my eye, and I normally blow right by things like that.
As our wise old Superior Court Judge Stewart would say, “Now, take it easy, Mr. Bear, I can understand your response without you impugning the other folks before the Court.”
Happy Friday, everyone!
Jerry
With all due respect to you Tom, these so-called opinions are getting people into some serious financial trouble. In case you hadn’t noticed, we are in a historic declining market with no bottom in sight. Affordability indexes are far too high for the area and along with a glut of unsold homes and a credit crunch, this is a perfect storm for any buyer right now.
For anybody to come out pushing buyers to buy right now based a distorted statistics is outright misleading at best. These people simply desire to profit based on buying in a declining market. As the old saying goes, a fool and his money are quickly parted. It is one thing for Mark and Lexi to find fools but to sell them a fools message is unethical.
BTW, I too likes Lexi’s picture. Too bad the beauty only appears to be skin deep in this case.
DERRICK
I have to agree with most of the posts on this subject. No wonder realtors image has been distorted and thrown out to the trash in only 5 years!
These 2 are the perfect example why, truly sad and truly pathetic
Lindie
There is a line between ethical promotion and disingenous misrepresentation. Any objective look at the real state of the Incline Village/Crystal Bay market over the past year indicates that the market is not nearly so robust as these folks suggest. But folks, when you go to the county fair, do you really expect to get the truth from the carnival barkers? As the market declines even further, many hungry realtors will more and more say anything to make a commission buck. It may now be an insult to used car salespeople to make the comparison. At least when you go talk to a used car guy, you know you are going to get spinjive. Nobody thinks the car salesguy is working for you. It is much more disingenous to dress up the sales pitch in the guise of “wer’e here only to serve your interests.”
smarten
I have a question for the more knowledgeable out there. How exactly do you compute what the median sales price is?
For example, let’s assume we have 2 sales in a month. One is at $200K, and the other is at $1M. What’s the median sales price [the price at which half of the sales are higher and half are lower]? Is the answer $201K? How about $999K? Or is it something else?
Let’s assume 10 sales in a month. One is at $400K; another is at $450K; another is at $600K; another is at $1M; another is at $1.2M; and 5 are at $3.5M. What’s the median sales price?
And when you provide the answer to this hypothetical, can you please explain the mathematical formula that results in your answer?
Thanks to all.
Lindie
Smarten:
When there is an odd number of numbers, the median is simply the middle number. When there is an even number of numbers, then the median is the mean (average) of the two middle numbers.
In both of your examples there is an even number of numbers. When there are only two numbers, as in your first example, the median is also the mean. In this case it is $600,000. Since the sample of numbers is so little, the median is limited as a piece of information. In your second example, we have:
400,000
450,000
600,000
1,000,000
1,200,000
3,500,000
3,500,000
3,500,000
3,500,000
3,500,000
Since there are an even number of numbers, the median is the mean of the two middle numbers (1,200,000 and 3,500,000), which is 2,350,000.
Let’s say, however, that there was one more number in the above set, giving us an odd number of numbers. Where that number falls in the set will determine the median.
So, if we have;
400,000
450,000
600,000
1,000,000,
1,100,000
1,200,000
3,500,000
3,500,000
3,500,000
3,500,000
3,500,000
The median is 1,200,000
However, suppose we have:
400,000
450,000
600,000
1,000,000
1,200,000
3,500,000
3,500,000
3,500,000
3,500,000,
3,500,000
3,500,000
The median is 3,500,000
As you can see, with a small number of numbers, the median can change drastically with the addition of just one more number to the set. The larger the set of numbers, the more meaningful the median is as a piece of information.
smarten
Thank you Lindie –
So if you throw out something low as well as something high; because both ends of the spectrum may skew the results; the median remains unaffected; correct?
And here I thought there was some fancy mathematical formula.
Lindie
Smarten:
You are correct that if you throw out the lowest number and the highest number the median will not change. The median is not a complicated thing. It is simply the middle point in a set of numbers, the point at which one-half the numbers are higher and one-half are lower. Think of a median on a highway, which goes down the middle…..:)
Kevin
It is a shame that the critical commentary is coupled with weird compliments on one of the subjects’ appearance, as if it was at all relevant.
smarten
Kevin wrote “It is a shame that the critical commentary is coupled with weird compliments on one of the subjects’ appearance.”
I think this comment warrants another tangential commentary.
Why, exactly, do real estate salespersons feel the RELEVANCY to publish their pictures along with their listings/open houses? If they’re attractive females, aren’t they really encouraging comments of the very kind Kevin feels are “irrelevant?”
I know of a particular circumstance [I’m sure collectively we know a whole lot more] where a man attended an open house specifically because of the published picture of an attractive female agent. Like the agent didn’t realize this might be a likely consequence of publishing her picture along with notice of the open house?
Having opened the door, whether relevant or not, I feel the “weird compliments” are fair game.
NAS
Off the trail somewhat, but I agree with Smarten and admit to wondering about this for sometime.
Odd that in a “profession” presenting themselves as financial wizards continue to think the photoshop corrected head shots have relevance. What does posing with a dog, a horse, wearing a cowboy hat, or squeezing into a tee shirt have to do with financial savvy. Or, did I just answer that myself?
Ann O.
I’m not a real estate agent and never have been; I am answering Smarten’s and NAS’s questions as a middle-aged woman and a past and potential home seller and buyer.
I think the photos are all about building a comfort level. If you don’t have any friends or friends of friends in real estate, and you don’t want to throw a dart at the Yellow Pages, a photo might make you feel a little more comfortable about one person than another.
And everyone’s different. I, for one, would feel more comfortable with someone who is pictured hugging a dog than someone who shown in a cowboy hat. In fact, I bet the smart agents experiment with different photos to see what kind of response they get.
But humans are always attracted to physical beauty. Studies have shown, for example, that fat people are discriminated against in the job market and that tall men make more money. So I think that an attractive real estate agent including a photo in advertising is smart. Whether the photo shows an attractive person or a popular breed of dog, I still consider it building a comfort level with potential customers and therefore good marketing.
I don’t know how agents’ feel about the comments on their appearance, but I think they have to be thick skinned just to be in the real estate business. Look at what Diane, Guy, and their guest bloggers have to put up with!
Sean
Kind of off this topic but check out mls #70021987 in sparks in a nice neighborhood near where i’m renting a house listed at 315k. It sold in 10/2003 for 323k. So this shows we are back down to 2003 prices and i believe we have even more to drop with the number of arms about to adjust on all the properties sold in 04-06 that are now worth 10-25% less than what they bought them for/owe!
Lindie
Hey Sean, that’s a good find. This is the first house I have seen that will sell below a 2003 price.
But, Sean, we all know that prices in Reno-Sparks never fall, and that you can’t ever lose money buying a house in Reno-Sparks, because Reno is special, and everybody wants to live here, and any day now prices will take off again and you better buy now or get priced out forever. So surely this house is an abberation, because they aren’t making any more land here. I know this to be true because it is what all the realtors told us, and in fact, the realtors with the prettiest pictures told us this the most.
GreenNV
Sean, 1725 Southview has all the signs of being a short sale. Refi 9/25 $345,500 and HELOC 8/06 $36,000. Both loans are with Countrywide, notiously difficult to work with on a short sale. They aren’t going to be too happy writing off $100,000 in loans, penalties and comissions.
I’ll start believing that resale prices have been bombed back into 2003 when I see a slew of CLOSED transactions at 2003 comps. Things look closer to Q3/4 2004 to me.
DERRICK
Tell you what shawn, If you think 70021987 is a good deal then I will sell you my 2 story 2,400sq/ft stucco home (tile roof), new kitchen (25k), 1,800sft of brazillian cherry wood floors, A beautifully landscaped .33 acre backyard complete with a 1000sqft paver patio, mature tree’s,plants,shrubs,etc.. that backs up to a park (no rear neighbors) for lets say 350k?? does 70021987 seem a decent deal anymore?
Nahhhh Just kidding but maybe in 10 years I will 😉
MIke Van H
Here’s my answer for the picture inquiry above…Real Estate agents are kind of funny. I have built web sites for two independent agents and one large broker, and if there’s one thing that is consistent, it’s the cattle mentality. God forbid if you suggest something to them other realtors AREN’T doing, you really have to talk them into it, even when the benefit is obvious. http://www.phillyh2o.org/backpages/ReaEstate_images/RealEstateComposite2.jpg when you look at this interesting real estate ad page from 1966, we can see that there are agents, who list their name in big letters on some of the ads, but no pictures of agents. Out of sheer boredom this morning I google-imaged and e-bayed various decades of real estate advertising, and noticed the personification of the real estate agent really didnt start happening in advertising until the 1980s, when ads like this http://www.downtownmakeover.com/18.jpg started to appear on a mass scale, on a national scale, leading me to believe it was a national but regionalized campaign by the NAR to start bringing consistency into the business. If you look for NAR ads around that time span, and compare them to regional ads by larger brokers, the connection is obvious. And from there, it just took off and stuck to this day. Perhaps the NAR really started pushing realtors around that time as something essential..and so the spinning began.
smarten
Our friend Derrick wrote, “If you think 70021987 is a good deal then I will sell you my 2 story 2,400sq/ft stucco home (tile roof), new kitchen (25k)…”
$25K on a new, remodeled kitchen? Must be pretty high end Derrick given the average kitchen remodel these days runs between $50K-$75K and if you really want to go high end, you’re looking at $150K or even more!
This is the very reason the more knowledgeable homebuyer would really rather sellers like you [hahaha] did NOTHING to improve their homes [assuming you want more money for the improvements you’ve made]. It’s likely most homeowners would opt to tear out $25K worth of kitchen improvements to start over again and do it right.
But again, if you were over 28 years old, you’d know this.
DERRICK
The “AVERAGE” kitchen remodel is also done by contractors and not the homeowners smarten.. did you know that too? Since I know how to do cabinetry,countertops, plumbing,electrical,flooring, and installing appliances I easily saved 15k in labor costs.
that being said the kitchen would easily run about 40-50k for MOST people.
rundown on remodel:
honey maple cabinetry (hardwood frames)
15inch glass inlayed cabinets on top, with molding accent
granite counter tops
double oven,dishwasher,top mount gas range ( all bosch appliances)
brazillian cherry floors (pre-finished, also installed myself)
full wine bar, rack above, wine refrigerator below counter
Kohler double sink with kohler faucet (undermount)
mosaic marble,travertine,and slate backsplash
including the 1,800 sg ft of brazillian cherry total renovation costs= 32k ( thats doing 90% of the work MYSELF smarten)
do you really think that would cost 32k if you paid a professional for 90% ? I DONT THINK SO
I’m thinking somewhere in the 50-60k range uncluding flooring..
DERRICK
The “AVERAGE” kitchen remodel is also done by contractors and not the homeowners smarten.. did you know that too? Since I know how to do cabinetry,countertops, plumbing,electrical,flooring, and installing appliances I easily saved 15k in labor costs.
that being said the kitchen would easily run about 40-50k for MOST people.
rundown on remodel:
honey maple cabinetry (hardwood frames)
15inch glass inlayed cabinets on top, with molding accent
granite counter tops
double oven,dishwasher,top mount gas range ( all bosch appliances)
brazillian cherry floors (pre-finished, also installed myself)
full wine bar, rack above, wine refrigerator below counter
Kohler double sink with kohler faucet (undermount)
mosaic marble,travertine,and slate backsplash
including the 1,800 sg ft of brazillian cherry total renovation costs= 32k ( thats doing 90% of the work MYSELF smarten)
do you really think that would cost 32k if you paid a professional for 90% ? I DONT THINK SO
I’m thinking somewhere in the 50-60k range uncluding flooring..
Lexi Cerretti
Thanks to those of you who commented on the market data we have put out on Incline Village single family home sales. I do respect the opinions of everyone, and some of the points they have made are very valid.
In my latest report for single family home sales, I looked at year over year data through the end of September- 2007 compared to 2006. I reported median and average sales prices. The median price for a SF home increase 15% over that period, while the average price increase 30%. S Martin’s diagram of median prices is good- if you have a data set large enough, the median price is less likely to be skewed by “outlyers”, in this case, particulary high priced sales not indicative of the rest of the market. In this case, the 30% reflects some very high end sales, and that is why 15% median price growth is more reflective of the market.
My intent is not to “cherry pick” the data. I ran the figures and reported on median price, average price, days on market, sales volume, list versus selling price, and sales totals for neighborhoods. However, previous comments are on target that I should put the data forward on home sales under $1.5 million, because there is a dichotemy in the Incline market. Point well taken, and I am going to run the sales stats for high end versus lower priced sales to give viewers a more clear picture of our market.
I am well aware of the conditions in many markets that have continued to deteriorate. I have friends who bought in the height of the Reno market, borrowed against their home to renovate it, planning to live there as a primary residence (no speculative investment) and now are facing declining home value and mounting debt. The growth in markets like Reno, and even more so in Las Vegas, Sacramento, Tampa and even Phoenix are all over the headlines, and hard-working people who put their life savings into purchasing a home in the past market, are suffering big losses.
I am not sugar-coating anything. The lower end market in Incline is not moving- we report that many sellers are waiting longer to get their asking prices, which is evident in longer days on market. Many people are not willing to sell for less than their desired price, so they are either letting the homes sit on the market, or withdrawing them.
One reader mentioned two of our listings in Incline that he thinks have been on the market for a long time. 469 Fairview has been on the market since spring, and 665 Martis Peak only for about 75 days. Average DOM from our last report was 185, so I am not sure what his point was, there. We work with our buyers and have gotten a recent price reduction on Fairview. In our defense, Mark has been in real estate for 30 years, and has had 2 Lakeshore Drive sales this year along with a sale on Jennifer. This doesn’t break any sales records, but we are working with clients- buyers and sellers- to list homes for a price we feel the market will bear, and to give our sellers the best insight we can into the market.
Incline Village is very unique. The tax advantages of being on the Nevada side of the lake coupled with the limited number of lots and demand for these have stabilized this market, where neighboring markets like Reno and other areas around the lake have dropped. We see that the upper end of the market is moving, the lower end of the market is stagnant, and that translates to buying opportunities, especially in the lower end where prices have fallen. I practice what I preach- my husband is a builder, and we bought a “fixer” a few years ago for $610k when the market was hot. We remodeled, live in our home, and love that we have the opportunity to live in the same town where my husband grew up. We made a great investment that we know will appreciate in time. This market is an opportunity for other buyers to get into this market, not for speculative reasons, but because they love the Lake like we do, and might be able to afford a home here now where they couldn’t have a few years ago.
As for sellers, we do comprehensive sales comparisons to help them price their homes and keep them updated on market conditions. One seller I work with is not willing to sell her home at a lower price, but wants to keep it on the market. She does not need to sell, and she is aware of what homes similar to to hers are selling for. Every situation is different, and what I feel is my absolute duty is to provide information for buyers and sellers to make educated decisions.
The last piece I feel obligated to comment on is the correlation between my air-brushed Chase agent photo and my intelligence. I think all the Chase photos look like glamour shots, maybe I will blacken a couple of teeth in my photo so people will actually read all of the data I put forward! My old hockey friends from Maine would get a kick out of it (I did play on a women’s ice hockey team for 5 years). I do actually have a background in statistics, quantitative methods, I have done site planning, permitting and design for residential and institutional development, GIS mapping, CAD design- I did my Masters thesis on a lake modeling project (mathematical modeling) to quantify phosphorus downloading into lakes in Maine. We got a DEP grant to mitigate the most vulnerable areas and made a lot of headway. I then helped start a web design firm in the 90’s and have done web site promotion and marketing since. I don’t want to sound defensive, but I am not as stupid as I look, oh well.
Thanks for reading, and I will followup with home sales stats for the under $1.5 million sector to clarify the dichotecmy in the Incline market.
Lexi Cerretti
Lexi Cerretti
Here is a summary of year to date single family homes sales data for Incline Village, not including PUD’s (freestanding townhomes). This is to Oct. 1, through the 3rd quarter.
Units Under $1 Mil sold dropped 17%:
2007 units sold under $1 million= 35
2006 units sold under $1 million= 42
Units Over $1 Mil sold up 31%:
2007 units sold over $1 Mil= 72
2006 units sold over $1 Mil= 50
$1 million plus units comprise about 70% of the single family home market in Incline Village.
For the 30% of the single family home market below $1 million, here are the sales figures to Oct. 1, through the 3rd quarter.
Average sales price of units under $1 Mil dropped 2%
2007 average price units under $1 Mil= $803,254
2006 average price units over $1 Mil= $818,355
Median sales price of units under $1 Mil dropped 4%
2007 median price units under $1 Mil= $810,000
2006 median price units over $1 Mil= $846,500
I hope this clarifies that home sales under $1 million are not strong this year over last. The median price is down 4% and aerage price down 2%. Note that the volume is down 17%.
The higher end market is moving, the lower end market is not. That is why we see opportunity for buyers, especially in home sales in the lower end. We don’t know if prices will drop further, but we know they are attractive relative to the upsurgence we saw a few years ago. Hope this is more “fair and balanced” reporting, I welcome your criticism and happy to provide more data.