The number of homes listed for sale fell in November. A 7.6% decrease from the preceding month. And though the decrease can be attributed to seasonality factors (i.e. many home Sellers take their properties off the market during the holidays), year-over-year, the number of homes listed on the MLS in November 2007 was down 13.9% from November 2006.
The number of houses sold for November was down 13% from October. Again, this is mostly due to seasonality factors (i.e. Buyers are too busy shopping for holiday gifts to be shopping for houses). However, the October to November decrease was not as pronounced as last year’s 22% decrease, or 2005’s 20% October to November drop.
Despite the positive spin, the fact remains that only 229 homes sold in November. But with a median sales price of $288,195, a slight increase over October’s median sales price, that’s two months in a row of median price increases. Similarly the median For Sale price has also increased for the second consecutive month. Has the market begun a turnaround? Not likely. Two months does not a trend make. But the numbers were not expected, and interesting to note nonetheless.
| Month and Year | # Homes For Sale | Median Asking $ | # Homes Sold | Median Sold $ |
|---|---|---|---|---|
| Nov 2007 | 4,600 | $339,000 | 229 | $288,195 |
| Oct 2007 | 4,978 | $338,000 | 263 | $287,000 |
| Sept 2007 | 5,126 | $335,950 | 269 | $285,000 |
| Aug 2007 | 5,592 | $339,898 | 348 | $295,000 |
| July 2007 | 5,564 | $340,000 | 351 | $295,995 |
| June 2007 | 5,518 | $344,900 | 345 | $300,000 |
| May 2007 | 5,269 | $347,500 | 412 | $295,250 |
| April 2007 | 4,995 | $349,900 | 378 | $296,000 |
| Mar 2007 | 4,730 | $349,000 | 373 | $294,900 |
| Feb 2007 | 4,475 | $345,000 | 312 | $285,000 |
| Jan 2007 | 4,882 | $347,000 | 324 | $280,000 |
| Dec 2006 | 4,718 | $348,545 | 337 | $290,000 |
| Nov 2006 | 5,344 | $349,900 | 318 | $300,000 |
| Oct 2006 | 5,760 | $349,900 | 409 | $299,900 |
| Sept 2006 | 6,072 | $352,948 | 385 | $299,900 |
| Aug 2006 | 6,347 | $355,000 | 372 | $306,650 |
| July 2006 | 6,407 | $359,900 | 411 | $322,900 |
| June 2006 | 6,439 | $359,900 | 463 | $325,000 |
| May 2006 | 5,954 | $364,900 | 425 | $316,000 |
| April 2006 | 5,201 | $363,999 | 412 | $316,000 |
| Mar 2006 | 4,898 | $365,000 | 434 | $328,000 |
| Feb 2006 | 4,400 | $369,900 | 321 | $317,000 |
| Jan 2006 | 4,245 | $370,000 | 325 | $325,000 |
| Dec 2005 | 4,040 | $375,000 | 385 | $319,900 |
| Nov 2005 | 4,432 | $376,448 | 443 | $331,000 |
| Oct 2005 | 4,694 | $376,700 | 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 – December 2007.
Mike Van H
It’s wild how much the median asking and median sold can fluctuate from month to month. What’s the main cause of that? Speculation? Or are those normal up and down fluctuations?
smarten
Guy asks whether “the market [has] begun a turnaround?” I don’t think so and the reason is NOT because “two months does not a trend make.”
When you have a very small number of sales within a given period, the median sales prices IMO essentially becomes meaningless because few sales at a lower sales point and a larger number of sales at a higher sales point can “skew” the median; it’s simply not a large enough pool to start making sweeping generalizations about. Therefore, I say so what if the median sales price is [surprisingly] increasing.
What I find most interesting is the steady decrease in the number of sales; and no, I don’t think the reason is seasonal. In September [just two months ago], nearly 7% of all listings were selling. Now we’re down to less than 5% and if the number of listings had not “seasonally” dropped, we’d be down to less than 4.5%!
I think if we saw more sales, we’d see the median price drop instead of increase. However I don’t think we’ll be able to test my theory anytime soon because I expect the number of monthly sales to continue dropping until March of next year at the earliest.
BanteringBear
“Despite the positive spin, the fact remains that only 229 homes sold in November.”
This is the number that stands out to me. When was the last time that monthly sales numbers were this low? The market is simply drying up, due in large part to the credit crunch. It’s going to be one long winter for sellers.
The fact that inventories have dropped a bit signifies, to me, that many fantasy sellers have withdrawn from the marketplace. I also suspect that many of their bonehead agents have followed suit.
MikeZ
4,600 for sale. 229 sold. That’s 20 months of inventory. Ouch.
Lindie
Why is it that we always hear, even from Diane, that houses are selling for as much as 95% of asking? Go back and look at Diane’s last several monthly market reports.
Yet, from this data furnished by Guy, it is clear that houses are selling nowhere near 95% of asking. For the last year, it appears that houses are selling for about 85% of asking, not 95%.
First we were told that about 10%-11% of all listings were selling every month. Then, that was corected to reflect the reality that in fact less than half of that number was selling. More like 5%-6%.
Now, it appears that the actual median sales price as a percentage of median asking price is significantly overstated. There is not one month in the last year that sales prices even came close to being 95% of asking, or even 90%.
MikeZ
RE: sale price v. asking price, 95% or 85%?
Lindie, welcome to the mosaic of inconsistently applied real estate metrics.
Sometimes, asking v. sale only includes those that actually sell. The data Guy supplied obviously includes all houses for sale, not just sales.
Since overpriced houses aren’t selling, Guy’s data would tend to show a lower percentage for sale v. asking.
Likewise, DOM is meaningless as collected today; it only includes houses that actually sell.
smarten
So if the percentage of sales to asking prices and DOMs are meaningless statistics [since they only include houses that actually sell]; and median pricing is immaterial because it’s drawn from a pool [of sales] which is too small to be reliable; what’s really left over to gauge the state of the Reno-Sparks SFR market?
NAS
1. Nice to have everyone retreat to their corner of the ring. Many readers/contributors (including myself) tune out & off when this happens.
2. Smarten asked “what’s left over to gauge the state of the Reno-Sparks market?” One of my core resources is tracking foreclosures. Says a lot about the over health of a housing market.
Washoe County:
Preforeclosures: 1,098
Sheriff sales: 57
Foreclosures: 265
BK: 311
FSBO: 51
If it makes you feel any better, here is Sacramento County, CA:
Preforclosures: 8,986
Sheriff: 496
Foreclosoure: 5,026
BK: 2,348
FSBO: 48
larry lowball
Hey, guys–allow me to come out of the closet; I’m not Diane or Guy’s publicist–or particularly knowledgable enough on the Reno real estate market to talk smack with the other trash-talkers on this site–whom I might add–are pretty creative with their barbs and bickering.
However, as someone who reads many real estate blogs that are filled with bias, puff, and promotion–you do have something special here with Diane and Guy’s Blog–their blog is informative, as frank as one can be while working in the business, and a good read whether you care anything about Reno at all.
Just as stock message boards get ruined with personal attacks, this blog could get ugly if things spiral out of control–and that’s not fair to Diane, Guy, or anyone who keeps a full-time gig–and tries to bring some honesty, integrity, and frankness, to a business right now–where approval ratings are lower than journalists or congressmen.
Diane and Guy have a good thing going–and you should appreciate it.
There is a happy medium, though. I understand people’s frustrations–and willingness to bust chops on those less intelligent, fortunate, or who suffer from whatever deficiency or dementia you beleive they have.
Everyone who lost money flipping real estate is not bitter at the world while they sit home all day watching Oprah, Springer, and Ellen. And not everyone who sat back and said I am going to wait to buy because this is a bubble–is the next Jonas Salk or Jerry Yang.
Still, real estate is a hot button everywhere these days.
So, here is my suggestion–perhaps Diane and Guy can create a thread where you can take out your frustrations on everyone from those with a Century 21 jacket, sinners who are now holding 20 properties, fellow bloggers, and those cubicle peons at the bank who suffer from Phil Collins’ Disease (no reply at all) when you try to bid on any property they hold.
The best real estate barb or joke that doesn’t attack anyone personally–gets a $25 gift certificate to Diane’s favorite coffee shop–funded by yours truly.
Guy and Diane will be the final judge–contest ends Jan. 1, 2008.
A disclaimer: I did have coffee with Diane and her husband at this shop last month.
Now, let’s go.
— Your mother is so fat no bank could ever get her out of the house to foreclose.
— Your father is so dumb he thinks escrow was the part played by Ray Bolger in the Wizard of Oz.
Ok, now it’s up to Diane and Guy to create the thread; and you to put your talents and frustrations to a good cause–$25 worth of coffee.
Thanks,
Larry Lowball.
YinReno
Guy, what would a “normal” or “normalized” inventory period (months) look like when the market is balanced? I’m seeing folks quoting 20 months of inventory, for example, right now. Obviously that’s death from a seller’s perspective, but also likely means there is further reduction in values ahead. Does 1-2 months inventory mean it’s a HOT seller’s market? Does 6+ months imply a HOT buyer’s market? Does 3-5 months mean it’s balanced?
Move to Reno?
Could be that the market is in balance now, that any seller that wants to sell can do so by listing at a reasonable price. A lot (if not most) sellers will only sell IF they can get their price. The buyers are waiting for their property to appear at a reasonable price. So far it looks like there are enough sellers lowering their prices to keep the buyers occupied. This frozen market could go on for years with a large over hang of wannabe sellers. My guess is that inventory will only go down when a massive wave of buyers appear that have to buy immediately, thereby raising prices or the wannabe sellers get tried of waiting (years).
MikeZ
RE: “what’s really left over to gauge the state of the Reno-Sparks SFR market?”
Months of unsold inventory and sale price per sq ft are a bit more consistent and harder to fudge.
GuyJohnson
YinReno,
You’ve asked a good question. However, not one for which I can provide a definitive answer. I think the answer is rather subjective. Ask five agents and you’ll get five different answers. I’ve heard that less than five months of inventory can be called a Seller’s market, and more than eight months of inventory can be called a Buyer’s market.
In an effort to answer your question, I’ve asked a nationally known real estate instructor. His response (paraphrased), “Traditionally, six months of inventory can be thought of as a ‘par’ market. Less than six months you’re in a Seller’s market. More than that, you’re in a Buyer’s market. The farther from par you find yourself, the more extreme the market conditions.”
Therefore, I’d say we’re in an extreme Buyer’s market.
Lindie
“My guess is that inventory will only go down when a massive wave of buyers appear that have to buy immediately.”
Uh huh. That will occur at the same time Jimmy Hoffa shows up for dinner.
Lindie
“I’d say we are in an extreme Buyer’s market.”
Guy, I appreciate your unbridled optimism.
But with 20 months of inventory in the overall market, two years of inventory in the over $500K segment, and infinity beyond that, with 5% of all listings selling every month, and with sales volume fading into the sunset, I submit we are in nothing more than a Sucker’s market now.
smarten
A sucker’s market Lindie? I don’t think so.
Let’s take craigslist PostingID: 505132049; a brand new 4BD/4+2-1/2BA, 4,615 square foot executive home on the 17th fairway at Montreux [yes I admit I’m still interested in Montreux]. This is a spec home that was constructed by a Bay Area developer. The home was briefly listed for sale [can someone please share the details?] and when it received no bites [surprise], it was listed for rent at $3,950/month where it sits today [because as I’ve shared with the group, rents are based upon simple market supply and demand and in the Reno SFR rental market, there’s essentially no demand for rents much above $3K-$3.3K/month].
I’ve spoken to the owner-builder and asked if an option to purchase can be secured as part of the rental, and the answer is “that would be ideal.”
So would I be a “sucker” to rent this home on a lease/option basis if the option price is determined when the option is exercised [assuming it’s every exercised], presumably several years from now]?
The current market represents opportunities to both the informed and less informed. But IMO, I don’t both are “suckers.”
Lindie
Oh Smarten, most people don’t have the keen insight, the piercing analytic ability, and the wisdom and experience that you do.
I was speaking of the more pedestrian buyer who is thinking about buying a track house in Wingfield Springs or Double Diamond. For Joe Six Pack, who couldn’t afford to landscape a house at Montreux, let alone buy one, I stand by my comment that this is a sucker’s market.