Both the number of new homes sales and the number of re-sales in Washoe County increased for the month of March according the most recent data distributed by our friends at Ticor Title. March re-sales were up 15% over February’s units sold. And new home sales were up a whopping 48% over February’s new home sales.
Notices of Default (NODs) continue to skyrocket with another 437 recorded for March. That’s 14 a day. Excluding weekends, that’s more than 20 NODs recorded per day.
Click on the charts below to enlarge.
Timothy
I am surrounded by 3 foreclosures just on my street. On the street over, there are two. There are also 3-4 short sales I am aware of.
“NODs contnue to skyrocket with another 437 recorded for March. Thats 14 a day.”
I need somebody to explain to me how we can be talking about the bottom being on the horizon when the number of foreclosures “continue to skyrocket.” Just watching these REOs in my neighborhoood I see that it takes the banks months and months to get around to selling them. If there are 437 NODs in March, it’s going to take until next year before these even get listed for sale from my observation. Now I understabnd that not every NOD turns into an REO. But if only 25% of them do, that’s more than 100 REOs for sale sometime early next year. In just one month.
How can prices possibly bottom out when the numbers of REOs keeps escalating?
RSB
All this talk about the bottom being in sight might make some sense if the number of foreclosures was slowing, not rising. It might make some sense if there was a fixed number of REO properties that needed to be sold off over the next 8-9 months. Then, when they were all sold, the market could bottom. BUT, that is in no way what’s happening. Sure, by the end of the year maybe all the REO on the market today may be sold off. But what about all the REO that hits the market this September? That stuff sure isn’t going to be gone by December. And on and on we go.
RSB
Or, we could say that March’s new home sales was the third worst month ever.
Or, we could say that March’s new home sales were down a whopping 39% from march of ’07.
Or, we could say that March’s new home sales were down an even bigger whopping 55% from March of ’06.
I guess it just depends on how we want to spin it. There must be a memo out to all realtors now to only focus on month to month numbers, because YoY is way too dismal.
But there’s no way to spin away that NOD graph is there?
GreenNV
For the first half of April, we are standing at 257 NODs, 160 NOSs, and 138 TDs. The pace of defaults is increasing, and right now, if you get a NOD there is about a 70% change you will go all the way to foreclosure.
And get ready for the onslaught – there are more REOs getting prepped to go on the market than the number of REOs currently listed. Over 80% of these will be in the under $300,000 range. Can you say falling median?
RSB
Thanks GreenNV. So that would mean that of the 437 NODs recorded in March, about 300 of them will go all the way to foreclosure and become REO. Looks like we are on the way to 500 NODs for April. So about 350 of them will become REO. That’s 650 REO properties in the pipeline for later this year in just TWO months. At this pace, there are going to be 1000s of REO properties on the market by year end. Do you agree GreenNV?
Will somebody please explain to me how we can be seriously talking about a market bottom when there will soon be 1000s of REO properties on the market that the banks will be under more and more pressure to dump? If there are going to be more REOs on the market in October than there is today? Anybody?
konvpalto
As the number of houses for sale/REO increases, the houses/appartments for rent should become more scarce (as long as people stay in the area). Is there any statistics on how saturated the rental market in Reno is?
Sully
Assuming all the people that are in foreclosure are going to stay in the area, then there doesn’t seem to be enough available units for rent.
Six months ago I saw 8 places for rent within 1 block radius of me, now I see none.
Checking rentals.com (old rentclicks.com) I see about 70 for rent for 1150 – 4800/mo. The low one is in Cold Springs.
Mike
RSB, I may be pushing a little on the 70% figure, but that is where I see the number trending to in 4 months when the new NODs hit the courthouse steps.
The Center for Regional Studies has started tracking foreclosed home sales statistics http://www.nsbdc.org/what/data_statistics/gis/data_downloads/. 58 foreclosed SFR/condos sold in January, and 59 in February. That is a full 30% of the SFR/condo resales they reported for those months! Can’t wait for the March report.
So 1000’s of REOs flooding the market? You bet. My gut reaction is that the REOs are about to ease up in the North Valleys. The market there is starting to find it’s floor, so you have already been foreclosed on or can carry the freight. South Meadows, the next frontier!
RSB
Well I guess since nobody is willing to provide an answer, the answer must be obvious. With 1000s of REO properties coming on the market in the coming months, and perhaps 50% of all sales being a bank foreclosure, it is foolish to be talking about the bottom in prices being on the horizon.
SkrapGuy
I have a question for Diane/Guy/Green/whomever might know:
When was the last time the median price in Reno-Sparks was $264,000?
GreenNV
Sorry to have been “Mike” on the last comment. If I don’t sign off when I’ve been working on a new posting (yeah, some juicy stuff coming), my comments default to “Mike” and not GreenNV. I don’t mean to confuse anyone – just the quirks of this platform.
Center for Regional Studies had the unsold inventory of REOs at the end of 2007 at 525. 262 more were added in January and February, 117 sold, so 670 at the start of March. I show 253 more have been added since then. Assuming about 60 per month REO sales x 1.5 months = 90, that should put the inventory of listed or about to be listed REOs at 833 or so. That’s up 60% since the first of the year.
Wish I could help on the historic medians, but it is becoming impossible to search anything about Reno/Washoe RE without being bombarded with hits back to this blog. Damn you TED!
Perry
Somebody should have read Diane’s article. This should qualify as the delusion of the month. 1335 Hilltop Road shows as price reduced. Complete 2350sq’ time capsule listed at $415,000 drastic price reduction from $419,900. Watch out for the rush.
Reno Ignoramus
If we are already at the point where 30%, or more, of all sales are bank foreclosures, and that figure is rising, we are rapidly arriving at the point where the banks are going to be setting the comps. It is becoming less and less relevant what non-foreclosure resellers are asking.
The non-foreclosure resellers are very soon to have a choice: they can follow the banks down, or they can take up space on the MLS for a long, long time.
We are about to go over 1000 REOs, and climbing. If Green’s projection are right, we may be looking at closer to 2000 REOs by year end.
It’s becoming clear that this market is a market we have never seen before. Just as we had never seen so many Voodoo loans to so many unqualified people, now we are about to see REOs in numbers unprecedented. The Voodoo loans are transmuting into REO.
Dave
Maybe if the non REO’s follow the bank’s prices, they’ll find there’s a market for a home sold with disclosures, recourse, and on a level playing field. From a buyer’s perspective, I don’t want to deal with a bank’s take it or leave it attitude, no disclosure, as-is buyer-take-all-risk, penalties for closing delays and waivers of rights just for the privilege of having an offer considered. Unless sold WAY below market, the REO sale seems to be a risky deal for the buyer. I looked at one where the realtor’s paperwork (not Chase)extended liability waivers to the realtor as well as the bank, as seller/owner. This was not a foreclosure sale where disclosures are not required.
With 1000 REOs on the market and all requiring waivers to disclosures as a condition of an offer, the requirement for disclosures is diluted and applies only to the private seller.
Sully
SkrapGuy, if you go to zillow and pick a house, any house and go to the 10 year chart, check Washoe or Reno the trend line shows the average (median) 264K was last hit around late 2004.