A 31% increase in the month-over-month number of homes sold in April stands out as the big news this month. I, as well as many agents in my office, can attest to the increase in client activity lately. These numbers seem to support our perception.
The median sold price also increased for April, with a noteworthy gain 3.5% over March. This market has not seen a month-over-month increase of that magnitude for quite some time.
All good news, however, on the flip side the inventory also increased. With more than 300 homes added to the MLS in April (a 7.2% increase over March), we now have 4,456 homes for sale.
Here are the latest numbers:
| Month and Year | # Homes For Sale | Median Asking $ | # Homes Sold | Median Sold $ |
|---|---|---|---|---|
|
Apr 2008 |
4,456 | $299,000 | 316 | $269,000 |
|
Mar 2008 |
4,155 | $299,900 | 241 | $260,000 |
| Feb 2008 | 4,024 | $299,925 | 221 | $271,632 |
|
Jan 2008 |
4,097 | $307,000 | 191 | $268,000 |
|
Dec 2007 |
4,144 | $315,000 | 249 | $275,000 |
|
Nov 2007 |
4,511 | $318,900 | 231 | $286,000 |
| Oct 2007 | 4,878 | $320,000 | 267 | $287,000 |
| Sept 2007 | 5,023 | $325,000 | 270 | $285,000 |
| Aug 2007 | 5,474 | $329,484 | 348 | $295,000 |
| July 2007 | 5,422 | $335,000 | 351 | $295,995 |
| June 2007 | 5,382 | $339,000 | 378 | $300,000 |
| May 2007 | 5,189 | $339,995 | 427 | $296,000 |
| April 2007 | 4,942 | $344,450 | 393 | $295,000 |
| Mar 2007 | 4,685 | $342,500 | 391 | $297,000 |
| Feb 2007 | 4,427 | $340,000 | 334 | $285,000 |
| Jan 2007 | 4,708 | $343,700 | 336 | $279,950 |
| Dec 2006 | 4,566 | $345,000 | 347 | $293,995 |
| Nov 2006 | 5,199 | $349,200 | 330 | $300,000 |
| Oct 2006 | 5,654 | $349,900 | 422 | $300,000 |
| Sept 2006 | 5,967 | $354,000 | 396 | $301,000 |
| Aug 2006 | 6,256 | $356,200 | 393 | $310,000 |
| July 2006 | 6,125 | $360,000 | 416 | $324,750 |
| June 2006 | 5,949 | $364,801 | 473 | $329,000 |
| May 2006 | 5,407 | $369,900 | 432 | $318,750 |
| April 2006 | 4,626 | $369,000 | 415 | $317,000 |
| Mar 2006 | 4,295 | $369,900 | 437 | $329,000 |
| Feb 2006 | 3,899 | $374,900 | 326 | $315,250 |
| 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 and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – May 2008.
One of our readers, CBam, graphed the units sold and median price numbers above. See his trend lines by clicking on the charts below. Thanks, CBam.
I really appreciate the Blogger participation I’m seeing here. Another reader just sent a spreadsheet graphing the number of homes sold as a percent of those available for sale (see below). On this chart he also graphed the monthly change. His analysis: “It looks like if May can exceed 8.3% of homes sold, there could be relief in sight. If May [‘s absorption rate] is 5% or lower, probably 6 out of next 8 months will see declining medians.”
Reno Ignoramus
Guy, thanks for the post. 158 houses sold for less than $269K, and 158 sold for more than $269K.
Is there any way to find out how many of the 158 houses that sold for less than $269K sold between $200K and $269K, and how many sold for less than $200K?
And, of the 158 houses that sold for more than $269K, how many sold under $300K, under $400K, under $500K, etc.?
If it’s too much work to gather that data, I understand. I am curious where the bulk of the sales activity below and above the median is occuring. I have some realtor friends who say that the upper end is dying on the vine, but some data would be helpful to know for sure.
DERRICK
higher sales, with a higher median price ? .. looks like you folks have a few more months to get rid of me!.. but we both know UNDER 240k isn’t happening..
guy/diane../// do the last few months lead you to believe we are at the bottom or approaching one quickly?
DERRICK
speaking of bottom.. how about the U.S dollar ..
DERRICK
“This market has not seen a month-over-month increase of that magnitude for quite some time”
quite right guy, infact the last time we saw this was:
Feb 2007 4,427 $340,000 334 $285,000
something to note.. sales are almost Identical as well for this time period
Guy Johnson
R.I.,
< $200,000: 19.3% $200K-$269K: 31.8% $269K-$300K: 13.1% > $300,000: 35.8%
Many ways to interpret these numbers, but the quick story is that two-thirds of sales are occurring at $300,000 and below.
DERRICK
so 30% ++ of ALL sales are 300k and OVER
Reno Ignoramus
Thanks Guy for the info. That really helps clarify the below median segment. Interesting that 1 in 5 houses selling are now below $200K and 2 out of 3 are below $300K.
I remain curious about the upper end. I’m hearing from friends selling real estate that only a very small percentage of that one-third of the market over $300K is selling for over $500K. Perhaps Diane can give us some additonal info about the number of sales over $500K?
You and Diane provide a great service here. Thanks again.
KB
Correct me if I am wrong, but we had an increase in inventory but with the higher sales numbers leads to larger absorption ratio and fewer months of inventory. By my math, we are at 14 months of inventory Vs greater than 17 for the last three months.
DERRICK
Its pretty obvious that the 500k and OVER market will make up a VERY small part of homes being sold in reno. hence the median price ( 269k). However the 300-500k market seems to be selling rather nicely, taking up almost 33% of ALL sales.
smarten
Derrick –
Don’t be patting yourself on the back so quickly. Even you have stated we won’t know we’ve hit bottom until several months after the fact.
The number of unit sales [and listings] fluctuate by season. Take a look at the last three years and you’ll see an historical up-tick in both at about this time of year. Remember, April’s median is about the same as it was in January. This took place in 2006 and 2007 yet look what happened during the summer months.
DERRICK
smarten you are the one who predicted the median would FALL in April.. Not me.. take your own advise!
Allen Murray
Although the #’s are encouraging, I too say its too soon to declare we’ve hit bottom. I do know that the realtors and mortgage people that I am talking to say they are busier now than they have been in a long time. I’ve also looked at 2 properties in the last week that I would consider great buys one of which I am considering buying.
So do all the pessimists still think we will see a median sales price in the low $200K? Smarten, how close are 15 year rates to your 4.5 target? Bantering Bear, please enlighten me.
Sully
Just a thought, but has anyone considered the 1800 houses in the NOD pipeline that haven’t even hit the MLS yet? And that doesn’t include the April numbers.
smarten
Allen asks, “how close are 15 year rates to [my] 4.5[%] target?” Good question Allen.
The answer: not too close.
In June of 2003 the federal cost of funds rate hit its historical low at 1%. Today we’re pretty close at 2%.
In June of 2003 the 30 year conforming loan fixed rate hit about 5.2%. The 15 year rate hit about 4.6% [although for one week or so I remember it hitting 4.5%].
In March of this year the federal cost of funds rate stood at 2.25%; the 30 year conforming loan fixed rate stood at 5.85%; and, the 15 year rate stood at 5.27%.
Notwithstanding the fact the current federal cost of funds rate has dropped 1/4%, the 30 year conforming loan fixed rate has [surprisingly] increased by about .2% to 6.05%; and, the 15 year rate has increased by over .3% to 5.6%.
Go figure.
I think [but what do I know?] rates are out of whack compared to the current federal cost of funds rate [even though the two don’t technically move in tandemn]. That said, within the next month or so I would hope 30 year conforming loan fixed rates settled back down to about 5.6%, and 15 year rates reached about 5.1%.
Realistically, 15 year rates can’t get back into the 4% range absent future cuts in the federal cost of funds rate. Will that happen in the coming months? If I knew that my middle name would be Greenspan.
But absent another financial institution calamity, I don’t think anything’s going to happen with the federal cost of funds rate for the next several months.
Marla
I don’t see that there is much to get excited about here. Only 7% of all houses sold. 93% did not sell.
About 60 houses sold for less than $200K.
About 100 houses sold between $200K and $269K.
About 40 houses sold between $269K and $300K.
About 100 houses sold for more than $300K, but we don’t know how much more than $300K. My guess is that most of these 100 houses sold for less than $500K.
I think some people here are a bit too obssesed with the median number. I can tell you that an 1800 sq. ft. house on my street that sold for $520K in July, 2005 just sold for $372,500. That is a 29% drop in value. It also is a decline from $291 a sq. ft. to $207 a sq. ft. This particular house obviously falls to the upside of the median, but on a percentage basis has dropped in value much more than the median has dropped since its all time high.
And there is another house of the same model on the market the next street over that is listed for
$395K that can’t get a look.
Allen Murray
Smarten, I too have noticed that the gap between 15 and 30 year seems to have tightened over the past several years. The fact of the matter is that we are still at historical lows and it can’t get much better. 3/4 of a % isn’t that significant if you can remember double digit interest rates. As you have stated, mortgage rates aren’t directly tied to the federal funds rate, but are more reflective of the bond market. So what do you say Smarten, is now the time to buy? As Sully mentioned, there are a lot of NOD’s in the pipeline, but I think prices have come down the point where things are going to start moving in the lower and middle markets. How will this effect the high end. We’ll have to wait and see……
Allen Murray
Marla, you do realize that your argument is identical to people’s arguments during the peak. Everyone could point to an example of where their neighbor purchased a house for $372K and sold it a year later for $520k. At some point what goes up must come down and visa versa. I think we are getting very near the point where it wont go down much more, I’m starting to see a lot of value out there, and values will not drop to zero. Be careful of the “lemming” mentality, it can cost you just like it did many on the upswing.
HermPhD
Mortgage rates are most closely tied to the 10 year treasury. The treasury yield is most sensitive to inflation. When the bond market senses inflation is about to eat into the value of bonds, the yield rises to offset the loss in principal. (The price and yield move in opposite directions). So watch the inflation numbers. A rise in inflation will bring about a coresponding rise in the treasury yield, which will bring about a correponding rise in mortgage rates. At least this is the way it has worked for the last 100 years. To see mortgage rates at 4.5%, the bond market would have to regard inflation as under control. It’s really not surprising that mortgage rates have increased despite the drop in the fed funds rate. The bond market is getting skittish about inflation.
Marla
Thanks for the lecture about my mentality Allen. I know it must be getting to you to be sitting on your overpriced “million dollar” house for more than a year. I’m sure all these stories of sellers having to take big price reductions to sell their house are upsetting to you. But I’m sure your house is special Allen. I did not say that values would drop to zero. Did I say that Allen??
Allen Murray
Wow Marla, I didn’t think I was lecturing, but stating my opinion, isn’t that what a blog is about? Now your response to me was somewhat of a lecture, are you sure you aren’t Bantering Bear in disguise?
smarten
Allen, I agree with you that “the fact of the matter is that we are still at historical lows and it can’t get much better. 3/4 of a % isn’t that significant if you can remember double digit interest rates;” and I do.
Would I hold off making a purchase simply because mortgage rates may not have hit bottom? Of course not. If I had a mortgage and wanted to refinance would I hold off because I believe mortgage rates may not have hit bottom? Yes [because I think we’re going to be in a 1/2% range even if the feds don’t cut the cost of funds rate]!
If you’re a buyer who is going to have to rely upon a purchase money mortgage, my recommendation would be to start working with a lender [or mortgage broker] to get yourself pre-qualified. That way you’ll be able to move when that perfect property comes along. In fact [believe it or not] that’s exactly what I am doing. A loan broker I’m working with tells me he’ll be able to give me a loan commitment good for 90 days and if I haven’t found something to my liking within that period of time, he asserts it will be a simple matter to secure renewal for an additional 90 days. The key is documenting your income and assets. That way all you need do when you’re ready to move on a specific property is to update that documentation.
Phil
Year over year the number of sales are still down. I do not see what there is to get excited about. I see the increase is just a seasonal fluctuation.
Until the California retirees start moving again, I don’t expect any significant changes to be occuring in the above 300K sector. People are putting off retirement and/or semi-retirement as investements are not doing well. I have lost a bit of money myself and my retirement plans are moving out as well.
One interesting thing I saw today is a sign guaranteeing to sell your house. Not sure what it means, but it has been a while since I saw one of those.
Patience people. The blood letting isn’t finished. And yes I did buy a home in this market, you have to live somewhere. Damn gald I didn’t buy in Sommerset (I hated all the damn roundabouts). I can only guess what the earthqueakes did to that market. But that too will be short term.
I wonder when the flip this house shows will show current trends and discuss the downtrend in profits seen or even losses.
DERRICK
diane/guy, why do you both have different numbers for the inventory? If dian counts manufactured home and guy does not shouldn’t the numbers be the other way around??
Guy Johnson
One of our readers sent a spreadsheet with the units sold graphed. I’ve added it to the post. See above.
Derrick, regarding the number of solds differing for Diane and me, unless I am looking at something other than what you’re seeing, I see Diane mentions 336 solds in her “Preliminary April Numbers” post. As you point out Diane includes manufactured housing.
I posted 316 solds for the month (not including manufactured housing). A difference of 20 units. This sounds good to me.
KB, you are correct regarding the absorption rate. Thank you for pointing that out.
smarten
Love the graph Guy; thanks.
Now if we could get one for median sales prices in addition to unit sales, that would be even better.
You know, it’s hard for me as a lay person to envision any source in Reno/Sparks being more up to date on what the residential market is doing than you, Diane and the other posters on this site.
The comparision with ChaseNation is night and day – someone over there needs to take notes. Good job Guy!
Guy Johnson
Thank you all for the kind words. We are glad so many find this site useful.
However, I’ve said it before and I’ll say it again, it is much of the commentary provided by our readers that makes this blog as useful as it is. Thank you all for your contributions.
Guy Johnson
Just added a median sold price chart (see above). Thanks, CBam.
GreenNV
If sales HADN’T been up significantly in April, then there would have been a story. I’m a little surprised that the median bounced back to it’s Jan/Feb level. I expect it to continue down (I called $235,000). Here’s why:
– April NOD’s were a record high of 513. NOS’s were a record high of 313. TD’s were 137, down from 138 in Feb and the 208 freak number in January. You can expect a lot more REO’s to hit the market.
– About 80% of April’s TD’s will hit the market at below median prices. 55% of all sales in March were REO’s, and April’s numbers will probably be about the same. So there is an increasing pool of “motivated” sellers coming to market with below median priced properties – the stuff that is selling.
– I think the below median half of the market is just about at the bottom. Prices have been slashed, and properties are moving. I haven’t seen this happening in the same magnitude on the above median properties, particularly the over $400,000 homes. Sooner or later you will once the Option ARMS max out or reset, but for now it is a standoff. But this will only serve to push the median lower.
Guy Johnson
I really appreciate the Blogger participation I’m seeing here. Another reader sent a spreadsheet graphing the number of homes sold as a percent of those available for sale. I’ve added this chart on the post above. On this chart he also graphed the monthly change. His analysis: “It looks like if May can exceed 8.3% of homes sold, there could be relief in sight. If May [‘s absorption rate] is 5% or lower, probably 6 out of next 8 months will see declining medians.”
GrandWazoo
GreenNV – where do you get the TD and NOD data? I’ve been all over the Washoe county web site and for the life of me I can’t find this info.
BanteringBear
I see no real reason for the incessant blather of a certain few posters here. There is absolutely nothing to celebrate in the numbers. Median price, as well as houses sold have continued to deteriorate YOY, and as Marla has accurately pointed out, price per square foot is the real barometer.
As we meander toward a bottom, there will be brief periods of apparent improvement, as it’s never a straight shot down. Let’s answer a few questions. Do wages now support the median? No. Is it cheaper to buy than rent? No. Is the economy strong? No. Are wages strong? No. Are inventories improving? No. Are foreclosures slowing? No. Oops, looks like more pain ahead.
Anybody want to buy a $400k McMansion on Dant for $1.2 million? Didn’t think so. Commence the price slaughter to shake out all of these weak hands.
GreenNV
Waz, there is a summary of how I search at http://rediggerdog.wordpress.com/ I need to do an update on the Sinners one of these days!
The site you want is the Recorder. You have to sign up for it, it is free and safe. For those afraid of Big Brother, I have set up a temporary sign in – User Name: rrb, Password: 877yodiane. Select the type of filing you are searching for (NOD, NOS, TD) from the pull down menu. Select the start and end dates of your search window, then enter.
And/or, you can search for a particular individual’s recorded records. In Grantor, enter the name last name first (try Rios Edelmira, Kavishi Nick, or Krch Kyle for fun). You’ll see why DERRICK keeps his transactions all cash when you see all the information available!
GrandWazoo
Thank you GreenNV!
bondstevenbond
No matter how bad things are, they can always get worse.
DERRICK
I was talking about the inventory Guy, not the number of sale.. sorry for the confusion.
Diane has the inventory lower by about 200 than you, yet she includes manufactured. what gives?
DERRICK
they way I see it:
Sales have increased every month since the beginning of the year, and appear to have picked up more and more steam along the way. Add to the fact that as of last month the median went UP not down on yet again MORE sales.
I expect close to the same for may. 12 months from now it will be Clear that march-april was the “bottom”
SmartMoney
The talk about a bottom sounds a lot like in 1991, four years before the bottom http://www.southoctracker.com/2008/05/south-oc-home-stats-may-2.html
“The county’s new-home market caught fire…as sales shot up while inventory went down.
If both trends continue, real estate analysts said the county’s housing slump could be over by the end of this year.
“We’re seeing indicators that show the economy is in a similar situation to what it was (in July of) last year. The big difference is that buyers now are confident. They are perceiving that this is the end of the down cycle, not the beginning,” said John Shumway, president of Market Profiles, a real estate consulting company in Costa Mesa.
Or perhaps not…This story was printed in the OC Register in March 1991 – about four years before the actual end of that down cycle.
smarten
“It looks like if May can exceed 8.3% of homes sold, there could be relief in sight. If May [‘s absorption rate] is 5% or lower, probably 6 out of next 8 months will see declining medians.”
Don’t know about you, but it sounds an awful lot like Ground Hog Day to me!
downtownjunkie
I agree with Smarten and the rest who estimate next January as the bottom. Very typical for sales to rise this time of year. Since everyone is playing god as far as what the bottom median will be. I am going to call $247,750 AND .10 cents -this is fun…
I think that there are some deals to be had in the under 300k segment and rates are low-perfect for first timers with good credit.
Diane is very correct as far as buyer strategy: Make an offer. Most sellers and their agents don’t really know what to do as far as pricing because the market is changing so rapidly. You will find that asking price has no reflection on motivation, especially if you have the data to back it up.
I’ll join the vultures around the end of this year and pick up some FEASIBLE income property.
Love the Blog Diane/Guy
John Newell
GreenNV,
I have been watching the TD numbers pretty closely because these numbers may impact my work (we are seeing more renters with legal issues related to foreclosure of the leased property). The number of TDs I have for April is 187, not 137. The search parameters I use are simply “Trustees Deed” for document type and April1st through April 30th as the date range.
Am I missing something?
jose rock
Reno is overpriced. Just look at Sacramento prices falling. Why is Reno imune or specail.
Reno’s day is coming. Texas is a far better place to invest. What is Reno’s industry? As far as I can see most people make 6-7 dollars an hour there. Almost bought a condo in Reno in 2005 it was offered at $119,000 I saw the same condo for sale for $79,000 2 weeks ago, glad I went to Texas where I have made money, not lost money in Reno!
The Realtors here have to be upbeat and sometimes lie, their income is based on sales, of course they will lie!!!!!
Prices in Reno have to fall another 25%-40% to be competitive with the rest of the U.S.
Remember, in most cases now you have to put down 15%-20% as a down payment. Who has $30,000 to $40,000 sitting in a bank account now a days?
I doubt casino workers and the McDonald’s workeres don’t have that in Reno!! I won’t even mention inflation, sliding dollar and unemployment. Come on people, do that math!!
KB
Jose Rock,
Good luck in Texas, don’t let the door hit you on the way out.
I hope you have a emergency bunker in Texas so the sky won’t hit you when it falls.
GreenNV
Mea Culpa, John. Sometimes I can’t read my own handwriting. The correct TD figure for April is 187, not 137.
With 5 of 21 business days completed for May, TD 38, NOS 61, NOD 139. As you know, these filings tend to show up in big chunks, so it’s hard to be the “Oracle of Verdi” this early in the month. But so far TD and NOS numbers look like they are trending down a bit, and NOD numbers up. I think you have to be in default to get the bank’s attention for a work-out that prevents worse recordings.
Diane Cohn
Derrick, Guy and I were discussing our varied results on the number of homes for sale today. I pull my numbers direct from Paragon, our MLS software, using a statisical reporting feature and MLS defined boundaries (Reno-Sparks Area 100). Guy pulls his numbers from Broker Metrics, a third-party statistical software package that feeds from Paragon, yet defines areas by city boundaries, not MLS Areas. This may explain the difference, but honestly it’s just a theory. The important thing is that we each do the same thing consistently every month. So at least if we disagree, we’re consistent about it.
downtownjunkie
Jose Rock,
If you are really looking at condos in the 100K range you could sell your 20″ “rimz” and save a couple $6-7/hour paychecks. Texas is far too North for a smart investor like yourself.
BanteringBear
The racial stereotypes bordering on bigotry have got to go. You’re not even a little bit funny downtownjunkie.
downtownjunkie
Your right BB. I forgot that Realtor/casino stereotypes are allowed on renorealtyblog.com
I meant that Mr. Rock might have better luck investing outside of the US as we are experiencing an economic downturn.
It will not happen again.
MikeZ
So do all the pessimists still think we will see a median sales price in the low $200K?M
Yes, of course. $210K/$220K.
That’s the top end of what the incomes support right now.
DERRICK
so are you saying we will see a median price of 210k MikeZ? that is rather amusing, considering it will NEVER happen lol.
DERRICK
downtown junkie, if you think you are special because you made a few pennies buying and selling a house think again.. you are a dime a dozen. It didn’t take a harvard graduate to flip a house and make money during and even at the tail end of the boom..
as far as prices falling another 40% in reno.. keep dreaming.