Wow! The median sold price took a huge drop for the month of May — 5.2% lower than April’s median. Granted, all sales for May might not be entered into the MLS yet, but even so I don’t see the median fluctuating that much. Note also that the median For Sale price has remained unchanged since February of this year, while the Sold median price has dropped more than 6% during the same period. Another way to think about this: in February houses were selling at ~90% of list price; in May, houses were selling for ~85% of list price.
Inventory also increased to 4,700 houses for sale in Reno Sparks — a 4.5% increase over April’s inventory. At the moment, our MLS is showing 317 resales for May; however I expect that we’ll see a few more May sales entered into the MLS in the next few days.
| Month and Year | # Houses For Sale | Median Asking $ | # Houses Sold | Median Sold $ |
|---|---|---|---|---|
|
May 2008 |
4,706 | $299,000 | 336 | $255,000 |
| Apr 2008 | 4,498 | $298,000 | 335 | $269,000 |
|
Mar 2008 |
4,185 | $299,000 | 243 | $260,000 |
| Feb 2008 | 4,044 | $299,500 | 221 | $271,632 |
|
Jan 2008 |
4,111 | $302,798 | 191 | $268,000 |
|
Dec 2007 |
4,153 | $310,000 | 249 | $275,000 |
|
Nov 2007 |
4,519 | $315,000 | 231 | $286,000 |
| Oct 2007 | 4,886 | $319,950 | 267 | $287,000 |
| Sept 2007 | 5,030 | $324,900 | 270 | $285,000 |
| Aug 2007 | 5,480 |
$329,000 |
348 | $295,000 |
| July 2007 | 5,426 | $334,900 | 351 | $295,995 |
| June 2007 | 5,385 | $339,000 | 378 | $300,000 |
| May 2007 | 5,191 | $339,900 | 427 | $296,000 |
| April 2007 | 4,943 | $343,000 | 393 | $295,000 |
| Mar 2007 | 4,686 | $342,000 | 391 | $297,000 |
| Feb 2007 | 4,428 | $340,000 | 334 | $285,000 |
| Jan 2007 | 4,709 | $342,995 | 336 | $279,950 |
| Dec 2006 | 4,567 | $345,000 | 347 | $293,995 |
| Nov 2006 | 5,200 | $349,000 | 330 | $300,000 |
| Oct 2006 | 5,655 | $349,900 | 422 | $300,000 |
| Sept 2006 | 5,967 | $352,995 | 396 | $301,000 |
| Aug 2006 | 6,256 | $355,700 | 393 | $310,000 |
| July 2006 | 6,125 | $360,000 | 416 | $324,750 |
| June 2006 | 5,949 | $364,500 | 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 – June 2008.
[06/05/2008] A couple readers updated the charts and sent them to me (Thanks, Josh and Brian). Brian combined all of last month’s reader-submitted charts into one multi-tabbed spreadsheet. You may find it here.
jkat
Derrick,
Could you please spin these numbers? A more than 5% in one month, this can not be!!!!!
BanteringBear
Inventories building nicely, prices dropping precipitously. What’s the magic median where the masses start buying into my sub $200k prediction? Hyper-inflation is the only way out, but those pesky things called jobs and wages just keep getting in the way. A hard rain’s gonna fall…
Phil
The fall in the number sold is a bit surprising at least to me. The demand being so small is an indicator we are far from being at the bottom.
Oh well…..
smarten
I don’t see what the surprise is. April was an anomaly which obscured the downward trend in median pricing and upwards trend in listings. Many of us predicted this would happen for a number of months following February of this year culminating in the true market bottom. So I see we’re right on track.
You notice that the minute one of our stucco oracle’s predictions come to pass [even though it takes more than one month to make a bottom], he’s all over it like bees over honey. But when the longer trend takes shape down the road, our oracle is no where to be seen. Another one-month 4% drop in the median pricing and we’re at Derrick’s ultimate low point [you can take it to the bank] and it’s only June. Still chomping at the bit for June’s numbers Derrick?
smarten
A question for Guy. Are you going to be posting your graphs for this month’s worth of data? There was an eery trend suggested by one of last month’s graphs that I didn’t comment upon. I’d really like to view the graphs with your current data to see if this trend may be something more [which I think it is]. Thanks.
Guy Johnson
smarten, those graphs were provided by a couple of our readers (CBam, et al.) If/when they send them to me I will be happy to attach to this post.
DERRICK
not really smarten,, I’m busy watching oil drop like a rock..
$$$$
Reno Ignoramus
Quite right Smarten, there is no surprise here. Some of us have been projecting this for months, a few of us for as long as this blog has been in existence.
Recall that in April 70% of all houses that sold sold for less than $300K. Almost 20% sold for less than $200K. So why is a $255K median a surprise to anybody?
I look forward to Diane’s monthly post on sales data. I think it quite certain that we will continue to see the great bulk of sales activity in the under $300K range, with the under $200K range gaining in market share.
Just take a stroll through the MLS and observe that the upper end of the market is absolutely dying on the vine. We see price segments above $500K with no more than 3-4% of the listings with an offer. Years and years of inventory there.
We are essentially at the point now where the only houses that are selling are REO properties in the low end.
Too bad Angie has left the Voodoo money business and is running cocktails in LV. Seems that without the Voodoo juice what we have here in Reno is a market that is inexorably returning to what the $50K median household income can afford. BB puts that at under $200K. I know some here suggest that will never happen. But consider this: unlike several other readers here, BB has not been wrong yet.
Maybe Jeff can come to the rescue. What ever happened to Jeff? You all remember Jeff? He was the guy telling us all how his nothing down, I/O, stated income, neg am loans were the best thing that ever happened to the Reno housing market. How they helped so many achieve the American Dream. Has anybody heard from Jeff??
MILLER
Guy,
Just updated the graphs and data on the spreadsheets from last month and emailed them to you.
Enjoy!
KingBud
Agree with Smarten and Ignoramus.
Investors in Reno should look at sub-200K market. Rental rates are aren’t bad, positive CF opportunities are becoming available in this segment for those with cash to put 20% down.
I’m still somewhat surprised by the slow rate at which sellers are reducing asking prices on their properties, especially given the accumulating REO’s. Median income is around 50K, so by traditional lending standards median home price should be about 200K. If we’re at 255K now, then we’ve got another 20% of downside to go at least. Bank REO’s definitely are putting a ceiling on selling prices in the market now and will continue to do so for the foreseeable future.
If this is the pace that asking prices will come down in Reno, the correction will be long and it will be a matter of years rather than months before a bottom is reached. I think some people out there are still holding out for some type of government bail-out or for bank work-outs, but perhaps once the election year is over and it’s clear that no government bail-out is forthcoming, then sellers will become more aggressive in lowering their asking prices to better compete with the REO’s.
MikeZ
Both volume and price down.
Is that what a bottom looks like? I don’t think so.
EdBear
As a person possibly looking to purchase a second home in the Reno/Sparks area, I find this blog very interesting and informative. Thanks to all of you for keeping it up.
I emailed Diane the other day asking for advice, but I’d sure be glad to hear from any of you.
My wife and I are both retired and living in Walnut Creek, CA. We’ve flirted with the Reno/Sparks area a couple of times. In 2004, we had a deposit on a home overlooking Red Hawk GC with a sales price in the $340K range. After thinking it over, we asked to be released from the deal because we felt the property was just too far out of town, and that we already had a home – did we really want two to take care of and maintain?
Last summer at HAN (we come up with a car), we put a deposit on a 950 sf one bedroom plus at The District. The sale price was going to be around $290K. It met our needs for the following reasons:
It was new and pretty upscale
We loved the thought of being downtown with a very easy walk
The outdoor ammenities were good (pool, BBQ, social room, etc.)
The condo, being on the main floor had a fenced patio where our dogs could hang out – that’s a big deal for us
And, it was a low maintenance condo where we could just shut the door, and leave it
So, now with that deal falling through, what can we do? The hotel/condo conversions in Reno won’t work because the dogs can’t use the elevator by themselves to go out. I thought the Village at Idlewild might be a possibility until I learned of the developer’s intent to rent half of it as apartments. (What a screwing those poor buyers have taken; there ought to be a law.)
Does anyone have some thoughts about what we might do to purchase a place that would meet the same goals as the district?
Alternatively, I’d like to build one more house before I get too old, so we’d think of that too. It would be a small place around 1,500 sf, great kitchen (we are both cooks), large great room, room to seat 10, for dinner in a pinch, two bedrooms and two baths. Of course a view would be nice to as would an all-in price around $450K. Are we smooking dope with this idea?
Anyway, thanks for the blog and any advice you blogggers might have for us. If you want to reach me by email, contact me at edbear55@aol.com.
playtonium
Hi EdBear I would try the Old Southwest neighborhood. It’s close enough to downtown Reno you can walk, there are some great properties, the neighborhood has really cleaned up, and you can easily score a house for under $450K there. It’s a great neighborhood because the landscaping is fully mature, it’s within the McCarren Loop, several large parks nearby (Idlewild, Virginia Lake). Most homes in that area have full front/backyards.
If you want maintenance free living, there are some low-rise condo/townhome units in this same area, (NOT Village at Idlewild) but for the life of me I can’t remember the name of them. I will find out and email you. Also, have you looked at Virginia Lake Crossing? It’s across from Virginia Lake (which is undergoing major revitalization) and about 2 miles from downtown.
Grand Wazoo
What development was “The District?”
EdBear
The District was the condo development at Victorian Square across from the Nuggett in Sparks. Couldn’t sell enough of them and financing finally fell through. Too bad, it looked like a good one.
EdBear
Thanks Pluto,
Anyone else care to chip in?
Guy Johnson
Thanks Brian and Josh for sending me updated charts. I have added them to the post.
smarten
Thanks Guy –
Now for my observation. Take a look at the median price chart and compare the graph for 2006 to the one for 2008. Both look pretty similar to me but for the fact 2008’s is running about one month behind 2006’s.
Just for fun [and it was ONLY for fun], I took the March, 2006 high point [$329,000] and compared it to the December, 2006 low point [$293,995]. I observed a 10.64% decline. I then went to the April, 2008 high point [$269,000] and calculated a 10.64% [$28,622] decline through the end of the year. This puts me at $240,378 [the absolute low point our stucco oracle from Spanish Springs predicted (which is why I said my exercise was ONLY for fun)].
Additionally, the drop in median sales price between December of 2006 and January of 2007 [an historical low point of the year in sales] was a whopping 4.77%! So If I drop December, 2008’s hypothetical median sales price of $240,378 by another 4.77%, come January, 2009 [remember my January 11, 2009 date?], we could be looking at a $228,912 median sales price.
Although it will be interesting to see how 2008’s graph performs for the rest of the year compared to 2006’s, it seems the median sales price IS continuing to head lower [which means we haven’t hit bottom]. And given February, 2007’s median sales price increased from January, 2007’s, might we be looking at a January, 2009 median sales price [$229,000] bottom?
Just some food for thought.
Tom
Playtonium, a question about “old Southwest:”
I have talked with two people there trying to sell, both are long-time residents who are not leaving town, just want to move into “south Reno area.”
Why do you suppose this sentiment exists? As a potential transplant I would like to know the special attractiveness of the “suburban south;” I thought my preference for it was just my own peculiar likes and dislikes. But if local people are selling to just move southwest four or five miles, I would like to know more. Comments, locals? Thanks.
Future Buyer
I used to live in Caughlin Ranch, but when we moved back to Reno we wanted a change. We are renting a house in Arrowcreek and love this side of town. There is so much moving here i.e. The Summit and it’s really close to the Lake and Mt. Rose. The Wells area has gotten so bad and Parklane is a ghost town. Downtown is trying to clean up, but still somewhat depressing. Those are my reasons for liking South Suburban, but I’m sure everyone has different tastes. I still can’t get over how the high-end market prices have barely budged and are still asking 2006 prices. We will continue to rent as long as is necessary.
MILLER
TOM,
I grew up in the area and went to school at UNR, moved away for 10+ years and have now come back (greener grass is not on the other side!) From a true native’s perspective – Incline for 7 years / Carson City for 10 years / Reno 7 years (NW/UNR Area/Now SW Sub), I think I can add to some of FUTURE BUYER’s input…
When we moved back at the end of last year, we chose the Southwest Suburban area off of Thomas Creek. We’re renting now, but when we buy, it will be in this neighborhood. The “Old Southwest” is still a very nice area around Virginia Lake etc.., however, many of the homes need quite a bit of “renovating”. Also, FB is right in that Parklane is a huge eyesore.
As for the positives of the Southwest Suburban area (to add to FB’s observations) – 3 of the best elementary schools in NV – Lenz/Brown/Huffaker – the fact that many of the homes have views of both downtown AND the mountains (love waking up and looking out or bedroom window at the slopes on Rose) – and many of the homes are on larger, more spread out lots (we’re on a half acre, but most average about .35) – Lastly, you have a good mix of new up scale homes (arrowcreek), and newer than “old southwest” (80’s – South Hills/Thomas Creek) that have established landscaping (read large tree lined streets).
Not that I’m looking for buying competition in our neighborhood, but we love it down here and when we do buy, it’s going to be very close to where we’re at now. Of course if you like the close quarters, postage stamp, stucco slab boxes, you can always look into Double Diamond/Damonte on the other side of 395 (and you can get in there for cheap right now), but I’m done with that kind of living!
Hope this helps paint a little better picture of the “south side” for you!
playtonium
Future Buyer…Wells Avenue Area gotten so bad? I beg to differ, and I urge you take a look at police reports…you will find there are more house burglaries and and car break ins in some of the south suburban areas you guys are praising (exlcuding the gated ones like Arrow Creek) than in my neighborhood. Graffitti problems in this area area are going down, the Wells Avenue area just got a massive zoning change and Overlay district passed that ensures this neighborhood will retain its historic value for years to come, while maintaining architectural standards of historic homes. It also dictates architectural standards and sign standards for Wells Ave. We’ll be getting signs soon to denote this is a historic bungalow district, and several programs to encourage owner-occupancy in this area. We just got $7500 passed to plant 100 more trees along Wells Avenue, a facade improvement program for Wells Avenue will be going before council soon. There are three or 4 people on every block in the ‘island’ that is restoring their homes, people’s yards are looking better each week. Not to mention the fact that there are very few forclosures within a one mile readius of me (they get higher as you get more suburban southeast). We have full mature landscaping and trees, unlike living on a half-burnt desert hill that is Arrowcreek (and yes I have been out there). A group of 40 or 50 residents care enough about this neighborhood enough to raise its bar to the level of other bungalow districts like in Pasadena or Chicago, and it’s actually happening. So bite your tongue when you say my neighborhood has gotten worse. You probably havent visited it in years.
MILLER
Play..
I totally agree with you. The Wells area is still very nice, and I think you hit it on the head relating it to the bungalow districts that the area is trying to reflect. But, the two areas (Old Southwest/Southwest Sub) differ greatly in home age, size of lot, and school districts. And because of this, it’s not that one area is “better” than the other, they’re both just going to attract a different kind of buyer. It all depends on what you’re looking for…
If you don’t have kids and want a closer knit group of home owners with ease of access to downtown, then the Old Southwest is for you, but if you’ve got an expanding family, need some more room for the kids to run in the yard, and want some separation from your neighbor, then the South WEST Suburban area is probably more up your ally.
Personal opinion, but I wouldn’t wish the South EAST on anyone right now… You’re right… Foreclosures a plenty in the Damonte/Double D area…
playtonium
Yeah to each their own for sure. I just wanted to give the Wells Area props since we as residents have worked so hard to turn it around.
Arrow Creek is definitely a nice area (is this South WEST suburban or is that more Caughlin Ranch?) but isnt it true the supply of inventory of $1 million+ homes is infinite right now? That would include most of Arrow Creek. I just don’t see a lot of Reno-ites being able to afford that area…even me, and I make around $80K. I also really dig the Southwest area right around the Plumas/Manzanita area…still within the McCarren Loop.
Future Buyer
Well I didn’t mean to offend anyone about the Wells area. I grew up here and rememember when Parklane was the only mall to go to and Shopper’s Square area was a lot nicer etc. I wasn’t really talking about the homes. I also love what they have done with the Plumas/Manzanita area– it would be nice if they could do that everywhere! I have three kids who need a lot of room to play and we spent 4 years in Oregon, so although beautiful, I got really tired of all the trees. Again, it is completely up to individual preference and it’s nice that we have a lot of good neighborhoods to choose from.
MILLER
Play…
I’m actually closer to Zolezzi and Thomas Creek/Fieldcreek (just below ArrowCreek – Near Wolf Run golf course). Arrowcreek is nice, but I agree, still overpriced, and that HOA is a killer to add to the monthly payment!!
My area is more in the $500-$600K range and there are a few popping up lately in the sub $500K range (good news for us). I still feel that this area has another good $50-$60K adjustment coming, so we’ll be riding the fence for a bit longer!
Have a great weekend! That Eurofest at the Sands looks like fun, and it’s free entry with good bands (Young Dubliners), so I’m thinking that some good brews and music will go well with the nice weather this weekend!
MILLER
Tom
Thanks to All.
Josh
How much is the HOA fee at Arrowcreek?
MILLER
Josh,
I can’t seem to find the specific listing, but on one of the realtor updates for a house for sale in Arrowcreek, it listed the HOA at right around $260/month.
In mortgage terms, $260/mo equates to another $50-$60K in purchase price on a loan I think.
That’s kind of how I view HOA’s…. How much more house can I afford in a Non-HOA area with that extra monthly payment.
MILLER
Tom
Miller, re your target house shopping area: “Zolezzi and Thomas Creek/Fieldcreek (just below ArrowCreek) – Near Wolf Run golf course–”
Don’t you see ascending airliners from that area on the primary, “Tahoe One” airport departure path, when you look east? We spent some time in that area, but we felt the aircraft noise and viewing planes taking off regularly from RNO was a bit too close. Maybe we were there on a busy airport day or special wind direction (?). When we spent time further to the southwest, up the Mount Rose Highway and out beyond Fawn Way, the take-off noise and air show was much less intrusive, being further removed. Just seemed that way to us, would appreciate locals’ comments. Thank you.
smarten
Guy –
As you may know I quoted your data for May on ChaseNation in response to a blog by Joe Salcedo who was making conclusions about the market not in line with your figures and he states your data isn’t complete. I know you state “granted, all sales for May might not be entered into the MLS yet, but even so I don’t see the median fluctuating that much,” but do we have all the numbers now and are you going to change your data once you have the correct numbers? I’d hate to be making conclusions based upon data that’s incomplete.
Thanks.
Sully
Tom, I was looking at a house on Twin Oaks, which is closer than the above areas. A plane took off, didn’t hear it, but did see it. Part of the view.
Wasn’t that close either, didn’t seem to be a problem. I don’t like the landing patterns either, as I am currently renting in Sparks – right in the pattern. The noise is very annoying.
Tom
Agreed, Sully. In our house-hunting, we have tried to chart the prevailing winds’ approach and departure paths… Arrivals Seem to glide down over the eastern part of the meadows, following 395 but to the east a bit, make a big U Turn over Sparks and around the Nugget..I can almost look out from the plane and waive at people in the Nugget guest rooms, then descends quickly into Reno. Departures Take off to the south-southwest, following pretty much the route of South Virginia Street, but slightly to the east of it, then after crossing over the Mt. Rose/Geiger Grade road intersection area with 395, seems to turn some to south-south east and climb over the Virginia foothills area.
(We don’t want to inadvertently pick a house where we end up listening to airliners every 15 minutes. The people in those tracts on the western side of the meadows, east of the Summit shopping mall, must notice the departing aircraft noise.)
Guy Johnson
Smarten, I would say all the numbers are now reported. And I have now updated my table accordingly. As I suspected a few more sales were reported for the month of May (nineteen additional sales, to be precise). However, as I also stated in last week’s post, I did not see the few unreported sales impacting the median Sold number that I reported last week, namely $255,000. And as you will see from today’s updated table, May’s median sold price remains at $255,000.
Thanks for asking for the latest numbers.
MILLER
Tom,
On the airliner query… Our experience has been similar to Sully’s observation. We’re on a half acre and have two small children who love to be outside. We do see the planes taking off over the horizon. Seems they do go basically straight off over the 395/Damonte corridor. We do hear them, but the noise level where we’re at (Just above Wolf Run) is more than tollerable. It’s that kind of background noise every once in a while that we don’t even notice (and can’t hear at all inside the house) unless the 2 year old points them out to us.
My true test is the wife… She is constantly commenting on “how quiet” it is sitting in our backyard in the evenings, and she’d be the first one to let me know if it was any different!
Plus, not that it’s good for the economy or anything, but almost all of the airlines just announced huge flight reductions into Reno, so that’s just going to reduce the frequency even more.
From your posts, I think I recall that it is just yourself and your wife, and you can afford most of the upper middle class options in the greater Reno area. From a local’s perspective and your situation, I would either recommend the Old Southwest portion – near Virginia lakes if you’re looking for a very well established neighborhood with many things within walking distance. Or, if you’re looking for a larger more private lot and a custom home a little bit out of the main part of town, but still easily freeway accessible (remember, it’s 15 minutes to anywhere in Reno), I would look up the Mt. Rose fwy corridor. Saddlehorn has some nice custom 2 bedrooms that are still well over 2000 sqft and on half acre lots. Newer division, but nice area with a couple nice parks and very nice hiking trails with extremely easy access to Tahoe. And if you want even more seclusion, go up in the Galena forrest area.
Alright… enough banter, and I would imagine that if you need some specific examples, Guy would be more than happy to provide you with the MLS listings. He’s signed me up for the eHSBR site and I’m enjoying the search engines (Especially the polygon map area searches).
Have fun!
MILLER
Tom
Thanks.
We are looking up in that Saddlehorn area and further up M.R. Highway also.
Tom