August Median Prices and Units Sold

Another month, another substantial decrease.  This month both the median sales price AND the number of sales dramatically decreased.  August’s median sales price of $240,000 represents a 2.8% decline from July’s $247,000.  YoY decrease is 18.6%; Yo2Y decrease is 22.6%; and we are now 30.4% off our peak of $345,000 set in July 2005.

Units sold also took a big drop this past month.  332 units sold in August represent a 20% drop from July’s 415 sales.  School has started and the traditional home-buying season is over.  Units sold will continue to fall for the remainder of the year.

Much discussion takes place (on this blog and elsewhere) regarding when the bottom will be reached.  If by “bottom” we’re referring to median sales price, clearly it is still falling.  From other posts on this blog we know that 40% of the listed properties are comprised of short sales and foreclosures (bank-owned).  These distressed properties now account for 50% of our sales.  I see no reason for the proportion of sales driven by distressed properties to fall.  Because these distressed properties are typically priced lower than comparable (non-distressed) resales, downward pricing pressure will continue to impact the market across the board. 

Not until the foreclosures, REOs, and short sales are flushed out of the inventory can we hope for prices to stabilize. 

Month and Year # Houses For Sale Median Asking $ # Houses Sold Median Sold $

August 2008

4,714 $289,000  332 $240,000
July 2008 4,847 $289,900 415 $247,000

June 2008

4,762 $292,428 391 $254,900
May 2008 4,755 $289,000 343 $255,000
Apr 2008 4,529 $289,500 337 $269,000

Mar 2008

4,210 $293,825 245 $260,000
Feb 2008 4,065 $295,000 221 $271,632

Jan 2008

4,128 $299,900 191 $268,000

Dec 2007

4,168 $309,000 249 $275,000

Nov 2007

4,531 $310,500 231 $286,000
Oct 2007 4,894 $319,000 267 $287,000
Sept 2007 5,036 $322,748 270 $285,000
Aug 2007 5,485


348 $295,000
July 2007 5,430 $334,000 351 $295,995
June 2007 5,385 $339,000 378 $300,000
May 2007 5,191 $339,900 427 $296,000
April 2007 4,943 $341,000 393 $295,000
Mar 2007 4,686 $340,000 391 $297,000
Feb 2007 4,427 $340,000 334 $285,000
Jan 2007 4,707 $342,800 336 $279,950
Dec 2006 4,565 $345,000 347 $293,995
Nov 2006 5,198 $349,000 330 $300,000
Oct 2006 5,652 $349,900 422 $300,000
Sept 2006 5,964 $352,000 396 $301,000
Aug 2006 6,252 $355,000 393 $310,000
July 2006 6,123 $360,000 416 $324,750
June 2006 5,949 $364,000 473 $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 – August 2008.


About Guy Johnson

I am a licensed Nevada REALTOR® living and working in Reno, Nevada. Give me a call at 775-722-4011. My team and I will be happy to assist you with your real estate needs.
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44 Responses to August Median Prices and Units Sold

  1. Avatar smarten says:

    Thanks Guy. I agree with your conclusions.

    Well we’re now at the absolute lowest median price drop predicted by our stucco oracle and there’s no end in sight. Can you say timber… Derrick?

    We’re down 30% from July of 2005’s median sales price. For us to be 40% down [which some on this board have used as a benchmark], the median sales price would have to drop another $33K [to $207K]. Personally, I think this is unlikely.

    However if you look at the last three years, the seasonal drop in the median sales prices between August and January has been between 4-1/2%-9%. So IMO a drop in the median sales price to let’s say $220K-$225K seems plausible.

    Like I’ve been saying for some time, especially given what now looks like another 1/2% drop in long term mortgage rates, this fall could be a very good time to be purchasing Reno/Sparks real estate.

  2. Avatar DonC says:

    smarten – the gloom is getting so heavy I think you may be on to something.

    Somewhat OT but sometimes a little levity doesn’t hurt. Here is a story that shows that even high end homes aren’t immune to the real estate bust – Alan Iverson dropping the price of his house to a desperation price of under $4M:,106478

    Can Montage be far behind?

  3. Avatar BanteringBear says:

    Guy posted:

    “Not until the foreclosures, REOs, and short sales are flushed out of the inventory can we hope for prices to stabilize.”

    Well stated, Guy.

    Smarten posted:

    “Like I’ve been saying for some time, especially given what now looks like another 1/2% drop in long term mortgage rates, this fall could be a very good time to be purchasing Reno/Sparks real estate.”

    Read Guy’s post. There is absolutely no good reason to purchase real estate which is rapidly declining in price, unless money is no object and one enjoys wasting it. Another 20% drop in the median wouldn’t be surprising in the least.

    Local median incomes, contrary to what the governments bogus numbers suggest, do NOT support $240k homes. Furthermore, the tsunami of resets and subsequent foreclosures to come will drive down prices far below what local wages afford. And this doesn’t take into account, the economy. This is NOT a good time to buy. Better than 2005, sure. But that’s not saying much at all.

  4. Avatar NAS says:

    Buying under 417K, might be looking at some better mortgage rates. Non-conforming loans? Rates a little better, but you still have to do some serious qualifying. Over 700K? The numbers speak for themselves on how fast these are flying off the shelf.

    As a potential buyer, I understand the above numbers. The really BIG question: Are any of the sellers out there looking at these stats?

  5. Avatar billddrummer says:

    Well put, all. I too, agree that medians have farther to fall. If you go by income, the median family income can afford a $195,000 home at prevailing rates. But that presumes a conforming mortgage with 20% down (which I submit fewer people can come up with these days). What’s more likely, in my view, is that the median will drop to levels we saw in 2003–$175,000 or so.

    And as for higher end homes, forget it. With equity vanishing for the traditional move up buyer (because of distressed sales tanking comps), fewer buyers have cash out of their old home to move up. So the market above $350,000 will soften even further.

    As a result, homebuilders are caught in a vise of high construction and land costs, and lower demand for new product.

    As a codicil, anyone hear anything about the Estrella project in Wingfield East? (One of the available options is called a Sierra Room, a covered outdoor living space with an optional gas fireplace.) It originally was developed by Morrison Homes, and last year Morrison merged with Taylor Wimbey out of the UK. Taylor Wimbey just announced a terrible quarter with writedowns arising from projects in Europe. I toured the models 2 years ago, and was impressed. The website says the homes are still being offered in the mid-$350,000-$473,000 range, and I wondered whether anyone here had any data on how that project was progressing. Also wondering whether the new parent will be pulling back on its US exposure considering how poorly the new home market is faring, and how sluggishly houses in that price range are selling here.

  6. Avatar SmartMoney says:

    Remember, when bubbles collapse, prices fall well below fair value at the last stage of the bubble. That’s were we are headed now.

  7. Avatar billddrummer says:

    To Sully,

    Thanks for the link. I did some research on the Sparks project, and Morrison purchased the land in early 2006, subdivided it into lots in April, and began construction. Out of the 83 lots (including the 3-unit model complex), Taylor Morrison still has 35 in inventory. Most of the sold units appear to be owner-occupied.

    How long will it take to absorb the final 35 units? At the current sales rate for this price point, probably another 3 years.

  8. Avatar DonC says:

    The problem with trying to time the market is that when it’s apparent the bottom has been reached you’ve already on the way up. Also, for a longer term investor it matters not if you buy on the way down or the way up. The problem with real estate is that it’s very lumpy, meaning you can’t sip your way in. It’s a big chunk at a time.

    That said we have some way to go. But smarten is probably right that it’s time to start thinking about the other side of the bottom.

    billddrummer — what formula for the median price are you using? Just curious.

  9. Avatar CommercialLender says:


    I can’t recall what source month your data actually reflects the demand of buyers to have actually occured. While the report is “August”, is that for closings in August, or for deals that only were finally reported in August, but may have closed in other months.

    For instance, in the paper in my area, they report sales for a given week, but they actually closed anywhere from 3-6 weeks prior to showing up in the paper, and of course the deal was penned 30-60 days prior to that.

    What I’m getting at is whether this data significantly or insignificantly lags demand. Could it be that the August data shows those who were buying homes in June for a summer pre-school-year move, began looking and talking to lenders in say April, but based on good feelings about the market they were experiencing in March? If so, then August data reflects ‘demand’ during the spring (the timing on my examples may be stretched, but you get my point).

    So, if this is true, each month going forward will get that much worse than can be explained by only a seasonal downturn, as the consumer sentiment or ‘buyer demand’ has been nothing but abysmal since spring.

    In any event, this is exactly why no one will recognize the ‘bottom’ until its in the rearview mirror.

  10. Interesting but not entirely unexpected to see the volume dropping in August. With the Feds taking over Fannie and Freddie and the marginal relief of the housing bill there should be an infusion of capital into the markets and a reduction in the foreclosure rate. Will it stop the bleeding? No of course not but things will turn around and nobody knows exactly when. I agree with Smarten that an opportunity is likey to be presented this fall and even more so in the winter. Will it be the bottom? I don’t know but I’m not inclined to sit on the sidelines waiting until I “know” we’ve turned the corner. I’d rather tell the story about how I bought the house when nobody else wanted to buy and foreclosures were accounting for over 50% of the sales. Nothing is certain, and yes, I know that houses may continue to get cheaper, but if I know I’m buying at a great value I’m okay with a short term decline. This is real estate. If we’ve learned anything over the last two years it should be:
    1) Longevity is the name of the game: If you can’t buy it and hold it, you shouldn’t own it.
    2) Don’t try and time the market: Real Estate is not for traders. Don’t try and make money next year on the property you buy today.

  11. Avatar BanteringBear says:

    I find it preposterous, the idea that the bottom of this massive bust will be hard to identify. It seems many think that once a price floor is hit, the market will “take off” again. Dream on. Once prices find that level, they’ll scrape along for some time. There is absolutely no hurry whatsoever.

  12. Avatar Sully says:

    I agree, once the bottom is found it may be several years before a noticeable rise in prices occurs.

    We still have too many delusional sellers in this market. That and the REO’s have to clear out to get back to a “normal” market. Normal in Reno is not rapidly rising prices, like Silicon Valley (for example).

  13. Avatar MikeZ says:

    The last two bottoms were easy to identify.

    Prices stabilized and started rising, slowly.

    Some people (especially sellers, lenders and realtors) think the market will have a V-shaped recovery but there’s no evidence supporting that. Credit isn’t getting looser, inventory is positively massive, demand is steady/dropping and there’s no shortage of rental units.

    Buy now? Not a chance, unless the deal of the decade were to pop up.

    9% of *all* mortgages are now delinquent or in foreclosure and ARM recasts jump 100% in ’09 and then 600% in 2010.

    All leading indicators are bad and getting worse.

  14. Avatar KB says:

    Many posters on this blog have an overly pessimistic view of our current market conditions. While I don’t believe we will be setting record highs in the next 7-10 years I do believe that we have found an opportunity to pick up some excellent income properties. I went to see a condo in a decent to slightly negative area that I am going to offer $50k on then spend $5,000-$10,000 on repairs and then rent the sucker for the rest of my life. At this price the property will cash flow and I have a cash on cash return of over twenty-four percent and a total return of twenty-seven percent in year one. The returns just get better from there based on rent increases and debt repayments.

    My belief is that rents trend upwards based on inflation (if by nothing else). Buy income property now that will cashflow and any price appreciation in the next ten years is just gravy.

  15. Avatar bondstevenbond says:

    I think Guy, Sully and Bantering Bear are absolutely right. Remember that after the recession ended in 1991, it took another 3 YEARS for real estate to bottom, followed by 4 MORE YEARS before prices started climbing again in a meaningful way. This housing downturn seems far worse, doesn’t it? There is a long, long list of experts on Wall Street have either explicitly or implicitly called the bottom of this financial crisis which has been driven by the root of all evil, declining home prices. These experts include the fallen CEO’s of Countrywide, Bear Stearns, Merrill Lynch, Alan Greenspan, Bill Gross, and the heads of many foriegn central banks and Sovereign Wealth Funds, Paulson, etc. Morgan Stanley reported today that senior Alt-A mortgage pools are bid at about $60 even while banks still have them on the books at $98. This is why the banks still don’t trust each other and it will be a long, long time they have the ability or desire to trust Joe consumer looking for a million dollar loan. Any one want to give odds that Lehman won’t make it in it’s current form until next Monday? Who will be next after that, Merril Lynch? Sorry if some feel this is off topic but these are the very institutions in the middle of the mortgage pipeline. We are talking years, not months before prices go up again. But we all have our own rubics cubic of past experiences, prejudices, and opinions, don’t we? This “calling the bottom”, again and again reminds me of the story of the small town freshman in an atheist Professor’s Philosophy class at the Big Bad University. The freshman felt intimidated, but he just couldn’t take the Professor’s depressing lectures anymore. So he raised his hand in class one day and he exclaimed, “Professor, I think all of your arguments are bogus because I have my own theory. I believe the the entire universe is resting on the back of a turtle”. The Professor, smelling blood in the water, smiled and drew a long inhale on his pipe. The Professor replied, “That is a very interesting theory indeed, young man, but have you ever theorized what is beneath the…..”NO, NO, NO” the freshman shouted back, IT IS TURTLES ALLLLLLLLLL THE WAY DOWN!!!

  16. Avatar Josh says:

    I don’t post here often, although I have done a chart or two. I have don’t think we are anywhere near the bottom. Our present day situation is rather ominous when compared with Sacramento, which has more volume to sell through the correction.

    Median Asking Price

    | Sacramento | Reno
    August 2005 | $399,900 | $385,700
    August 2008 | $220,000 | $289,000
    3 year Decrease | $179,900 | $96,700

    I think the Reno real estate market is intrinsically tied to that of Sacramento. The pricing was similar before and during the bubble inflation. I have read here many times that we have to sell through the inventory to get through this cycle. If someone knows where the Sacramento sold median data is (as opposed to asking), it’d be interesting to see. I just wanted to point out that we may have another $80,000 to go.

    Source for Sac. data:

  17. Avatar Josh says:

    The chart didn’t display well on my last post. Maybe this will work better…


  18. Avatar GratefulD_420 says:

    Thanks Guy for the data, facts and no spin.

    Alot of good points made from all here. I definately have to side with BBear, Sully and BSB with their conclusion on a long time to bottom with a free market. All the pertinent data says the end is nowhere near. Data = Seasonal Inventory is high, End of buying season, #distressed listing, #distressed shadow (no NOD’s filed for 6 to 9 months), #unoccupied listing, # of incoming ALT-A’s (wich will be higher end stuff!),weak local economy, weak national economy. “But it’s a great time to buy!” jk.

    The point is “free market” is no longer in place. As Mike pointed our ealier “Stormy Weather.” “large number of HOAs filing notices to get their liens into first position in case of future default.” and also ” Is this an indication that the banks are starting take a breath, and look at renegotiating mortgages, or at least their stance on delinquent properties?

    The answer is yes. Except it wasn’t the orignal bailout they were waiting for… it was the Fannie/Freddie take over.

    I know their is some mixed opinions about how far the Feds will stretch to stop foreclosures and prop up the housing prices. Some say they will just keep %rates low and fees down to increase home purchases, others say they will move to stop foreclosures.

    ….. and the answer is…. they will do everything to stop foreclosures immediately. They will buy all the broken mortgages. They have clearly tipped their hand with IndyMac.

    Just look here….

    Basically… If you can’t pay your mortgage… no problem:
    (1) take the best availible fixed rate (soon 5.5%)..if that doesn’t help (2) take 45 yrs instead of 30…. if that doesn’t help (3) how ’bout principle forebarance….still can’t do it?…(4) How ’bout 5% interest rate paydown for 5 yrs…… then 4%… no how about 3.5%.. can you pay it then? yes. great we’ll waive all your previous penalties and forget the 9 months you didn’t pay.

    …. we’ll just send the bill to the taxpayer. Hope you like your house that you purchased well above your means!

    In a free market no doubt Banterin Bear turns out to have been an optimist this whole time. Unfortunatley these jackals just plain don’t play fair. I think they won’t… but the IndyMac offer really, really scares me. I hope I am wrong.

    Therefore the numbers to watch closely will be the rate of Alt-A foreclosure rate. If the feds can stop the foreclosures cold then they can prop the market price. The bottom will have arrived. We will wollow in debt and rising inflation for years… and years…. and years… until the Wallstreet boys can find another game to play.

  19. Avatar MKchick says:


    Or maybe we’ll get serious about luring more businesses here from California and focus on getting job numbers up.

  20. Avatar Semper Fi sell or die says:

    There is one variable that no one has pointed out and that is how a 20 month bitter election cycle has effected the over all economy.In January we will have a new congress and President (no matter who win)and politics will finally take a back seat .

  21. Avatar Guy Johnson says:

    CommercialLender, in answer to your question, the data reflects transactions that have closed for that particular month. So the data for August reflects closings that occurred during the month of August.

  22. Guy…Will be interesting to see if the builders had a spike from DPA programs being teminated and got rush of orders in August/September. I know of two people who rushed out and bought inventory houses before the programs were terminated.

  23. Avatar billddrummer says:

    To DonC,

    Perhaps I was a bit pessimistic about the median income. The formula I used was this: Presume $195,000 purchase price with 20% down, financing $156,000 for 30 years at 6.5%. Adding 1% for property tax and $150/month for insurance gives you a monthly payment (PITI) of $1,236.03. With a 28% front-end ratio, the qualifying income equals $4,414/month, or %52,973 annually. From the figures I’ve seen, that’s within 95% of the median household income for Reno/Sparks.

    Please correct me if I’m wrong. My teenage daughters and my girlfriend say that I’m frequently wrong, so I’m used to changing my position to reflect revisions in conditions.

  24. Avatar billddrummer says:

    A followup comment:

    I’m aware that front end ratios are higher for FHA/VA financing, but I don’t know how FHA rates compare to conforming ones. In addition, since the loans are at 97% LTV from the start, PMI premiums would negate, in my view, any rate differential enjoyed through FHA.

    Again, I’m open to any contrary viewpoints.

  25. Avatar smarten says:

    All of this talk about “calling the bottom” of the Reno/Sparks residential real estate market leads me back to a question I have posed several times before: what exactly do you mean by a “bottom?” And just so we’re clear, in my mind there’s a difference between timing a “bottom” versus “a good time to be a buyer.”

    To me a “bottom” can be measured in unit sales and/or a median sales price. We reached a unit sales bottom last January. But of course that didn’t coincide with a low point in median sales pricing [as Guy has pointed out] which historically has lagged behind by some nine-twelve months.

    To me the real measure of a real estate bottom is when the median sales price, IN THE PRICE STRATA YOU’RE INTERESTED IN, reaches its lowest point [because obviously we’re not close to a bottom in the $500K and higher price category]. Now if we reach that “bottom” and it essentially lasts for years [according to BB, “once prices find that level, they’ll scrape along for some time”], we’ve still reached a “bottom;” haven’t we?

    But the discussion on this topic seems to have extended to whether/not it’s a good time to be a buyer as opposed to when will we reach the bottom? This is a completely different question which depends upon many different variables to many different people having little to do with unit sales or median sales prices in a vacuum.

    So I would hope that in future comments we not confuse the two. When will we reach the bottom, median sales pricewise ,for all price strata? You can fill in the blank [and you already know what my answer is]. When will be the best time to become a homeowner? Again you can fill in the blank but I suspect for many, the answer will not necessarily coincide with the “bottom” of the market.

    I see that today’s interest rate on a 30 year fixed rate conforming mortgage is now 5.5% [see If this is true and we have another 1/2% rate drop looming in the cards, we may just hit the lowest rates in any of our lifetimes. And if this comes to pass, IMO we’d be fools to not take some of Uncle Sam’s [or we taxpayers’] money to use buying real estate!

  26. Avatar billddrummer says:

    To smarten,

    Well said. It’s true that the bottom needs to be defined by each person seeking to buy, not necessarily when prices stop falling.

    If you take the position that houses are meant to be lived in, not investments to be jettisoned when they serve their investment objective, it becomes as simple as “Can I find a house I can afford in a neighborhood I want to live in?” If you can answer that question affirmatively, then look for a house to buy. The bottom of the market won’t make any difference, and you won’t be ‘catching a falling knife.’

  27. Avatar MikeZ says:

    RE: “Basically… If you can’t pay your mortgage… no problem: (1)…(4)”

    You forgot an option:
    (5) just walk away

    Why climb down into the hole any further?

  28. Avatar Reno Ignoramus says:

    In the early days of this blog, there was a poster here who went by the name of Gotlots. Gotlots was the finest poster this blog ever had. His insight and analysis was astounding. Shortly after Diane opened the blog, Gotlots, who made Bantering Bear look a market cheerleader, predicted a more than a 30% decline in the median price in Reno. Now this was when many posters here were disputing that there was even a bubble. Gotlots used to end all of his posts with the comment that if you wanted to lock in declining value in a house in Reno, there was never a better time to buy. I know this litany even irritated Diane a bit, but to her credit, she let Gotlots post on. Back in those days, the email addresses of the posters appeared on the blog. I believe that Gotlots received some very ugly emails from some of the vested interests who didn’t care much for his views on the market. Ugly enough that he left the blog. As we now pass 30% down on the median, with more to come, I want to remember Gotlots, and to thank Diane for her willingness, especially back in those early days, to allow Gotlots to say things that caused great distress to the realtorindustry back when the realtorindustry was still spewing out the disingenuos spivejive and hype about how you can’t ever lose money on a house in Reno.

    Diane, if I recall correctly, you even put up a post one day asking Gotlots to return. Did you ever hear from him?

  29. Avatar BanteringBear says:

    Hey now, RI. I remember Gotlots. Not sure if I started posting while he still was, but I was reading. That said, I’ve always been on the more than 30% haircut train. I’m as bearish as they come- Gotlots got nothin’ on me!

    PS, Smarten-

    What makes you so sure that Jan 2008 was the “sales unit bottom”? Just curious what sort of magic 8 ball you’re using.

  30. Avatar smarten says:

    BB –

    I’m not so sure of anything. I’m giving my best guess based upon data, history and my experience. It could be just as right or wrong as yours. I’m personally acting on my beliefs, right or wrong. And I suggest everyone else do likewise.

    I say take a look at Guy’s chart. But for this last year, January has essentially always been the the slowest month of the year for unit sales.

    Are you suggesting that within the next five months monthly unit sales volume is going to drop more than 43% from where it stands today? If history is any guide [and it generally is], I find that very unlikely.

    The signature of a market bottom is increasing unit sales followed by a drop over the next 9-12 months in median sales pricing [this is precisely the historical data Guy was able to share with us a year or more ago]; exactly what we’re experiencing right now.

    I guess you could pull a Derrick and wait for the next bubble and burst some years from now and then assert clairvoyance.

    Or you can just wait for January 2009 to come and go. Three to four months after the fact, I guess we’ll all know and I’m certain you won’t be shy when it comes to reminding us all!

  31. Avatar smarten says:

    P.S. BB –

    My personal belief is that the reason you’re seeing a drop in monthly unit sales has nothing to do with demand. It’s the meltdown in the mortgage market which has made qualification essentially impossible [a subject I’ve commented upon in the past].

    But with the new housing relief bill; the Feds takeover of Fannie Mae and Freddie Mac; and the prediction of lower long term mortgage rates; I expect that anomaly to reverse itself within the next several months.

    But like I said, we’ll see!

  32. Avatar BanteringBear says:

    Smarten posted:

    “Are you suggesting that within the next five months monthly unit sales volume is going to drop more than 43% from where it stands today? If history is any guide [and it generally is], I find that very unlikely.”

    I never suggested that. I was merely asking you why you assumed that the bottom in sales had been reached. But I’ll bite anyway. Considering that the five month period from August of 2007 to January of 2008 saw a more than 45% drop in sales volume, the same scenario you find “very unlikely”, it’s hardly unprecedented.

    I’m not going to bet that sales volume will drop below 191, because prices continue to drop hastily. But I am willing to bet that the bottom in median price is at least a few years out, possibly much longer.

    Comparing me to Derrick? You must be feeling a little riled up.

  33. Avatar DonC says:

    No one has a crystal ball. If they did they’d make all the money in the world betting on sports events.

    One mistake is to assume there is one monolithic “real estate” market. There are invariably sub-markets. For example, where I am residential lots are probably at the bottom. Single family residential as a whole is probably not.

    Yet even single family residential properties aren’t uniform. Even if “the market” is not at a bottom, SF in some areas may be.

    This isn’t popular here but the rent/buy ratios are useful. People have to live somewhere so their choices are to buy or rent. If you pay no premium for buying because everyone thinks the market will continue going down forever, you’re on the other end of the spectrum from when premiums to buy were huge because everyone assumed prices would continue going up forever. Neither happens.

  34. Avatar MikeZ says:

    RE: “The signature of a market bottom is increasing unit sales followed by a drop over the next 9-12 months in median sales pricing”

    Smarten, that’s *your* signature of a market bottom, not *the* signature.

    Would you call the bottom of the Dow based on volume while values are still moving downward? I surely wouldn’t.

    My signature is appreciation returning to the market.

    Until then, buying a ~90% leveraged asset is, potentially, a financial anchor around one’s neck.

  35. Avatar DonC says:

    MikeZ – “Would you call the bottom of the Dow based on volume while values are still moving downward?”

    Actually this is sort of the way it happens. It’s called capitulation. Everyone is throwing in the towel and selling, so the volume is high and the prices are going down.

    This marks the bottom unless it’s a false bottom. LOL

  36. Avatar MKchick says:

    The MLS doesn’t cover new construction, correct or not?

    The Assessor’s office seems so backlogged. There were at least 25 new construction sales in August that aren’t even showing up yet.

    For example, there were quite a few contracts signed at CYAN back in April/May that should be completed at this time.

    Unless all the buyers walked??

  37. MKchick…you are correct. New Construction, for the most part, is not on the MLS. Some projects are but most are not including all the major builders like Centex and KB. I’ve been in contact with the agents at Cyan and they indicated that they do have quite a few transactions closing this month. Some are from orders back in April/May and others are from buyers coming in to close before FHA shuts the door on down payment assistance programs. I would expect to see a uptick in new home sales closed for August/September.

  38. Avatar billddrummer says:

    To MKchick,

    As more and more filings get clogged up, the Assessor’s site is getting less and less reliable. I’ve found the same thing in my line of work (principally research for the commercial lending group of my employer).

    If the Assessor’s office is 6 months behind, then how many other NODs, NOTs, and REOs haven’t yet been downloaded?

  39. Avatar MKchick says:

    They seem to be pretty good about posting the NODs and such.

    But the only way I can track new construction sales is through the assessor’s office, and those sales aren’t showing up past 8/5 or so.

    Trying to update my stucco box spreadsheets for the quarter so I can get a true median for my area.

    Closing on my stucco box next week.

  40. Avatar DonC says:

    Josh – Those were very interesting charts. Thanks for pointing out the Sacramento-Reno tie and the relative divergence.

    Thanks for posting.

  41. Avatar BanteringBear says:

    Perhaps someone will look at Josh’ charts and argue that the Reno-Sparks market is “decoupling” from Sacramento and that it’s a “new paradigm”. I’ve heard more BS in the past few years than I had my entire life prior. The nonsense spewed forth by the so called “experts” is disturbing. What qualifies as satisfactory job performance is quite questionable these days.

  42. Avatar billddrummer says:

    To MKchick,

    Congratulations on your closing.

    I just received a list of new NODs filed for the week of Sept 1-5 from Ticor Title. I did 2 property searches on the Assessor’s site just for fun, and neither of them had the NOD listed. Now I know it’s only been a week, but the properties I searched under hadn’t had any document references filed since June!

    And as I’ve mentioned before, my old house, which was foreclosed on back in September 2007, and sold in June 2008, is still listed under my name on the Assessor’s site.

    That’s why I think it’s easier to find foreclosures and NODs by looking at lawns, instead of the website.

  43. Avatar MKchick says:

    Thanks Bill.

    Yes, I noticed the same thing. It drives me a bit batty, as I see dead lawns and want to get information about the property, or I see people moved into a house that didn’t exist six months ago.

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