Here’s a market sector that no one has commented on before – the under $100,000 market. There are about 340 MLS listings currently showing up in this price range. Many are studio, 1 bedroom, or even 2 bedroom condos. Most aren’t in places the readership of this blog would deign to live in. Many are places in a condition where you wipe your feet coming OUT of your tour, not going in. But there are 2 bedroom, 2 bath units up on Clear Acre going in the $40’s. Smithridge, of course. Even some newer 1/1 units on Sharlands dropping below $100,000. A lot of these low end properties not only pencil out rent vs. own, but can easily cash flow as an investment. There are even a few SFRs listed in this price range, though most need work and a little (a lot) of sweat equity.
$100-200,000. 1303 listings, 567 < $150K > 736. There are some pretty OK places in the higher end of this range. This is the sweet spot in the current market, and many cash flow for the investor.
$200-300,000. 1084 listings, 631 <$250K > 453. This range at least for this month contains the median priced house in the area.
$300-400,000 . 449 listings, 251 < $350K > 198. Stand on the wings and hope for the best. No investor cash flow potential at these prices. You are on your own. But the South Meadows still seems to be standing firm.
$400-500,000. 227 listings. No comment.
$500-1,00,000, 415 listings, 278 < $750K > 137. Remember the Road Kill post? Virtually no one can afford or qualify to buy these homes (or maybe they just don’t want that lifestyle and financial pressure any more, but that’s another post). I’m creating a new MLS region called UpaCreek, since I have a hard time figuring out where ArrowCreek ends and FieldCreek begins. The foreclosures ongoing or just getting started down there will knock your socks off, and correction to this over blown submarket is in clearly in the works. I am trying to frame a full post about this area without leading to a professional organization that happens to represent many of the owners here to have another aneurysm. Defaults are rampant, and the losses are going to be huge.
Over a Mil . 213 listings, 168 < $1M > 45. Some properties really are special, and will eventually sell in this rarefied market after a time. But you know, most of these listings aren’t really so special at all if you take a good look at them. Really, what is the retail value of a Bat Cave wine cellar with dining area? Exactly how many burners do you need in your kitchen? Does anyone want to heat and cool 8000 SF anymore?
So what do you think, Team RRB? I thought ‘yall might appreciate a bit of a different breakdown than the standard reports we see. About 9% of our market listings are UNDER $100,000? The upper end isn’t capitulating en masse yet, while the lower end of the marketplace has. Do you really think UpaCreek will turn out to be the "real" Reno and hold it’s value?
(Notes: Listing numbers were pulled 1/23/2009 from the Dickson site, and include all of Washoe County. There is a slight bit of overlap ie. properties listed at $100K showing up in both above and below $100,000 due to their search parameters.)
Grand Wazoo
Mike – this was great, and you are “The Shit”, as we say around my own personal professional campfire.
Well done indeed.
BanteringBear
A good post, but I do take issue with one comment:
“Here’s a market sector that no one has commented on before – the under $100,000 market.”
I talked about this market segment ‘to be’ many moons ago, perhaps well over a year, on this very blog. I’m glad you’ve chosen to bring attention to the fact that many places are now listed and selling for less than $100k. I believe I opined way back when that many, if not most, homes in areas like Sun Valley should sell well below that threshold.
Any particular reason for the “no comment” on the $400k-$500k range? I just found that curious is all.
While it’s true that “virtually no one can afford or qualify to buy” $500k-$1M homes, there sure isn’t a shortage of listings. At 415 strong, these people better start praying for a miracle.
What we’re starting to see, as was alluded to with “the foreclosures ongoing or just getting started down there will knock your socks off”, are some of the stronger hands just walking away. They’ll take the credit hit and move on. Sure will be interesting to see if the lenders start pursuing deficiency judgements since they are well within their rights to do so in NV.
Tom
“virtually no one can afford or qualify to buy” $500k-$1M homes…”
Mike, statistically that may well be the general rule, but I think that inability to meet qualification parameters may not be the exclusive reason for inactivity in this range. From my viewpoint, the issue is lack of value. Most of these properties are really houses that should be listed at $300k to $800k, based on square footage, small room sizes, location, lack of decent spacing between houses, and very shallow back yards. Why in an area of natural beauty and views were the majority of houses built on postage-stamp sized lots, all densely packed together? Even the so-called large lots of .75 acres and up to 1.5 acres typically have a small pad, backed up to a cliff or drop-off, then a neighbor right above or below you. Generous side yard spacing is almost non-existent. Next add on the ludicrous holding costs in some of the gated communities, with their high HOA fees plus in some cases local special district charges, and property taxes that are high and tied to old assessments, and it is easy to understand why there is little activity. Even in the nicer parts of Zip 89511, there is too much cookie cutter density for us. Do we have to go to Glenbrook or buy a lot and build? Pardon my venting, but the price bracket in the range of $500k to $1.2 mm is highly overpriced for what you get, and we are losing interest fast.
smarten
I agree w/Tom’s comments.
But Tom, even if prices come down to reality, you’re still going to be stuck w/postage size lots that back up to cliffs or drop off into oblivion. And you’re still going to be stuck with a hodgepod of architectural styles due tot he lack of CC&Rs; special district after special district; stupid HOA and their exorbitant “transfer” fees; out-of-whack [and getting whackier] property taxes; and don’t forget about the County’s property excise/transfer taxes.
So the question: for you, what interest really remains?
Tom
Smarten, sadly I suppose the answer is very little. We love the area for its natural beauty, the convenient live music entertainment amenities, the outdoor activities, friendly people, the handy location of the airport and its quick in-and-out compared to LAX. But acceptable (for us, peculiar buyers I admit) housing choices are extremely limited, unless one buys a large enough lot to have no close neighbors and builds a custom house to suit the owners’ preferences. I will continue to check the MLS periodically but to date we have seen nothing that turns us on–and I might add, even in the $1.5mm price range. SMALL living rooms are the norm, and small dining rooms in most homes, even in the higher-priced Reno-Tahoe properties in St. James and Montreux. (What the agents say are large rooms to us are small rooms).
billddrummer
Great info, Mike.
Could you superimpose the listings atop sales statistics for each band?
I think that would be instructive.
Great job!!
Sully
Tom, the rooms seem to be the same across the spectrum. I found a suitable house, good floor plan for us, but the garage was dinky. 19′ foot deep – try parking an 18’8″ pickup or SUV in there!
Or you find an oversized garage, and the bedrooms are dinky. 🙂
Knod of like an old construction phrase: Quantity, Quality, Price – pick any two.
BanteringBear
“Why in an area of natural beauty and views were the majority of houses built on postage-stamp sized lots, all densely packed together?”
High priced land. The builders/developers grotesquely overpaid for the dirt, and tried to recoup their foolish investments through higher density and larger square footage, building and marketing a product which buyers didn’t want (I’m talking real buyers, not speculators), but which builders needed in order for things to “pencil out”.
GreenNV
The 10×10 bedrooms in a 4000 SF house are one of my personal pet peeves. And the “garage” size issue has been so abused by developers that there is a code revision working it’s way through the system to define required parking size.
I detest the cluster development pattern, but it is the stated policy of the cities, county, and TMRPA that this is preferred pattern. It supposedly maintains “open space”, developer speak for useless land. It sure does save on infrastructure costs for the developer, though, and makes providing public services cheaper for the agencies. Property tax revenue is maximized by building the most expensive houses on the densest lots possible, making Toll Brothers a local hero.
BillDD, the sales figures across the listing brackets would indeed be interesting. Maybe one of the readers with MLS access could take a look at it.
Phil
With a 9.1% unemployment rate, I see a further increase in foreclosures. It seems this downturn is feeding on itself.
And I have to admit the denisty of housing here is a bit strange. But I suppose the cost of building longer roads was one way to increase profit.
Our city governements approve developments and the anti urban sprawl platforms are always an issue. So approving higer density housing does two things – increases tax revenues, and keeps the spawl down.
Tom
All valid points, thanks.
But if you are a buyer out there looking and you want a small number of large rooms–not a large number of useless small rooms–and with at least 75 feet of side yard elbow room between houses, plus room to get a band and 50 people with caterers in a flat space in the back yard, it is tough to find it in Reno. Even the more expensive Montreux and St. James or Saddlehorn properties don’t have the large living, dining, family and game room sizes we would need just to duplicate our house in Los Angeles. There are some in those areas which are very big in total space, which have very high ceilings, are very new and fancy, but their square footage is spread among many small rooms, nooks and alcoves, or squandered on huge bathrooms and closets. Who lives in the master bathroom or master closets? Why not build a living room at least 25 by 38, where you can get a grand piano and a jazz combo in one end, furniture and a decent sized group of guests in it with milling-about room in a large dining room adjacent?
Why move to the mountains to down-size and live in a San Fernando Valley type of urban density? I will stop now, sorry for taking up so much space on the blog. I am finding Reno-Tahoe to be a big letdown, no offense intended to the local folks.
Back2Basics
We are having similar problems. Granted, we aren’t quite in Tom’s ballpark. We’re looking more in the $250-350K range. We have a large family and need space, but more importantly we want a large (non-vertical) yard for our kids. To find this within GOOD school boundaries greatly limits our choices. Right now we’re focusing on zips 89523 and 89509.
A big issue is that new architects, planners, and landscape architects are being trained in high density neighborhoods, less sprawling, and more mixed use (speaking from experience since I just graduated in this field last year). It is as much about “saving” the environment as it is saving pennies, i.e. maintaining wildlife corridors, creating more social open space, conserving resources, etc. While perhaps good in theory, there isn’t high demand for this because we all like our privacy and the convenience of our own backyards.
james
I don’t see how we can assume the 100k< segment and under is cash flow positive.. At least not most of them.. what about higher vacancy rates? unemployment? and ofcourse Rent’s have and still are headed South…
not to mention resale value? Granted if the unit has a long term renter in place and in contract for AT LEAST 1 year then it is tempting at best.
Sully
Tom, regarding the 75′ side clearance. Are there actually houses in LA with that much clearance, excluding Bel Air?
SouthBay
Tom ~ I must ask why not buy a plot of dirt and do a custom build. With contractors out of work prices have drastically decreased on labor & materials.
I also have to agree on these cracker jack built $500K+ homes being out of whack with peoples needs.
Why is it the master bath & closet are larger than bedrooms 2-4?
Why is it the craftsmanship and materials used are not in direct correlation to the exorbitant price they are asking?
smarten
Well Tom –
You asked me some time ago, why Incline Village?
Well I didn’t realize you were looking for an 8,000 square foot McMansion w/elbow room. Welcome to [parts of] Incline, and come on down. Some of the 6,000-7,000 square foot homes I’ve seen for sale here would knock your socks off. Heck, we just had a low elevation, new construction, 6,877 square foot, Lake view in foreclosure go for a reasonable [by Incline standards] $2.6M. I know this may be a bit out of your price range, but what’s the difference between $1.5M and $2.6M? IF you could get a purchase money loan, that’s only another $4,500/month[):].
And although the neighborly elbow room and architectural style may not be what you have in L.A., WE’RE NOT IN L.A. Tom and that’s a GOOD THING [I grew up in L.A., so I know a little bit about what I’m talking about]! You’ll have to make compromises and if living in Northern Nevada is important enough to you, then… Maybe that means a 50 [instead of 20-25] minute drive to the airport? Maybe more snow than you’d like? But thank GOD, it’s NOT California [and it’s NOT L.A.]!
I agree w/you about bedroom sizes. But really, there’s an easy solution. Simply knock out the common wall[s] and combine two or more bedrooms into one. Or turn one of the rooms into an oversize walk-in his/hers master closet. If you want custom, you have to build it yourself.
Happy hunting.
Tom
My wife and I are now discussing the building option, in fact.
Yes, there are places in Los Angeles with such side yard spacing, the older areas, not the new tracts. These are in Hancock Park in mid-Wilshire, in the Rolling Hills/Palos Verdes peninsula area, or if you prefer to stay warmer, in the northwest valley, where two others are in the Chatsworth area (Monteria Estates)and parts of the upper Northridge area (Country Court and Sherwood Forest area). Also, Hidden Hills in the Woodland Hills area has such properties. But…leave your little private enclave and you are in a different world: noisy, heavy traffic and a crowded, multi-cultural city; people shouting at you for some imagined traffic grievance in languages you don’t understand. Who needs it? Mayor Antonio can have it all.
We have 65 feet on one side and 70′ on the other side between us and the neighbors’ houses. The back yard measures 100 ft from rear of our house to yard wall, then another 100 ft to the back of rear neighbor’s house, and the lots are totally flat and useable. So, no close neighbors. And there is no noisy Mount Rose Highway anywhere close by!
But then it is a long drive to fishing, 4×4 exploring, places to shoot, clean air and mountain views. My horseback riding trails are now S & S tract homes. And the live music venues here are all playing kid music, you know that stuff my generation would disdain as heavy metal, but the Gen X’ers call it DJ hip hop dance music, whatever, it is terrible. (I think those glitzy new downtown Reno bars featured in the periodic RGJ photo series are playing the same sounds.) But Diana Ross, the Temptations, other R&B and old-time rock groups do still appear in Reno and Tahoe, and in West Hollywood or Santa Monica you might instead see some tatted-up green hair punk rock group. I prefer something with a recognizable melody, thank you.
So Reno-Tahoe rates tops with us in all departments but the housing!
Tom
Smarten, respectfully, your reply to me, as do many of your posts, sounds facetious and needlessly snippy; maybe it is just your style, but it isn’t necessary to make your point. You seem to be a smart guy, so why be rude? Anyway, I think that about 4,800 ft would be sufficient for us, IF it were allocated appropriately.
As to loan qualification criteria, we could meet that but we won’t use a mortgage. Whether there is an economic cost to losing the investment return on the excess of possible interest income over mortgage interest paid out or not, I just don’t want a mortgage at this time in my life. That is a personal decision, just like you wanting to be near the skiing trails.
That extra mortgage amount you joke about and apparently question my being able to pay, if I understood your remarks correctly, is less than the monthly cost to keep a horse in training at the track, and I have had three running at once during some racing meetings. I mention this only to illustrate that before you make cracks about people not being able to qualify or make mortgages, you might want to know who you are talking about first. Just saying, you know?
I have looked at the Incline house listings in those upper price ranges you refer to and have made calls on some, and studied the photos. They are very nice, but still the living rooms are generally small. Still very nice houses in many other respects and I am sure will be right for someone. I found none with large living, family, and game rooms plus a separate large formal dining room. Most are great room concepts and the living room is an afterthought.
Enjoy your skiing up at the Lake.
doofus
Tom, I doubt if you could find what you are describing as your dream house anywhere, even in LA if you moved. Certainly don’t expect to find it here in production subdivisions, no matter how upscale. You might have a chance of finding a property that meets your specifications in the Old SW, SW, or SW suburban, but they will be older homes built for another era. Which is what it seems you are seeking to recapture. Not a lot of homes anywhere were designed for the jazz trio on the patio while the other guests mingled around the grand humming show tunes.
If you want usable lot space, you need to look at lower elevations. There go the views, but you can get a lot of the other qualities you are searching for. You are going to need to be a custom deal to be happy. Go for it.
Phil
Tom,
Sounds like building your own house would be your solution, and it seems you are comming to that conclusion as well. If you do go that way I should thank you for helping our employment. And welcome to the area if you decide to go this route!
I also agree having a mortgage to leverage more assets sometimes just isn’t right for everyone.
I actually have a 3800+ sq foot home for the two of us, and although I am comfortable in it, most the times the space is wasted. Although I have never entertained 50+ people with a live band. YET!
Sully
Tom, have you looked at any of the mansions on California Ave. Only one listed now, but they have been coming on and off the market. Lot of trees and history there.
DownButNotOut
Tom – I like your style. What worked for us was to buy a large house on 2 acres, built in 1896, and remodel it. We integrated the inside with a covered outside, complete with built in heaters for those unanticipated colder weather parties. Large sliding glass panel doors allow us to go to 75-100 people at a crack, yet still be a little more intimate when there is a small dinner party. We’ve had weddings, anniversaries, and sit down dinners for 60. Remodel might be an option, as it worked for us. We were able to get the larger lot, retain a ton of character in the house, and have a full basement we turned into a wine cellar.
And although we don’t race, when the four acres next door came available we purchased it, and have our barn and horses next to us now.
Just another view of a way to get the place that works for you.
smarten
Tom, my response to you was NEITHER facetious, snippy, rude nor intended by me to be any of the above. If that’s the way you took it, I apologize. If that’s the way you think all of my comments are/have been, then I guess it’s my style – I’m sorry you’re having difficulty separating the wheat from the chaffe [maybe it has something to do with where you live/were brought up?].
And I guess I [inadvertantly] touched one [or more] of your “buttons;” a mortgage. Although you may be able to qualify for a mortgage in excess of $417K, I assure you that you are in a minority. People like me who don’t receive their income from “earnings” are having great difficulty in securing a mortgage. I suggest you watch the evening news – this is what politicians are telling the public.
I never meant to infer you COULDN’T qualify for a $1M mortgage; I would never be so pretentious. My point was ONLY that if you can afford to pay $1.5M for a house, what’s another $1M assuming you can secure a purchase money mortgage for that sum? So I think you read far, far more into my comments than what was intended. I’m happy you don’t think you have a problem securing a mortgage [but choose not to], and the cost to you of a $1M mortgage is less than the cost “to keep a horse in training at the race track.” But I suspect I’m accurate in stating few on this Board know anyone who owns a race horse.
As for the sizes of living rooms in mega Incline houses, I don’t know where you’ve looked but some of the places I’ve seen [including the recent sale to which I previously referred] had very, very large great rooms adjacent to kitchens/eating areas as well as very good sized bedrooms. My personal favorite had 30 foot ceilings and enough volume to fill several swimming pools – and it isn’t the only one!
I know of two other resales within a stone’s throw of one another and another around the corner. Each has 7,000 square feet or more of living space with very high cathedral ceilings, carnivorous living room space and commanding views of the Lake. I’m certain you wouldn’t feel “cramped” by any of them.
So my point was/is simply that if you’re looking for this type of space with no neighbors and for all intents and purposes price is no object, IMO your odds are greater in Incline than Reno.
In any event, happy hunting to you as well.
Tom
Thank you to all for the helpful tips and comments; thanks, Smarten, we will drive around up in the Incline area next time up.
Transplant
“That extra mortgage amount you joke about and apparently question my being able to pay, if I understood your remarks correctly, is less than the monthly cost to keep a horse in training at the track, and I have had three running at once during some racing meetings.”
Tom <= the new Derrick.
Tom
Transplant, Funny, thanks for the joke. I probably asked for that one.
DICE
Tom,
You sound like a real class act. I’m sure some women might even find you attractive, with that THING on top of your head..
go home, take a shower, and put some clean clothes on .. Be an adult!
Class~A scumbag
lurch
Welcome back, D(ice)errick! Did you buy that place in Spanish Springs you were looking at? Did the oil shorts work out for you? Your contribution investment strategy has always fascinated me, and hope it has served you and your family well.
I’ve SO missed your postings and the insights they provide. You were such a nice diversion from the other permabear posters here, and you always TOLD IT LIKE IT IS! Don’t stop, Bro! This site needs you.
DownButNotOut
Hey Marla – can I call his smack yet? I’m fairly sure even Tom would agree.
john
Tom – what’s wrong with this house? Former owner had a 1.5 offer in 2007 and turned it down. Now bank owned. I have toured it several times and it would seem to have everything you are looking for and more for less money. Put this in LA and it would be 2.5 mil. In incline at least 1.8.
MLS 80015770
http://www.realestateshows.com/show.php?mls=basic&id=338010
Tom
Yes, thank you, John, our buyers’ agents, Guy/Diane, have pointed that one out to us and we have investigated it. I like that house, but my wife feels that it has too much of a mountain-cabin rustic look to it, with a log column in the great room. (She has accumulated two generations of large European furniture pieces which fit-in better into a more traditional, Hancock Park type of house, for those of you familiar with the Los Angeles area. She is used to a center-hall, Hancock Park type of presentation.) But the property you mention is on our watch-and-consider list. So there are appropriate houses out there, it just requires patience and a good deal of searching. And compromises, as Smarten has mentioned.
Sorry if my impatience and frustration with our search has sometimes made me sound disgruntled.
john
OK Tom, you sound like Montreux kind of folks. How about this?
MLS 70015684
http://tours.tourfactory.com/tours/tour.asp?t=361074&idx=1
Originally on the market for 2.4. Marked down last week to 1.55. I walked around it a few days ago and it’s really nice. Again, put this in the right part of LA and it would be twice the price. Over 2 mil in Incline. And it’s everyone’s listing favorite agent, Money Honey Pavel or whatever smarten calls her. Make her grovel for 1.35. Could you even build this house for 1.5 today, forget about the land which likley cost the builder over 400k at the peak in 2006.
smarten
Your property John, sold at trustee’s sale in mid-September for $1.088M. It ONLY has 2,772 square feet of living space. It’s NOT located in St. James Village. Simply stated, it’s OVERpriced.
If this property were located in St. James Village and it tickled my fancy, I would be looking at a $750K offer. In Galena Forest good luck!
Of course these are just my opinions and I could be wrong but…
Sully
Tom, those columns can be dressed with column kits. The various styles available (custom also) might bring the room in line with your wife’s taste.
john
Smarten – I have been in the house 4 times. It is not 2772 sq feet. It is what it is listed at. Why do you think you know otherwise?
smarten
John, the reason I think the home is 2,772 square feet in size is because of what was reported by the Assessor after foreclosure sale – go to http://www.co.washoe.nv.us/assessor/cama/quickinfoform.php~ParcelID=154-063-07&CardNumber=1 . Could the reason for the discrepency be a 1,958 square foot “finished basement?”
Even if it’s 4,000 square feet, IMO $1M is too much to spend for Galena Forest. Sorry.
john
Smarten – yes, the basement is finished, very nicely. What about that Montreux listing?
Could you look up the status of another property in Galena, 630 Piney Creek Rd. It was on the MLS a couple weeks ago but no longer. I don’t think it sold as it’s not completed, I think it was foreclosed.
skeptical
Mike,
Came across this old thread trolling through the archives for some other data. Would love to hear your updated perspectives. One quote caught my eye:
“About 9% of our market listings are UNDER $100,000? The upper end isn’t capitulating en masse yet, while the lower end of the marketplace has.”
Something tells me that there is alot more under $100k, and that the upper end is showing signs of capitulation, FWIW….