A few weeks back some really nice clients took me out for dinner. Two years ago they sold a house they had inherited in the Bay Area and moved out here to begin their professional lives. They were looking for fewer crowds, access to outdoor amenities and a good place to raise kids. Looking in the $600K – $1 million range, they were excited about what they could afford here but were also nervous about buying due to reading the blog about signs of slowdown. We would go out maybe 2-3 times a year to see something specific, but when asked if they should buy now, I advised patience because it always seemed as though next fall/winter values would improve.
Settled comfortably in a rental situation, they were flexible about waiting. By the time we got to dinner two years later, they were sooooo happy they hadn’t bought, as they would have lost major equity in anything they purchased, at least $400,0000 is my guess based on what they were drawn to then.
My own blog saved me an estimated $271,000. I had been in contract for two years to purchase a new home that would serve as a rental and had even put several thousand up front into upgrades. But when the time came to buy, my stomach churned, and I had this gnawing feeling it would probably be a bad deal in the long run. Giving up a nearly $10K deposit was tough, but obviously now worth it. Some investor recently bought the same model home at auction last month for 38% of what I would have paid, so thank you, commenters. Watching the market numbers dispassionately and listening to the intelligent discussion on this blog really pays off.
Happy Saint Patrick’s Day!
Reno Ignoramus
Hello Diane:
I remember in the early days of the blog when GotLots would end every one of his comments with the statement that if one wanted to lock in declining value on a house in Reno, there was never a better time to buy. I also remember how you used to call him “annoying”. Are you now saying that you secretly listened to him? Could it be that GotLots, who annoyed so many, saved your friends $400K, and saved you $270K? Could this be the redemption of Gotlots, who I think left the blog after taking so many hits from the cheerleaders?
billddrummer
To RI,
Diane did mention the continuing sense of doom emanating from this blog in general. I think perhaps Gotlots was among the first (I’ve only been reading for a year or so), but by no means the only voice crying in the wilderness.
Now we’re a large choir–Mormon Tabernacle comes to mind.
PollyP
I posted here for the first time a couple of months ago when I feared that Diane and Guy were going to shut off the comments of some people because other realtors didn’t like it. I have been reading this blog since it first started I think. I remember Gotlots and I credit him and Reno Ignoramus with keeping me from buying a house in Reno in mid 2006. I was getting a lot of pressure from my family to stop renting and to buy. I figure that if I had bought the house I was looking at, I would be about $200K upside down by now. And then when Bantering Bear started posting, that just sealed the deal for me. So to Gotlots, RI, and BB, I say thanks very very much. And thanks to Diane too for creating the blog. I have to believe that I’m not the only one who decided not to buy because of this blog. The amount of money that wasn’t lost must total in the multi-millions I imagine.
billddrummer
To PollyP,
I think you’re right. And as I look at my wrecked credit score, I’m reminded that I got out from under a huge debt I couldn’t pay.
So now I pay rent, am slooowly healing my own financial situation, and don’t have to go to Home Depot when the faucet breaks.
tallguy
I’d like to say thanks too Diane. I think maybe the blog only saved me a little green, but I probably got lots more house for the amount of green I did spend. I started looking early 2006, was an early and continuing lurker of RRB, and finally bought middle of 2008. RRB helped reinforce my research that a big price drop was coming (bigger than I would have predicted in 2006 for sure, and I would have been considered a RRB pessimist then), so it was another of those pieces of information that said “wait”. So it was good to rent for a couple years, do my own research, and find exactly what we wanted in a house so when we saw the right one come up we would know it. For sure, this is an awesome information resource, take individual posters with a grain of salt, but pay attention to logic and multiple cohesive arguments coming from an informed community.
Thanks again for all the data..
Carly
It’s hard to say how much green this blog saved me, but this blog is what kept me from buying in 2006. I remember all the comments that cited specific trends in the MLS, and I thought the conclusions, that the market was going down, seemed sensible to me. I don’t have all the knowledge that many of the regulars here have, but I was always impressed by the feeling I had that nobody here had an ulterior agenda to promote. And so I also say thanks to Diane for having the courage to keep this blog up when the commenters didn’t always say things that may have been in her best financial interests.
Ralph
Well let’see Diane. You could have taken the blog down when many of the early commenters were saying that the market was going to tank, which was not the official realtor line. So maybe you would not have had the benefit of the comments that saved you $270K. If we figure a 6% commission rate, divided in half with the other side, then divided equally with your broker, you would have had to sell more than $16,000,000 worth of real estate to make the $270K you would be down if you went ahead and bought.
So maybe you ought to thank this GotLots guy.
Zen
I can tell you what this blog did form me, it reinforced my conviction that the end was near and it was going to be a big fall. I saw the handwriting on the wall since about mid 2003, but anyone and everyone that I spoke to in the business told me I was nuts. I muddled my way through and unloaded an old rental in early 2006, which was just about the time I found this blog. My big plan was to wait until this market settled down and go out and buy a new house. Thank goodness I found this blog. While there was a spirited debate at the time as to where this market was going, at least I found plenty of people who felt like I did. So here I still sit, a few years later, waiting for this market to settle down. I still run into people in the business all the time, who insist that now is the time to buy. I guess eventually they will be right. Fortunately all I have to do is visit this blog to find some sanity. Thank you Dian and all the contributors for your input. This site has given me a wealth of knowledge and resources. It also saved me plenty of green.
Gary
I happened to find this blog about a year ago, just after I’d already listed my house for sale, so I really can’t credit the blog for pushing me in that direction. I do remember being blown away by the mere fact that honest comments clearly contrary to your own professional interests were actually being allowed in this public forum.
I’m glad to hear that you had the good sense to walk away from a deposit plus advance upgrades in your own case, Diane. That’s almost as lucky as finding a four-leaf clover in a field of shamrocks.
CommercialLender
Diane,
I saved no money here on RRB, but in part due to these comments, convinced my brother not to by in NW, some new house for $243 psf that would today be, what, maybe $135? So, he thanks you indirectly!!
What is the latest with your house in Somerset?
Ralston
This blog didn’t save me any green because I have owned my house since 1992 and have had no intention to sell and move. But I have to say that this blog has been the single finest source of information about the Reno real estate market ever since it got up and going. The coverage of the market in the RGJ and on tv has been a joke compared to this blog. The local media has served more as a mouthpiece for the realtor/builder industry than a source of accurate info IMO. When the RGJ was running stories quoting the local realtor board president telling us all how things were going to be just fine, this blog had comments telling the opposite story. Guess who turned out to be right? Congrats to Diane Cohn for the guts to keep this blog going, especially in the early days.
Back2Basics
Lurker here for a year and a half. We thought we wanted to buy straight away when moved here last summer. We looked seriously at a few before we decided to rent (largely because of the advice here). Just since last May, those same houses we thought were such good deals then have already lost 20% of their value. That would have been our entire down payment vaporized in only NINE months.
BanteringBear
After reading PollyP’s post, I feel that all of my time spent here has been worthwhile. She, and others like her, are precisely the reason I started frequenting this, and other blogs. I wanted to combat the nauseating cheerleaders, and shed light on why house price inflation could not, and would not continue. I wanted buyers to believe that not only would prices come down, but down to levels most thought impossible.
I was laughed at, yelled at, ridiculed, hated, and vilified by industry insiders, speculators, and angry home debtors, but that only strengthened my resolve. And it’s not over. While we might have seen the lion’s share of the correction as far as the median is concerned, there’s A LOT more to come. There is a distortion in sales to the lower end, and once the higher end falls apart, which includes Alt-A and Prime, then everything’s going to hell in a handbasket.
Even if PollyP were the only person who saved money because of my (and others) posts, I’d be happy and content. But, I’ve a feeling there are many more, and I take comfort in that. For those who chose to listen to us “doom and gloomers”- here’s hoping you do find your “dream home”, at a dream price, and at the expense of the greedy, ill willed, and uninformed. You are the deserving ones, for you shunned instant gratification for prudent behavior, and will reap the handsome rewards for your efforts.
bob
Looking to buy in 7-9 months. Is there a website that I can get a list of Foreclosures, NOD, Short Sales, etc on a weekly basis or something so that I can track what properties are out there for a specific zip code?
3niner
This blog didn’t save me any money, because I’ve owned my home for a long time, but it has saved a lot for some young friends of mine. It has caused me to learn and think a lot more about what is going on, and has colored the advice I’ve given to others.
I’m inclined to agree with BB, there is a lot of correction left.
Starting in the mid-80s, Japan had a real estate bubble, which grew quickly, then dropped more quickly, then more slowly, to end up about 10% below the starting prices (adjusted for inflation).
After adjusting the starting date, and adjusting for inflation, our bubble looks a lot like theirs. Theirs corrected, then overshot, over a period of 13 years!
It might have been government interference that caused their correction to tail off the way it did, but our government is probably just as stupid as their’s, so the curve may keep tracking.
Obviously, these things vary by city, and we are just talking about national averages here, but we may well have only seen about half of the price drop, so far.
That said, some individual properties, in some segements of the market, may have already fully corrected (here in Reno). I would not buy anything right now, for more than 10% less than pre-bubble prices (adjusted for inflation), and I would look for less than that.
If you can’t find the propterty you want for that price, just wait, it’ll get there, but it might take a few years.
Konarina36
Diane also saved us money but in an indirect way.
After looking at several houses in different areas, we decided that there was too much of a real estate bubble in the Reno area and too many houses sitting empty. We made a couple of low ball offers but were all but laughed aside; one of those houses sold near the asking price and I would not be surprised if the owners are now under water and wonding what happened to them.
The last time I looked on the MLS the other place had dropped the price a couple of times but was still sitting vacant in Somersett and had not been sold after two years. Why do they even bother to keep it listed at such an unrealistic price?
In any event, we’ve decided that we probably won’t buy in Reno at all. We’ve lost so much money in stocks and retirement accounts that we don’t need to move to a low tax state after all. There won’t be anything left to tax when the new President and Congress get through sc***ing us!
EdBear
Wow!
Wife and I had a deposit on a home overlooking Red Hawk in 04. Pulled out, got our deposit back and watched the property escalate, then drop like a rock. Oh well.
Put a deposit on the condo development in downtown Sparks across from the Nugget. Developer pulled the plug. Oh well.
Went looking in 08, asked Realtor to talk to an owner in Toscana at $130 a sf, and got laughed at. Oh well.
Watched downtown Reno implode. Oh well.
Saved lots of $$$$$, some lucky, some smart. Oh well.
Thanks Diane and Guy and you too Joanne. We aren’t stuck with anything. I could kiss all of you. Oh well.
Best,
EdBear
Diane Cohn
Commercial Lender, I still own it and probably will for a very long time.
DonC
Diane, out of curiosity, are you part of the market which is not capitulating? Nothing wrong with this BTW. In most downturns people just sit on the houses until they have to sell or the market comes back up. Just wondering if this is your thinking.
Diane Cohn
DonC, I am in Somersett in a price range that is capitulating… a house like mine not on the golf course recently sold for about $550K. Zillow puts us at $592K, not far off. We were not ready to sell when we should have, so here we are, underwater like many, our equity up in smoke. c’est la vie.
BanteringBear
Diane-
Have you ever thought about just sending the keys back? I mean, isn’t Marin calling your name? 🙂