May median sold price, units, DOM, and $/sq.ft.

62 comments

1. 

   June 13, 2009 at 7:42 AM

   Ct.Clerk

   So is the implication here that everybody who effects a short sale with their lender is a moral and ethical failure? That anybody, for whatever reason, that does not pay off their mortgage for any reason, is scum? That the only moral and ethical thing to do for Diane is to bring a check for $250K to the closing to pay off the $750K mortgage on her house which she now can sell for only $500K? And if she does not have $250K to bring to the closing? That she should simply not move? Stay in the house for the next untold many years? Be apart from her husband to fufill her moral obligation to Otto?

   This standardized ritualistic incantation about how anybody who does not pay off their mortgage is immoral and unethical is nonsense. The lender made the deal: if you don’t pay me back, I take the house. I take that risk.

   I suppose that to Otto, the guardian of public morality and ethics, the whole concept of bankruptcy is only for the immoral dirtbags of the world? For how is bankruptcy any different? No fresh starts for anybody in Otto’s world?

   Some of the righteous posters on this blog have all the empathy and understanding of a pile of rocks. Spare me the pontification.

2. 

   June 13, 2009 at 8:06 AM

   smarten

   I have to agree with BB’s observation that “rents are going to be falling for the foreseeable future” and that “the rental market in Reno, though weak already, is living on borrowed time as the vacant housing situation works itself out.”

   I can confirm that there is now a glut of nice SFR rentals in Incline Village and as a consequence, long term rents have gone down in cost.

   I can also make the same observation insofar as the San Francisco [South] Bay Area is concerned. We have some condos there we’ve rented for over 30 years. Since our rents are typically below market, we typically get a couple of dozen inquiries within the first day of placing an advertisement on craigslist.

   Well last month we had a vacancy and placed our usual advertisement on craigslist. We received ZERO responses [ZERO as in 0]. Only because our former tenant’s mover wanted to rent the place, were we able to fill it. However if it weren’t for divine intervention…

   One would think that with all the foreclosures and short sales, former homeowner-occupants would now be renters and the rental market would be skyrocketing. However if these homeowners are really speculators in disguise [thus living somewhere else], they won’t be renters.

3. 

   June 13, 2009 at 8:25 AM

   billddrummer

   To smarten,

   This is something that’s been puzzling me as well. The complex I just moved into has a LOT of vacancies, notwithstanding the monthly deals they have for new residents. In my building of 4 units, one’s been vacant for more than 2 months.

   I think a 25% vacancy factor for large complexes here is about right. (Vacant places have nothing on the patios/decks, a good indicator.)

   Now, combine that with the number of homes that are vacant (whether for sale or rent), and it’s almost as if a neutron bomb exploded, leaving the buildings but evaporating the people.

   I don’t know where they went either.

4. 

   June 13, 2009 at 9:06 AM

   BanteringBear

   Smarten posted:

   “We have some condos there [San Francisco] we’ve rented for over 30 years. Since our rents are typically below market, we typically get a couple of dozen inquiries within the first day of placing an advertisement on craigslist.

   Well last month we had a vacancy and placed our usual advertisement on craigslist. We received ZERO responses [ZERO as in 0].”

   Wow, Smarten. Now that’s saying something. This is the sort of anecdotal evidence which sheds light on what’s really going on in the marketplace. Sure, a quick browse of craigslist will reveal a plethora of available rentals, but the fantasy prices give little indication of how weak demand has become. Deflation.

5. 

   June 13, 2009 at 11:25 AM

   Reno Ignoramus

   Good to get back to the topic at hand. I suppose it’s possible that all 4,092 trustee’s deeds recorded in the past 18 months were only on empty speculator flips gone bad, but I doubt it.

   It is curious how vacancy rates are climbing in the face of all the foreclosures. Here’s another piece of anecdotal evidence for you, BB. I have a business associate who has owned 2 rental houses in Sparks for about 15 years. These are pretty basic late 1980s houses. Nice middle class neighboorhood. For 15 years, he has had no problem at all keeping them rented. Now one has been vacant for the past 3 months, and he cannot find a renter. He has people come look and they all say that there is a boatload of rentals available now and they all want him to discount the rent in an absurd fashion. Then they disappear. He’s starting to turn into a bitter owner.

6. 

   June 13, 2009 at 5:27 PM

   DownButNotOut

   Just back

   Otto , Otto, Otto, you should know better, pissing off the hosts AND Diane. Free speech is reserved for the charter members, unless you agree/ disagree after earning respect at which point you can join in any time. Living under another regime doesn’t count, sorry.

   Seriously, I for one enjoy the regulars, I also enjoy the free speech so I hope everyone out there that just lurks isn’t intimidated by what they (sometimes) read. After all 90% here is the same stuff – PRICES ARE STILL GOING DOWN – it sometimes takes a little controversy to make sure
   there’s still an outside pulse here. Even Rush knows that.

   Unless you all would rather outsiders didn’t interfere?

7. 

   June 13, 2009 at 5:34 PM

   DownButNotOut

   Forget Rush, Letterman’s got the right idea when it comes to promotion.

8. 

   June 15, 2009 at 5:01 PM

   SouthBay

   RE: Vacancy Rates

   Those who were legitimate owner occupied houses who have now been foreclosed on more often than not have moved in with relatives.

   Mutli-generational (3-4 generations) households are becoming the norm. The earning power has decreased due to layoffs so the bills that need to be paid require more than one breadwinner.

   Add in the fact that many illegals are no longer able to find jobs in construction and are either forced to move south of the border, move to where work is, or consolidate multiple households into one unit to pay the bills and you have even higher vacancy rates.

   With the high price of tuition and many families unable to leverage their home equity I would also guess the enrollment at UNR will be down and would suspect vancay rates to rise from this as well.

9. 

   June 15, 2009 at 9:11 PM

   billddrummer

   Just got the Ticor Title NOD list for the week of June 1-5. Total dollars on the list? $44.8 MILLION!!! In one week!!!!

   Makes you wish for the days when lenders were closing $5 million a month and taking home $15,000.

10. 

    June 16, 2009 at 10:21 AM

    CommercialLender

    I say I welcome Otto’s views on this blog. Picking on Dianne may be in poor taste, but we need diversity in viewpoints and Dianne is a true sport for allowing such viewpoints. That said, no one really knows Dianne’s true picture except her, so “he who is without sin, cast the first stone.”

    As for rentals, yes, I can give support there, too, anecdotally. There is a glut of homes because 20-somethings are staying with mom and dad, doubling up with roomates, or moving out of the area (at least here in Silicon Valley). Oh, and remember “demand” that the home builders were building to? It was not true demand, it was speculators/investors. We all know this. Worse in Reno than in Silicon Valley, but then people moving out of SV due to lack of jobs is worse I think than in Reno. Higher end markets here are just beginning to turn lower in value, but I’ve seen many more homes in my ‘hood for rent now and for much lower rates than before. (My ‘hood here is still asking values of $550-850 psf, down from $750-1,000).

    Ct. Clerk – you are telling me single family lenders offer non-recourse financing? Some maybe? They all said “don’t pay and I’ll take the house only” because they accept this ‘risk’? That they are not seeking deficiency judgements in most cases today is a business decision in this current environment (know they can’t win, too costly to pursue, defaulted borrower has no money left, etc.), but they did not do non-recourse loans at the outset and made the original loan knowing they had a secured loan. So, a borrower does have an obligation to pay his debts back in all but hard or extreme cases. This has been the case since antiquity, BTW.

    In Dianne’s case (I don’t know, only suggesting), one could argue she’s actually taking the high road knowing that the bank would otherwise take back the asset and suffer a loss, so she’s helping to get it sold for a market price now that likely would exceed the post-foreclosure price offered by the bank, if for no other reason the passage of time in a declining market. IMO, if she had the wherewithal to hold on for a longer period to protect her own credit and the bank’s security, or had bazillions in the bank but expected the bank to take all the loss anyway, then IMO she should do so and should feel obliged morally to do so.

    I posted my own situation last week thinking it might generate some thoughts and the few it did were appreciated. I’m not walking away, but am prepared to stomach an upside down cash flow for many years as long as I can. The bank took a risk on lending to me, so I feel I must honor this despite that I gambled and lost.

    Not preachin’, only offering my view.

11. 

    June 16, 2009 at 2:45 PM

    billddrummer

    To SouthBay,

    There were some anectodal accounts last year that businesses catering to Hispanics were seeing lower sales because of high unemployment.

    It seems to be persisting, notwithstanding the numbers about housing starts published today. All the talking heads were foaming at the mouth about how this signals ‘a further indicator of stabilization’ and ‘the best news we’ve heard about housing this year’ and ‘should be a boost to builders and retail.’

    Hogwash. Housing starts ALWAYS rise in May because the weather gets better. And if you compare starts this year to last year they are down 45.2%:

    http://seekingalpha.com/article/143516-housing-starts-soaring-is-overstatement

    I’m turning back to the infomercials in the morning. At least there, you know the information is spun. “Traditional News” outlets have been allowed to get away with spin for far too long.

12. 

    June 16, 2009 at 11:01 PM

    DownButNotOut

    Good thoughts CL. Honest & sincere. I would add Diane has not responded to any of the comments pertaining to her short sale since announcing it. Only Bantring Bear has. It’s his assumption of what Diane must be thinking, I guess.

    If so it’s kind of like speaking to the bodyguard of your host at the public party you are attending.

    It may not mean much (as I’m not a charter member) but I’m impressed with your post, as I agree diversity helps this or any blog.