Below find July’s Market Condition Report brought to us by our friends at First Centennial Title Company. [click on the report to enlarge]
From the report:
- SUPPLY (ON MARKET): Continues to hold very steady in the current range with little meaningful deviation (6th month). This implies that as the market resolves supply, it is being replaced with about the same level of new activity.
- DEMAND (SOLD PER MONTH): Demand is up 22 units from July for SFR and down 5 units for Condo. Large and meaningful changes in demand are becoming less likely.
- FAILURES (EXPIRE-WITHDRAW): The rate of failure is on the increase for both types. This supports proximity to market peak. This is the first month in several months that the failure rate increased over the previous month.
- IN ESCROW (FUTURE CLOSINGS): SFR in escrow inventory declined by 3 units, while Condo moved up a significant 15 units. Based on rather constant levels of properties in escrow, expect the SFR market to loiter (in terms of closings) at or near current levels in the near term while Condo will begin to move up.
- PERCENT SELLING: SFR very steady as closings and failures balance out. Condo lost 8 points due to increase in failures. While Percent Selling it is not likely to drop dramatically, large increases should not be expected.
- MONTHS SUPPLY: SFR little changed from July while Condo moved up slightly. Current level of Months Supply is still relatively high and is not shifting in a meaningful way. Without meaningful changes or shifts in Months Supply, current price trends will remain on current trajectories (slightly negative per month).
- MARKET SPEED: Market Speed hardly moving at all for both types. The pace of the Reno market has halted at the current level. The best performing Reno submarket remains Fernley, returning a Market Speed of 44 (up 5 points from last month). The slowest is Yerington at a very sluggish 6 (down 7 points from July).
- PRICES: Price indicators are erratic but signs of stabilization for SFR are apparent. Condo still demonstrating weakness. Expect this up and down trend to continue. Large changes in price should not be expected, while small diminishing negative shifts are more likely. Long term buyers should not fear buying in the current market since market stabilization is clearly apparent and close. However, speculators and short term players should be more cautious.
FutureRenoHomebuyer
Overall looks like the market is marking time. Looks like there is no appreciable change in supply/demand this month, meaning prices stagnating.
Open question: in a normal market, shouldn’t we expect measurable increases in activity and demand in the summer months?
In other words, could it be that normal seasonal factors (increase in demand/activity in the summer) are masking a continued deterioration in the market? I guess we’ll find out as we get into the cold months, when activity typically declines.
Still comfortable waiting until next spring at the earliest, FWIW….
Joe
I just can’t seem to agree that we’re close to bottom/stabilization/whatever you want to call it. I’m renting a home in Damonte Ranch and it seems that most homeowners that I know around here bought their home a few years ago new, are currently well over $100k underwater, have household incomes of under $80k, and spent around $400k for their house. I’m curious if most of these people used a 5-yr teaser rate, and that is how they can afford their monthly mortgage payment with their current salaries. If so than very soon a lot of people in Damonte will be walking away, forclosing, or trying to short sell. And I really don’t think the bottom-callers are taking this into account; and I’m sure Damonte isn’t the only newer area with this soon-to-be big problem.
Gerry
I agree, theres another good 20% downward to be rung-out of the reno/sparks market to get to realistic non artificial affordable values, My real estate buddy bought two investment homes “a steal” {or so he thought} Now things are starting to look unpromising and he’s scared to death of loosing immediate equity, Not to mention hard time renting.. Looks like all the hype was just that “Hype”…. I’ll be waiting
dope
Keep waiting.. go ahead!
maybe next spring you can get a junky house for a decent price!!
while right now you have awesome houses at decent prices..
by time this market has completely stabilized MOST of the good deals will be gone.. Don’t take my word for it.
another 20% down? HAHAHA please! that is hilarious !
Gerry
NOD’S at an all time high?,Foreclosure fillings at an all time high? Unemployment coming up at all time high? Floods of inventory.. This is a SLAM-DUNK… The market has only one place to go… And that is DOWN!.. I think the only dope out there is the stuff people are smoking when they sign…
FutureRenoHomebuyer
Dopey,
Seems like most of the action has been below $150K, and the market above $500K appears all but dead. I would therefore deduct that the “junky houses” have all been scooped up at (hopefully) decent prices.
Meanwhile, the “awesome houses” sit, and wait. Price gets reduced $10K, and they wait. Another reduction, and wait. Lots of waiting. Not much selling. Lots of waiting, though.
Ralston
Joe, the situation you describe for Damonte Ranch is the same all over town. ALL over town.
The number of people who are now upside down on their houses is truly sobering. Many, in fact most, of these folks continue to pay the mortgage for a variety of motivations. People who put something down seem to be wanting to hang on. People who put nothing down are walking away. The huge question thus is for how long will people continue to pay the mortgage once they realize that they will never, and I mean NEVER, get back to even?
Many houses that sold at the bubble peak, in 2004-05, are worth 50% of what they originaly sold for. A house that has lost 50% of its value needs to appreciate 100% to get back to its original value. It will be decades and decades before houses appreciate 100% from what they are worth today.
We may well be looking at waves of foreclosures for years and years to come.
billddrummer
Slightly off topic, but a harbinger of things to come in the fall:
So far this month, 604 NODs have been filed.
Last month, 711.
So far this month, only 150 TDs filed.
Where’s the shadow inventory?
Agnostic
In reference to ‘Dope’…..how would you counter these arguments from T2 Partners, LLC and their July 26, 2009 published views?
http://www.moremortgagemeltdown.com/download/pdf/T2_Partners_presentation_on_the_mortgage_crisis.pdf
GreenNV
billdd, did you notice the large number of South Meadows NODs that got filed yesterday (books 161 and 164)? It almost looks like there has been some “reverse red-lining” going on by the banks. Also, an awful lot of the NODs in the last few days have been from 2008 default dates.
billddrummer
To GreenNV,
Yes, and if you look at the construction dates they’re clustered around 2005-2007.
I know that the former First National Bank of NV was writing a lot of Alt-A paper in South Meadows. I didn’t look to see who the lenders were for those neighborhoods, but it wouldn’t surprise me if they were successors of that bank.