The latest Washoe County recording stats have just been released by our friends at Ticor Title. September saw:
- Re-fis continue to fall; down 15% from August’s number
- New homes sales up nearly 13% over August’s new home sales
- Resales also increased nearly 13% over August’s number
Washoe County resales hit 719 units in September. Though not shown on the graph, I had to go back to the bubble years to find the last time a month had at least that many resales. It was way back in June 2006, when 759 resales were recorded in the county.
Washoe County Notice of Default filings for September totaled 930; down 12.8% from August’s whopping 1,067.
Click on the charts below to enlarge.
RagingBull
Raymond and Martin,
Touche’. I’ll give you two students a “satisfactory” for paying attention.
Yeah, I did use a bit of flair and gusto, but I had just gotten done reading all of the Bear’s recent pontifications and I was feeling pretty jazzed up and poetic.
FWIW, I don’t mind BB and his contributions as he’s kinda transcended the whole blog and stands as a Greek chorus for all the dour pessimists out there. It’s his mindless imitators and other lemmings that can really crease me from time to time — the ones with the mixed up grammar and severe lack of any original thought.
All that stated, don’t you pessimists get tired of the dour predictions of the end of the world?
So, I thought I’d spice up this blog a bit and represent the other side of the argument. Since I posted that charming contribution of mine that you so glowingly referred to, I believe a bit of balance has been restored. Think of me as kind of a Jedi Warrior for Reno Real Estate ;). To varying degrees Tired of Waiting, Smarten, Bob C, Johnny, and Karla have contributed with something outside of the standard doomsday mantra that is more typical here. So, mission accomplished. May the Force be with you.
Thus, to make myself perfectly clear I believe there are deals out there. I refute the Chicken Littles out there. I also believe you can still get ripped off, especially at the higher end. And, I could be completely wrong. I don’t have the answers, nor does anyone else, no matter how charming or irate their posts are. As CL would say, ’nuff said.
willk
If banks are holding back converting NODs then maybe we are in for an L shaped recovery (if we are at the bottom). Banks trickling out houses will balance out the shortage of new builds.
Move to Reno
After reading Dirtbagger’s post, I have difficulty understanding how he reaches his conclusions about BB or Reno. Probably some connection between BB being correct about the housing crash and the fact that he “some how” holds BB responsible for it. I mean, Reno is a warehousing/distribution center because its taxes are lower than California. Has nothing to do about the local labor pool.
As for the “casino mentality”, welcome to Nevada. The movie “The Misfits” tells you everything you need to know.
As for moving to West LA, yeah, I think Dirtbagger will fit in better there and is a good move on his part.
Dirtbagger
Sully –
You are correct. I made some misjudgements about moving and running a light manufacturing business in Northern Nevada. I under estimated the value of an having an established manufacturing infrastracture(as in So Cal). Relatively simple tasks like finding a local replacement for injection manufacturing was nearly impossible. Locating competitive sources of custom packaging was difficult. I had to teach myself about PLC’s and ladder logic programing because there were no techicians in the vicinity. The list could go on and on.
We gave up on domestic manufacturing and outsourced production to Toluca Mexico and SE Asia years ago. We simply could no longer compete against the foreign imports. End of story.
I find the posts about Los Angeles amusing. That is the mark of a great city. We can all live in LA and have different life experiences. Most of the people who moved to LA and stayed, started out living in the gritty parts of town. I worked and manufactured in East LA, Vernon, and South Bay. If dirty diapers on the sidewalk is the worst you found, am curious where you lived and worked. How about a dead bum in a downtown alley or a garment district that smells like piss. As time passed (25 years) most of us moved to the better areas.
As for an urban life style, isn’t that exactly what some members of the Reno community are trying to create in the downtown core.
Final point – Opinion only. Our children will need social and work skills that will enable them to live and function in a multi-national world.
My wife and I believe that completing the education of our children in Los Angeles will help give them that exposure.
People move to and from Reno every day for all sorts of reasons. It does not mean they dislike the area or the people that reside here.
DownButNotOut
MoveToReno- keep under BB’s skirt. It’s safe there and you won’t have to come out until the upturn has started in a few years. I too think Dirtbaggger will enjoy West LA more – just not for the same reasons you’re trying to point out.
As to a suggested solution to the RE problem, why doesn’t Reno try to bring industry to town? There’s no State income tax, cheap land good weather and yet few want to relocate here. What’s left, the workforce? Why isn’t anyone talking about a solution rather than agreeing an employer should go as fast as you can say ‘West LA?
Is anyone that writes in here trying to do something about the fact Reno is dead last from a recovery standpoint? Sorry but I just read my business future in Dirtbaggers experience and I’m going to look closely at not making the same mistake.
As for being a shill; I asked once on this blog whether we could sway RE in Reno. Using the starting point that most people that read RRB are pretty savvy. I got a resounding ‘no way’.
So I’m not sure how anyone can be a shill.Too optimistic, unrealistic, delusional? Sure.
Still not bad attributes to have for life.
Move to Reno
Down but not out….don;’t tell me that you are another one of the guys that got caught up in the housing boom.
So you are saying that the upturn is a “few years away”? Looks like I can sleep easy tonight knowing that.
West LA and Reno are worlds apart culturally.
Sully
Let’s see, bring industry to town. You mean put the cart back behind the horse! A novel thought.
What could they do with more jobs, expanded workforce more tax money to spend. Naa that’s too much work. Its easier to sit on hinnie and cross fingers. These yoyo’s still have a $20,000 limit that can be outside a trust before probate. At least California has a $100,000 limit.
The whole political system here needs to get into the 21st Century, or Nevada will continue to fall further behind the curve, actually they’re not far from the bottom now.
It will take the entire range of state,county and city working together to bring something of substance here. Casinos can only do so much, mostly in the leisure area.
A mini high tech area would be nice, if supported by the powerhouses from Silicon Valley. Something to deviate away from gaming and warehousing.
Built it and they will come, not get em here and they will watch you build it.
Sully
Sorry, heinie not hinnie.
Move to Reno
Sully, I’m not that sure Nevadans want a lot of progress. They killed Yucca Mountain and that probably would have generated several $billion a year to Nevada’s tax coffers.
I like Reno
I just want a nice house in a nice neighborhood. Reno has plenty of that. I’m not from Reno, but I’ve visited many times, and my wife grew up there. I really like Reno. I plan to move there with my wife and kids next year.
I don’t need monumental growth, or big companies moving here. In fact, if that started happening, I’d consider it a detractor. Move to any metropolis in the country if that’s what you’re in to.
Get bigger. Get busier. Get more traffic. Get more crime. Get more of everything. No thanks. Reno has all that I want.
I like Reno just fine, and am quite happy if no one else does. If you are happier in California, go for it. I was raised there and don’t want to go back, except to visit. It’s a beautiful state, but the governance of California is a real mess, and taxes are set to skyrocket.
Reno has Lake Tahoe nearby, a good university, good neighborhoods, the Aces, great outdoor recreation.
If you really don’t like Reno, then why are you on this blog? What I get from this blog is a good feel for what is an appropriate price for various houses in various neighborhoods. It’ll ensure I don’t screw myself too hard when I do buy. All this talk about how great California is makes me wonder about the authors, and why they are on this blog.
I like Reno, just fine. Sue me.
DownButNotOut
Well there’s your demographic. Hope he can procreate.
Sully
I like reno, too. But it doesn’t like itself. When I suggested a mini area, I meant mini – not a throbbing high tech center hiring thousands of people.
Something more like a large training center/school that specializes in high tech jobs.
I don’t want the LA or Silicon valley rush hour traffic either.
But depending on casinos for tax revenue isn’t getting the job done. Tribal casinos have taken too much away from them. Hot August nights only goes so far.
How else are we going to fill up all these 400K+ houses. The US Census dept came out with an update last month and shows the median household income in Washoe County (for 2007) at $54,500.
Are you willing to pay 4-5 times more in property taxes, so the county can keep their spending program in place? Or perhaps sitting on your heinie is a better way, seems to be the mind set here anyway.
Another thing, the part about the limit on the trusts. That creates zero problems with traffic!
And I agree with the statement on California governance, that’s the main reason I left. But this is 2009 not 1909.
Carleton
Median household income for Washoe County is $54,500.
So a $500K house is only 9.175 x income.
What’s the problem?
smarten
Sane Economists don’t make monetary bets on the future of the economy – especially on this blog.
So coining lyrics from Cypress Hill Mr. “Insane in the Membrane, is “anyone…willing to bet…that today’s $1 million asking price in IV, will exchange hands at 500k sometime in the next 4 years? Any takers?”
Well again, you need to define your poison [so I will]. And I’m not willing to wait 4 years for you to pay up. So let’s make it 2 years. And given the market, I think I need some odds. So how about it SE?
I’ll give you five examples [take your pick] of the current $1M IV listings I have in mind that WON’T exchange hands for $500K within the next 2 years [meaning you lose]:
MLS #937526 – 886 Rosewood Circle listed at $990K
MLS #938558 – 809 Rosewood Circle listed at $995K
MLS #938557 – 826 Rosewood Circle listed at $995K
MLS #938556 – 832 Rosewood Circle listed at $995K
MLS #938409 – 869 Rosewood Circle listed at an even $1M
Given this is Nevada, I’ll put up $1K; you put up the multiple of this figure; Mike will hold onto the cash [are yhou willing Mike?]; let’s have Mike invest the money in a no load China emerging markets mutual fund; and whoever wins inherits the fund’s position.
When you throw out a bet on this blog [are you listening Derrick?], you put up or leave [and when you leave, don’t come back using one or more aliases].
So are you game SE?
Walter
I think you have materially altered the proposition Smarten. I think the whole point of SE is that this market deterioration is going to be a long slow haul, especially in the upper end of the market. You can’t just cut the time period in half. Also, picking 5 houses on the same street and limiting the bet to just those houses seems a bit of cherrypicking, no?
smarten
Sure Walter; that’s the point.
Come on, brand new, over priced construction that has been on the market for over a year. Price/square foot approaching $400. Delusional seller in trouble. Construction loans coming due. Mortgage resets on the cusp. If I gave you a similar example in Somersett or Damante Ranch, how would you respond? It’s not like there are a lot of IV properties for sale at $1M. And what are the odds they’re going to resell within the next 2 or 4 years for that matter? At least I selected something we can say will sell [a multiple number of times] within the next 2 years.
And what’s this garbage with 4 years? Let’s make it 10. Or how about 20 [so no one will even remember the bet; let alone collect]? Mr. Econ is willing to bet that after IV real state has dropped 40% or more in value in the last year plus [just listen to the pundits], it’s going to drop another 50%? He doesn’t know what he’s talking about and my “clarification” of his bet makes this abundently clear to anyone who really knows IV real estate.
Marilee
Hooray for my side!
I am smart and you are stupid.
I am right and you are wrong.
I am wise and you are dumb.
You all have far more in common with each other than you realize!
You are all really great at talking out of your ass.
If most of you were half as smart and half a right as you profess to be here, you’d be so frickin’ rich you’d have no interest in this little blog. You be off on your yacht somewhere.
Such a collection of Masters of the Universe it makes a girl quiver.
Dipsh!t
Marilee (aka Bantering Bear),
Your so funny. That’s good. You almost had me Bear. I almost can’t keep up with your aliases. Where you been all day?!!
What’s so clever about the post is that you joined right in with that new name (transgender, even), and did the very thing you were accusing us of.
I can’t hardly keep up with you. 🙂
Sane Economist
Smarten,
Glad to make your acqaintance. What I had in mind was a simple wager between enquiring minds. I’m just a poor economist – I can’t afford $1K- but as I admit to being the instigator, I’ll settle for $100. Ok by you?
Ok some groundrules.
I absolutely have to insist on the time frame as per my above post ie. June 2013. See, although I am only a poor economist, I am privy to good information. The first meaningful uptick in IV ARM funded property begins in Q4 2011. Based on trends involving other high end properties around the country, capitulation usually takes places 18-24 months later. Which leaves us in Q2 2013. Sorry but I have to insist on this.
As you mention there aren’t that many houses that change hands in IV. So I’ll give you this, and make it 2 houses currently priced over $1 mill. will exchange hands for less than $500K.
Now, with regards to the places you list above;
As you can tell, my prediction is based upon the implosion of the resetting ARM (and deflation, but thats another matter). None of the places you list is being funded by an ARM, and only 2 properties are currently holding a mortgage. So as they don’t fit my model, I’m gonna have to pass on those.
So, how about this proposal?
I look forward to your response.
BanteringBear
So, Dipsh!t (very appropriate), I mean Derrick, how many different names now, huh? You angry that I saw through your latest “tired of waiting”? No matter what name you post under, you’re completely transparent as you write like a child, and your message is always the same. I would actually not be surprised if you are Marilee as well, though there are too few spelling and syntax errors. Unlike you, I have absolutely zero need, or interest, in posting under different moniker’s.
BTW, I’ve been meaning to mention that since you were foolish enough to use your full name when you first started in with your mindless diarrhea of the mouth a few years ago, I went on the Washoe County assessor’s site to look at the house you used to pretended to own. You don’t own a house in Reno. You’re a fraud. And, after your latest see through posts as “tired of waiting”, it seems that you are, if you’re not still lying (which would be hard to imagine), buying a condo. This, from somebody who has insulted anyone who has ever lived in an attached product. You have ZERO credibility, and are obviously a lost soul in dire need of attention and help. If I hadn’t seen your myspace page (thanks to GreenNV) I’d think you were 13 years old, though perhaps you are of the “slow” variety. Sad, sad, sad…
BanteringBear
pretended = pretend.
I wish we could increase the size of the comment box while writing replies. Its small size makes it difficult to review.
Sully
Sane are you really an economist? The reason I asked is because economist have a poor track record for calling the start/end of recessions.
I do like your 2nd qtr 2013 date, as it coincides with something I’m working on that is not directly real estate related. I was concerned about the CPI data (because of all the changes made to it) going back to 1929.
Long story short – My charting showed the beginning of a new bull market (stocks) in Oct/2012. This date would be six months ahead of your “bottom” (?). It actually fits in the puzzle.
Sane Economist
Sully,
I am an economist, and yes you are correct, most economists have poor records predicting just about anything.
However, I still think it is a good idea to do one’s research when purchasing a “desired liability” such as a house. My wife has this urge to retire in IV, so I have done some scouting around of the local real estate, as I think I’m going to be forced into buying something.
Sane Economist
BTW,
Did anyone notice the unemployment stats that came out this morning?
Nevada is sitting at 13.3% – a new record.
BanteringBear
Yes, I noticed that a few days ago, Sane Economist, and commented on it. The idea that there will be any stabilization in the Reno housing market in the face of the highest, and still rising, unemployment in the history of the city is seriously deluded.
Sully
Move, I’m not sure where I stand on the Yucca Mountain issue, but I am finding a lot of head in the sand mentality here.
I’m not a proponent of uncontrolled growth, there is already enough here to last a couple of decades. But, I really don’t see why we can’t do something to bring in higher wage jobs as replacements for ones that have been lost.
I always thought if I gotta work 8 hours a day, I might as well make some money while I’m doing it.
Maybe everyone here makes a living at the poker tables, cause the slots sure don’t pay that well. 🙂
smarten
Okay, so now we arguably have an economist on our blog. Since he has predicted a 50% drop in IV residential housing values over the next 4 years [at least at the $1M price point], maybe he can make a prediction on a different subject that has been discussed here? Hyper-inflation.
So with the massive increase in public debt/the monetary supply SE, where do you think long term mortgage interest rates are going to be in 4 years, and what’s your reasoning which supports this prediction?
I am going to make an assumption [which may prove wrong] that you’re going to predict something higher than today. So if you are recommending that a reader such as you/your wife should wait for 4 years to make an IV residential housing purchase, how much more is his/her debt service going to cost compared to today, assuming he/she must rely upon 80% purchase money financing?
BanteringBear
Smarten-
For somebody who appears to be of at least average intelligence, I don’t understand how you get caught up on such remedial things. Hyperinflation? Where in the world do you come up with this idea? While I would never discount inflation in the far future, perhaps even a decently high rate, hyperinflation is a preposterous notion. In such a scenario, we’d be talking about $10,000 loaves of bread and such. Were that to happen- a laughable scenario in my mind- housing prices would be irrelevant.
Furthermore, as I’ve posted time and again, it is MUCH better to purchase a house in a period of high interest rates than in a period of low rates. Why? Because as rates go up, house prices go down. Remember, housing prices are dictated by local wages, and what monthly payment those wages can afford. You seem to be under the impression that, as interest rates rise, the cost of ownership will, too, in conjunction. You’re mistaken. The difference will be made up by sellers in the way of lower prices. Also, you can always refinance the rate down the road, but you can never lower your principle. In addition, the higher the rate (hence more interest on the note), the easier it is to knock out the principle with additional payments every so often. It becomes easier to pay off the house.
Sane Economist
Interesting question Smarten.
But first a correction. I did not say IV housing would drop by 50%. I said 2 currently priced $1mill. houses would exchange hands for less than 500K in the next 4 years.
As to your question – I suspect that both mortgage rates and 10 yr yields well pretty much be where they are right now.
Why?
Becuase I believe we are entering a phase where private debt is being replaced by government debt, which by definition, makes for far greater inefficiency. That would be accross the board.
Everyday you pick up the newspaper the govt. is rolloing out some new stimulus(spending) package.
C4C, first time home owners tax deduction, you name it.
Shite, just this morning the pres announced a new stimulus for small business. Sometime this has got to end. Now I agree, this vast printing is worrisome, but, for inflation to occur, their has to be velocity, or put more simply, demand. And right now demand is moribund.
What worries me the most is the fed seems to be following the Japanese disease to the tee. Look at our zombie Banks(Citi,BAC), zombie companies(GM). These things need to be euthanised, but just like Japan did, the fed keeps them alive.
Japan is now something like in year 18 with deflation. A $500K apartment bought in 1989 in Tokyo, can now be bought for $200K. I am greatly concerned that we are heading down the same path.
Sane Economist
BB is correct Smarten.
People buy houses based upon “howmuchamonth” they can afford. The grand price is largely irrelevant.
Also, an important point which I think you are missing, is that when all is said and done,it is the buyer who ultimately sets the price(that is because they can wait longer).
Thats why these real estate shills have it all wrong. If interest rates rise, the howuchamonth” value will decrease, and inevitably so will house prices.
DownButNot Out
Sane – your exact quote was ‘But I’m willing to bet anyone that todays $1 million asking price in IV, will exchange hands at 500k sometime in the next 4 years.
Any takers?’
smarten
Thanks SE –
I asked for your prediction re: mortgage rates 4 years out, and you gave it. Thank you.
BTW, my definition of hyper-inflation is NOT that a $2 loaf of bread ends up costing $10K. If it ends up costing $20, that’s enough to qualify. But again, I guess we need to define our terms.
And as DBNO points out, your initial wager was NOT fixed to two particular $1M SFRs reselling for under $500K 4 years [as contrasted to within 4 years] from now. I guess it was my mistake to take your offer literally; sorry.
And insofar as your observation that “people buy houses based upon ‘howmuchamonth’ they can afford [the grand price (being) largely irrelevant],” that doesn’t literally equate to people’s earnings nor wages – it does equate to what they can afford. So to the extent BB or anyone else makes the literal comparison wages, IMO, he/she is wrong.
For a simple example of the principle, just look at the Bay Area. For decades [up until the last year] the homebuyers’ affordability index [based upon average wages] has been at less than 20%. Yet look at what happened to home prices.
My two cents.
CommercialLender
BB, you are spot on. Corollaries to your comments:
* house prices are going to be pressured for many years to come as most predict interest rates will by necessity generally rise in the years to come.
* prices paid by a buyer are dictated generally by the buyer’s ability to repay a loan using real wages. Inflation in the energy and govt sectors (taxes), and soon in the govt mandated health sector, translate to fewer disposable dollars for a home mortgage. This leads to decreasing prices paid for homes, or to further foreclosures of existing mortgages which then leads to decreasing price comps for homes. As BB points out repeatedly, unless and until real wages (and I add the distinction of ‘disposable incomes’) rise, inflation will be unable to occur in the housing sector in any meaningful way. Therefore, I believe you’ll pay more for loaves of bread, et.al. but less for homes going forward in the foreseeable future.
* I’ve posited my theory for a long time and no one has refuted it (please do): the reason we had home price appreciation to the degree we did in the last inflationary shock period of the late 70’s / early 80’s when rates were double-digit was due to the demographic shift of massive numbers of babyboomers starting families and needing homes, particularly starter homes. Now and in the years to come, these same boomers will be selling and downsizing particularly larger homes, putting more pressure on home prices into the foreseeable future.
A quick story on the importance of getting the best deal possible, but not necessarily the best financing to make a deal happen: Buying a car some years ago, I introduced myself as a commercial lending officer who was well versed in financial matters. This was not to brag as if my career is any loftier than a burger flipper, but rather to tell the salesman not to bother giving me the used-car slimy sales pitch of some slick financing to make a deal. No, I just want the best price on the car, period. He disappears to his obligatory ‘sales manager’ and comes back literally a new person: the slick, slimy used-car type proverbial sales guy appeared out of the nice consultative guy I’d just visited with, but I digress. He launched into “what if I could get your payment to $x/mo over Y years!!!!!”. Annoyed and insulted, I plugged his metrics into my HP 12C and hit the INT [calculate interest] button. Without even looking at the screen, I held it up to him and asked him why on earth I would sign up for such a loan? I then turned the calculator back to see the result: 12.55% in a 5.75-6.5% ‘ish’ market. Had there been this same car at any other dealer in the county, I would gladly have poured my coffee down his shirt and walked out, but instead he came back with a loan on my terms at, you guessed it, around 5.75%. I don’t even recall what I paid for the car, but I’ll never forget that 12.55% rate and that it would have added nearly $5K to the car over the term. It would have also resulted in a loan balance 5 yrs later when I sold it much, much greater than the car’s worth.
My, my. I see so many parallels in my story to the housing market we just came out of: the bad reputations so many Realtors and loan officers have earned as ‘used car salesmen’ (my sincere apologies to used car salesmen!), the subprime and I/O loans being offered in order to support ever-higher home prices, the negative amortization over time, etc. Sadly, today’s govt still acting like the slimy salesman by making accessible bad financing, and there continue to be many home buyers overpaying for homes simply because of slick financing options. No, we are not out of this mess yet, certainly not until we can educate consumers that financing should not drive a purchase decision.
BanteringBear
“So to the extent BB or anyone else makes the literal comparison wages, IMO, he/she is wrong.”
You can have that opinion, everyone is entitled to theirs, but you have offered nothing to back it up. I find it humorous that oftentimes when you are stymied by one of my posts, you resort to the “he/she” dig. You’ve known I’m a guy for years. Funny, though.
“For a simple example of the principle, just look at the Bay Area. For decades [up until the last year] the homebuyers’ affordability index [based upon average wages] has been at less than 20%. Yet look at what happened to home prices.”
Earth to Smarten: Reno is NOT the Bay Area. Reno is NOT New York City. Reno is Reno. Apples to oranges my friend. I’ve had to correct you time and again on this, and I would have thought you’d have learned. But, alas, you’re just stubborn. It’s also clear that you don’t like to hear that you may have overpaid by more than a half million for your IV house (a different market than Reno, too), so you grasp, and you grasp, and you grasp.
bob c
japanese style asset deflation or surging
inflation caused by massive defecits/balance of
trade (twins towers of debt)
what was japan’s budget like during that era to
compare their situation to ours? or other items
to compare japan 1987-2007 to usa now?
i’m trying to figure out how similar or not japan is to usa’s—-any input will be appreciated
Sane Economist
Bob c,
Japans crisis began in 1989. At that time their debt to GDP ratio was 50%. Currently they are at 178%.
In the last year we have gone from 14 to 41%. This is what I worry about.
Bottom line is, just like Japan, I don’t think we will have inflation until we “take our medicine”.
Meaning letting these zombie companies go bust. Or put another way, returning to the free market system. Of course that will likely push unemployment to the 20% level, and I don’t think ther’s much political will to do that.
So we find ourselves between a rock and a hard place.
Which leads me to ask people like Raging Bull, how exactly do housing prices go up in this sort of environment?
inclinejj
MLS #937526 – 886 Rosewood Circle listed at $990K
MLS #938558 – 809 Rosewood Circle listed at $995K
MLS #938557 – 826 Rosewood Circle listed at $995K
MLS #938556 – 832 Rosewood Circle listed at $995K
MLS #938409 – 869 Rosewood Circle listed at an even $1M
This project would have been long gone via foreclosure if it wasn’t for a very “deep pocket” investor.
73 NOD’s in Washoe County on a single day last week and only one recorded NOD on a condo in IV.
inclinejj
I forgot to mention..On of the Incline Creek Estates(Rosewood)foreclosed went back to the foreclosing lender and just resold for $970,000.
smarten
BB, when I referred to “he/she,” I wasn’t speaking only to you [didn’t I say “BB or anyone else?”]. So no added offense was intended to you by my he/she reference. Believe me, when I’m responding directly to you, I won’t hide it!
And BB, thanks for allowing me to have my own opinion.
And nothing you’ve said changes it. For purposes of my point, it doesn’t matter that Reno/Sparks is a different housing market than the Bay Area [or New York for that matter]. People are by and large going to pay what they can afford to pay wherever they choose to live. If they can afford to pay all cash and that is their choice, they will [regardless of what their earnings, if any, may total]. If they sold several years ago and are sitting on a boat load of cash, they probably can afford to pay more for a home than what the average wage earner can afford. So when you make the generic assertion that the housing market won’t turn around until prices are in line with the mortgage cost the average local wage earner can afford to pay, I must disagree with you and I have.
And that was my point about the Bay Area. For decades the average Bay Area wage earner hasn’t been able to afford the mortgage necessary to purchase an average priced home. Yet that hasn’t stopped sales, nor the increase in pricing [and this metric goes farther back than the proliferation of exotic mortgages]. Aren’t these “facts” which back up my statements? If so, then I believe I am entitled to assert the same concept applies everywhere, including Reno/Sparks. We can already see from this blog there are a lot of would be buyers who are sitting on the sidelines as renters, for whatever the reasons. Many can “afford” to pay more than the median sales price, yet won’t. But that doesn’t mean housing prices must drop further because these would be buyers can’t afford to pay today’s prices.
And insofar as my overpaying by $500K, you’re mistaken my friend. IV is not Reno/Sparks [do I have to keep reminding you?]. Nor can you make blanket price comparisons to IV SFRs like you can to cookie cutter housing in Somersett, Damonate Ranch, Spanish Springs, etc. [didn’t I just demonstrate this point with SE?].
It has been almost four months now since our purchase. Three weeks ago the custom house next store to ours consisting of less square footage and lower end construction/amenities sold for some $80K more than our purchase price. Although I am the first to admit that the fat lady has certainly not yet sung, so far, I’ve neither had to nor am I “grasping” for anything [sorry to burst your bubble]. Of course when you have no skin in the game, it’s easy to say and hear whatever you want to say and hear; isn’t it?
John Rusin
Bear and Move to Reno- I never bought the whole “people are friendlier here” argument. People are the same everywhere…if you’re friendly you’ll get it back in return.
Willk- Surprise! we have dirty diapers on the street and bums here too.
Move to Reno- It is a fallacy that the nuke dump would have brought billions in $$$…I don’t recall Pres. Bush offering any such money when he tried to force it on the state.
Skeptical- Nevada’s more completely FUBAR than California. Our deficits are close to their per capita, but they have a more diversified, high income industry that isn’t dependent on tourism, the first to fall in a recession. They also have most of the nation’s finest shools and colleges in the nation. Inability to govern? We’re close to that. And OUR taxes will go up too.
Sully’s right…it’s build it and they will come. We need to beef up education here and remake ourselves as a high-tech (no longer dependent on nickel slots and big box stores) and build the workforce Dirtbagger found lacking here.
Why are our local politicians giving STAR bonds to almost-minimum-wage businesses???
John Newell
The “nuke dump” issue is not as clear as Mr. Rusin indicates. Indeed, had the feds “forced” the dump on Nevada, the positive impact on Nevada’s economy likely would have been relatively minor. However, had Nevada agreed to the dump, concessions (pecuniary and otherwise) from the federal government would have been included in the terms of the deal. Nevada’s shortsighted politicians fought the dump without valid reason, using fear mongering to make sure the populace followed like sheep.
Of course, the repository is not a dead issue yet. Even though the administration has announced that Yucca Mountain is no longer the designated repository site, Congress has not changed the relevant law, and perhaps even more telling, the House included funding for the Yucca Mountain repository in the 2010 budget.
If Reid loses in 2010, I for one will not be surprised if the administration moves forward with the Yucca Mountain project with or without the state’s approval. I believe we should make a deal now to make sure Nevada has some oversight of and gains some benefit from the repository.
BanteringBear
Smarten-
You’re coming across as a completely illogical bonehead. I would have expected more from you, but I think you’re a hopeless case, desperate to justify your recent purchase.
You say:
“If they sold several years ago and are sitting on a boat load of cash, they probably can afford to pay more for a home than what the average wage earner can afford. So when you make the generic assertion that the housing market won’t turn around until prices are in line with the mortgage cost the average local wage earner can afford to pay, I must disagree with you and I have.”
These people you speak of are statistical outliers. They do not carry a market, especially one the size of the greater Reno/Sparks area. If you look at the historical pricing in the area, pre-bubble, it has ALWAYS been supported by median incomes. If I’m to understand your diatribe correctly- you’re preaching the “new paradigm” that the Realtor shills were vomiting forth during the frenzy. Absolutely unbelievable. This is nothing more than the “rich Californian theory” Reno Ignoramus put to rest long, long ago. It seems that you’ve just turned into a complete shill. Are you a Realtor, now? Seriously.
Further:
“And that was my point about the Bay Area. For decades the average Bay Area wage earner hasn’t been able to afford the mortgage necessary to purchase an average priced home. Yet that hasn’t stopped sales, nor the increase in pricing [and this metric goes farther back than the proliferation of exotic mortgages]. Aren’t these “facts” which back up my statements?”
Smarten- this is NOT the Bay Area. Are you that dense? Just as I wouldn’t compare Modesto to SF, or Reno to Tahoe (I have NEVER compared the two, and you can research my posts where I have gone on record to say that they are two different animals), you cannot compare the Reno/Sparks to the Bay Area. You’ve got “Bay Area” on the brain. You’re not there anymore Smarten. You’re in a second home market which is on the rocks. You called the bottom, and you bought something. Great. Enjoy it. But quit the horsesh!t.
Lastly, the money quote was:
“…I believe I am entitled to assert the same concept applies everywhere, including Reno/Sparks”
Then:
“IV is not Reno/Sparks [do I have to keep reminding you?].”
You lost all credibility with me after that nonsense, Smarten. You’re nothing more than Derrick with an editor.
John Rusin
“had Nevada agreed to the dump, concessions (pecuniary and otherwise) from the federal government would have been included in the terms of the deal.”
Really….where did you get this information??
BanteringBear
John Rusin wrote:
“Sully’s right…it’s build it and they will come. We need to beef up education here and remake ourselves as a high-tech (no longer dependent on nickel slots and big box stores) and build the workforce Dirtbagger found lacking here.”
Plenty of smart people born and bred in Reno. They leave because the jobs just aren’t here. The low wage jobs draw people from other areas. Take a look at the casino and warehouse workers and the majority of them are out of staters. The educated locals either take over mom and dads business, start their own, manage to wrangle a decent paying job in Reno (of the few that exist), or head out for greener pastures.
John Newell
From a contact in the NDEP who, unfortunately, is now retired.
Sully
BB; back in the “early days” San Jose was the same way. People wanting to leave the “cow town” for greener pastures. WWII brought many to Santa Clara County via Moffet Field. Many returned to retire in the “valley of hearts delight”.
Amongst them were some very smart people, Lockheed Space and Missiles Division, NASA etc.
It took a few decades, but it went from a cow town to the tenth largest city in the nation.
I don’t want that here, but look what happens when you take your head out of the sand and get off your heinie. 🙂
Move to Reno
My opinion is that Nevada could have bargained for a “temporary” nuclear depository at Yucca Mountain. that was limited solely to “dry cask” storage. Perfectly safe both in transit and storage. Set it up as a long-term lease deal, say 500 years, with lease payments starting at $1 billion per year with COLA provisions.
I only mention it because it would be a real estate transaction.
John Newell
Interesting idea, Move to Reno, but as Yucca Mountain is federal property, the state could not “lease” it to the federal government. The federal government was able to proceed with the project without state approval because it owns the proposed site (although commerce clause powers are also implicated).
The concessions, as I understand it, would have involved federal funds for infrastructural improvements (roads, rail, hazmat response teams, etc.), funds for NDEP oversight of transportation of waste materials in the state, and regulatory concessions regarding environmental standards, superfund sites, etc.
Move to Reno
Agreed except this is a political issue. Why is the federal govt getting involved with radioactive waste that is own by private utilities?
The bottom line is that there are probably equally good sites as Yucca Mountain in at least 10 other States. Nevada was selected because of its history as an A-bomb testing place and its political weight at the time.
If the utilities want to dump their nuclear waste in Nevada they should pay for it.
.
GratefulD_420
To John Rusin… This is common business sense… the rest of the States with Nuclear Power need Yucca to work… we should get paid.
I am a degreed ChE, and many would call me a tree hugger. I strongly believe in Yucca as an Intermediate (<120 yr) storage area until we learn how to re-process.
I also believe in John Newell’s case, that we should leverage this great environmental and business need to the advantage of current permanent residence. We can offer it to them for… cash for K1 – K12 education,,, pay our taxes… so we can cut high tech business taxes… luring the highend CA evacuees.
At first I thought this may not fit the RRB topic line, however the more I think about it… the more important now than ever for NV and the country. We could use the additional tax income to offset those for high-tech, high-paying business tax incentives…. and the US could then build more clean Nuclear Energy… helping contruction in the near term… and creating a new industry that lessens our foreign oil dependence and creates a truly sustainable industry growth in a core business segment.