Wow! The rush to take advantage of the first-time homebuyer’s credit is in its final stretch. 539 houses were sold during the month of October. We haven’t seen unit sales that high since June.
The median sales price continues to hold at $180,000. Although an 3.2% drop from last month’s median, October’s median price is still above May’s low for the year of $175,000. October is now the fifth consecutive month of median sales price at or above $180,000. Additionally, the median sold price-per-square-foot also seems to have stabilized – bouncing around the $103/sq.ft. mark.
November will be interesting to watch. Early indicators are predicting unit sales that will surpass even October’s. The big question is what will happen after that. With the first-time homebuyer’s credit almost certain of being extended through April 30, 2010, as well as being expanded to also include certain repeat buyers, the buying spree will most likely continue for the remainder of the year and throughout next spring. Sure, we’ll see some seasonal weakening through the holidays, but unit sales should remain higher year-over-year.
The real question is what will happen once the tax credit is no longer available (during the 2nd-half of 2010). With the stimulus gone, to what degree will sales be impacted? Will units sold revert back to 2008 levels? …2007 levels? And what of prices? Will we see the median affected, and if so, how? With first-time homebuyers taken out of the equation, perhaps the only sales happening will be at relatively higher price points; thereby raising the median price. Or perhaps inventory levels will rise again, ultimately depressing prices.
Much remains to be seen.
The make-up of October’s sales is as follows:
- Bank-owned properties – 39%
- Short sales – 25%
- Equity sales – 35%
For those readers who prefer the median sold price for houses and condos combined, October’s combined median sold price was $169,900; down from September’s combined median of $175,000.
| Month Year | #Sold | Sold Price | Sold Price per SqFt | Average DOM |
| Oct 2009 | 539 | $180,000 | $103.52 | 123 |
| Sep 2009 | 517 | $186,000 | $103.32 | 128 |
| Aug2009 | 479 | $179,900 | $102.77 | 116 |
| Jul2009 | 515 | $180,000 | $103.45 | 126 |
| Jun2009 | 536 | $180,317 | $104.09 | 136 |
| May2009 | 425 | $175,000 | $102.31 | 139 |
| Apr2009 | 429 | $190,000 | $105.71 | 133 |
| Mar2009 | 369 | $200,000 | $105.85 | 133 |
| Feb 2009 | 293 | $205,000 | $111.52 | 132 |
| Jan 2009 | 233 | $200,000 | $113.04 | 117 |
| Dec 2008 | 294 | $218,950 | $121.74 | 145 |
| Nov 2008 | 269 | $220,000 | $122.24 | 152 |
| Oct 2008 | 354 | $230,000 | $131.43 | 144 |
| Sep 2008 | 358 | $239,250 | $136.72 | 145 |
| Aug 2008 | 321 | $250,000 | $142.14 | 140 |
| Jul 2008 | 397 | $251,000 | $145.48 | 139 |
| Jun 2008 | 369 | $262,500 | $148.05 | 142 |
| May 2008 | 314 | $260,215 | $152.30 | 134 |
| Apr 2008 | 314 | $275,000 | $154.05 | 172 |
| Mar 2008 | 238 | $274,000 | $150.93 | 166 |
| Feb 2008 | 195 | $289,000 | $156.48 | 149 |
| Jan 2008 | 165 | $285,000 | $170.23 | 146 |
| Dec2007 | 228 | $283,950 | $167.22 | 143 |
| Nov2007 | 204 | $299,750 | $172.24 | 126 |
| Oct2007 | 241 | $296,000 | $173.55 | 116 |
| Sep2007 | 230 | $299,945 | $179.46 | 114 |
| Aug2007 | 311 | $305,000 | $182.49 | 118 |
| Jul2007 | 300 | $315,000 | $189.78 | 113 |
| Jun2007 | 329 | $320,000 | $196.78 | 104 |
| May2007 | 364 | $313,200 | $190.81 | 107 |
| Apr2007 | 320 | $309,500 | $193.93 | 121 |
| Mar2007 | 324 | $315,000 | $189.61 | 121 |
| Feb 2007 | 269 | $315,000 | $191.18 | 126 |
| Jan 2007 | 245 | $312,900 | $199.79 | 133 |
| Dec2006 | 291 | $309,000 | $193.51 | 114 |
| Nov2006 | 281 | $318,000 | $197.32 | 111 |
| Oct 2006 | 363 | $312,400 | $201.44 | 105 |
| Sep2006 | 344 | $314,950 | $198.08 | 98 |
| Aug2006 | 349 | $325,000 | $210.92 | 94 |
| Jul2006 | 373 | $335,000 | $210.62 | 93 |
| Jun2006 | 424 | $339,000 | $214.54 | 91 |
| May2006 | 374 | $339,950 | $219.05 | 99 |
| Apr2006 | 368 | $334,600 | $212.08 | 88 |
| Mar2006 | 387 | $340,000 | $215.54 | 99 |
| Feb 2006 | 283 | $335,000 | $217.29 | 101 |
| Jan 2006 | 274 | $365,000 | $216.38 | 98 |
| Dec2005 | 333 | $355,000 | $217.31 | 89 |
| Nov2005 | 385 | $349,000 | $220.00 | 81 |
| Oct2005 | 484 | $359,450 | $223.06 | 77 |
| Sep2005 | 531 | $354,500 | $219.26 | 77 |
| Aug2005 | 582 | $360,500 | $220.52 | 73 |
| Jul2005 | 608 | $353,000 | $218.99 | 71 |
| Jun2005 | 679 | $350,000 | $215.69 | 69 |
| May2005 | 644 | $333,250 | $209.95 | 68 |
| Apr2005 | 558 | $326,750 | $207.57 | 77 |
| Mar2005 | 584 | $325,000 | $200.17 | 81 |
| Feb 2005 | 342 | $318,500 | $197.54 | 88 |
| Jan 2005 | 341 | $310,000 | $195.19 | 85 |
| Dec2004 | 450 | $312,500 | $190.72 | 77 |
| Nov2004 | 448 | $309,950 | $191.62 | 63 |
| Oct2004 | 512 | $299,250 | $188.72 | 53 |
| Sep2004 | 496 | $292,750 | $185.78 | 61 |
| Aug2004 | 505 | $285,000 | $182.95 | 56 |
| Jul2004 | 544 | $304,300 | $179.28 | 61 |
| Jun2004 | 533 | $285,000 | $172.16 | 65 |
| May2004 | 476 | $278,750 | $169.64 | 65 |
| Apr2004 | 526 | $259,950 | $158.08 | 67 |
| Mar2004 | 508 | $245,000 | $142.56 | 71 |
| Feb 2004 | 365 | $237,000 | unavailable | 81 |
| Jan 2004 | 379 | $229,000 | unavailable | 78 |
| Dec2003 | 441 | $240,000 | unavailable | 82 |
| Nov2003 | 444 | $220,750 | unavailable | 78 |
| Oct2003 | 430 | $219,880 | unavailable | 76 |
| Sep2003 | 587 | $223,000 | unavailable | 71 |
| Aug2003 | 512 | $220,000 | unavailable | 75 |
| Jul2003 | 533 | $210,000 | unavailable | 77 |
| Jun2003 | 475 | $207,000 | unavailable | 77 |
| May2003 | 450 | $198,950 | unavailable | 85 |
| Apr2003 | 478 | $197,750 | unavailable | 82 |
| Mar 2003 | 428 | $192,000 | unavailable | 77 |
| Feb 2003 | 321 | $186,895 | unavailable | 79 |
| Jan 2003 | 316 | $186,000 | unavailable | 96 |
| Dec2002 | 379 | $193,500 | unavailable | 93 |
| Nov2002 | 423 | $190,000 | unavailable | 82 |
| Oct2002 | 483 | $189,900 | unavailable | 83 |
| Sep2002 | 410 | $174,000 | unavailable | 85 |
| Aug2002 | 459 | $180,000 | unavailable | 74 |
| Jul2002 | 469 | $176,000 | unavailable | 83 |
| Jun2002 | 445 | $185,000 | unavailable | 80 |
| May2002 | 470 | $178,450 | unavailable | 77 |
| Apr2002 | 360 | $169,500 | unavailable | 93 |
| Mar 2002 | 377 | $169,000 | unavailable | 84 |
| Feb 2002 | 323 | $170,900 | unavailable | 89 |
| Jan 2002 | 268 | $172,475 | unavailable | 99 |
| Dec2001 | 287 | $182,000 | unavailable | 86 |
| Nov2001 | 323 | $161,500 | unavailable | 85 |
| Oct2001 | 357 | $166,500 | unavailable | 79 |
| Sep2001 | 355 | $168,000 | unavailable | 81 |
| Aug2001 | 448 | $160,350 | unavailable | 84 |
| Jul2001 | 433 | $169,900 | unavailable | 90 |
| Jun2001 | 426 | $166,225 | unavailable | 96 |
| May2001 | 404 | $162,050 | unavailable | 97 |
| Apr2001 | 370 | $158,750 | unavailable | 94 |
| Mar 2001 | 385 | $159,900 | unavailable | 97 |
| Feb 2001 | 294 | $159,950 | unavailable | 103 |
| Jan 2001 | 264 | $165,000 | unavailable | 102 |
| Dec2000 | 272 | $156,500 | unavailable | 100 |
| Nov2000 | 355 | $154,500 | unavailable | 93 |
| Oct 2000 | 348 | $153,000 | unavailable | 98 |
| Sep2000 | 356 | $160,000 | unavailable | 104 |
| Aug2000 | 412 | $163,375 | unavailable | 94 |
| Jul2000 | 368 | $155,000 | unavailable | 110 |
| Jun2000 | 466 | $165,845 | unavailable | 104 |
| May2000 | 363 | $158,000 | unavailable | 105 |
| Apr2000 | 312 | $155,000 | unavailable | 113 |
| Mar 2000 | 339 | $162,700 | unavailable | 102 |
| Feb 2000 | 244 | $149,620 | unavailable | 110 |
| Jan 2000 | 217 | $156,000 | unavailable | 112 |
| Dec 1999 | 264 | $155,000 | unavailable | 118 |
| Nov 1999 | 293 | $149,900 | unavailable | 98 |
| Oct 1999 | 289 | $147,895 | unavailable | 108 |
| Sep 1999 | 311 | $157,000 | unavailable | 106 |
| Aug 1999 | 360 | $148,500 | unavailable | 112 |
| Jul 1999 | 375 | $147,800 | unavailable | 105 |
| Jun1999 | 372 | $150,000 | unavailable | 103 |
| May 1999 | 307 | $145,500 | unavailable | 106 |
| Apr1999 | 324 | $151,700 | unavailable | 111 |
| Mar 1999 | 308 | $151,000 | unavailable | 121 |
| Feb1999 | 249 | $148,900 | unavailable | 120 |
| Jan 1999 | 210 | $143,000 | unavailable | 115 |
| Dec 1998 | 265 | $140,000 | unavailable | 118 |
| Nov 1998 | 279 | $153,000 | unavailable | 126 |
| Oct1998 | 286 | $142,825 | unavailable | 115 |
| Sep 1998 | 279 | $144,500 | unavailable | 102 |
| Aug 1998 | 331 | $145,000 | unavailable | 113 |
| Jul 1998 | 335 | $150,000 | unavailable | 108 |
| Jun 1998 | 351 | $148,500 | unavailable | 103 |
| May 1998 | 302 | $145,500 | unavailable | 99 |
| Apr 1998 | 235 | $149,000 | unavailable | 111 |
| Mar 1998 | 267 | $142,500 | unavailable | 114 |
| Feb 1998 | 201 | $139,900 | unavailable | 126 |
| Jan 1998 | 165 | $149,490 | unavailable | 131 |
Note: The medians table above is updated on a monthly basis. The median home price data reported covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. Residential data includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – November 2009.
FutureRenoHomebuyer
So, the homebuyer tax credit has extended the traditional buying season probably through November. The open question: is this another “cash for clunkers?”
In other words, is buying focused primarily on the low end? Declining median sales price suggests that may be the case. Also, have future sales been siphoned off so that buyers can take the easy $8k?
If these two things are happening, it’s not necessarily long term bullish for Reno. But you gotta start somewhere.
All of the above stated — you must look at the scoreboard. What cannot be argued is that the “new normal” is sales >500 during the selling season. This data has to be considered good news, at least for those at the lower end.
Is there any info on specific price bands? That would really give dimension to the stats. Thanks to Guy for the data, and the insightful commentary.
Riley
Thanks to government intervention in the form of the tax credit, and 3.5% down FHA loans, the market is holding on. Take away the government prop ups, and the market is anemic. And, even with all the government juice, one half of all houses and condos sold for less than $169,900.
And the Trustees Deeds recordings are picking up steam.
smarten
Guy,
I think you’re pinning too much of the residential real estate “recovery” on the first time homebuyers’ income tax credit. Unless you have a means of confirming that a particular sale is or is not to a first time homebuyer, you’re speculating as to the credit’s effect [could it just be that there are actually some good buys out there?].
Additionally, we have no means of determining how many “first time homebuyers” would have eventually purchased in any event, either with or without the tax credit. It’s kind of like the criticism of the cash for clunkers program – according to naysayers, all it did was push 4th quarter sales into the 3rd quarter. Maybe that’s by and large what the first time homebuyers’ tax credit has accomplished?
Thus I think you’re going too far when you state “the real question is what will happen once the tax credit is no longer available (during the 2nd-half of 2010) [i.e.], with the stimulus gone, to what degree will sales be impacted?” I can conceive of a whole series of other questions which need to be answered in the second half of next year having nothing to do with the tax credit [such as: long term mortgage rates; revisions, if any, to the FNMA/Freddie Mac/FHA conforming loan amount maximum; accessibility to reasonably priced jumbo mortgages; secured property tax reductions that have apparently been taking place; the effect of mortgage interest deductions on increased federal income tax rates [should Obama go back on his word]; etc.].
I think that what we can say from your data is that at least in the short term, it appears we’ve reached some sort of a Reno/Sparks residential housing market “floor.” And I think that what you’re predicting is that for the next 6 or more months, we’re either going to by and large skirt along this floor, or actually begin some sort of march upwards.
And FWIW, I don’t take much stock in comments from posters who tend to discount the data because it wouldn’t be what it is were it not for “unatural” intervention by the Feds. These posters need to understand there in essence wouldn’t be ANY residential real estate sales market were it not for intervention by the Feds. EVERY sale that depends upon purchase money financing [or access to a HELOC for part/all of a property’s purchase price] is directly affected by the Fed’s intervention [FHA, FNMA, Freddie Mac, etc. mortgages].
Phil
The real problem is employment and the ability to afford the homes here. Low interest rates has got to be one of the major reasons for some of the movement now as well. The feds are going to be under increasing pressure to raise rates as the problem of the increased money supply and inflation start being a problem.
The whole situation we find ourselves in is a market with way too much interference. How much longer can the federal government prop this house of cards up?
I hate to say it but I only see doom and gloom for the housing market.
Now if jobs where to increase and we start seeing some wage inflation I could see recovery happening. But you cannot keep increasing the payroll tax in NV to make up for budget issues. We need to be attracting employers, and filling the home here.
Guy Johnson
FutureRenoHomebuyer,
Here is the price banding you requested. Percentages represent proportion of October’s unit sales (stickbuilt only; condos excluded).
>=$100,000: 11.9%
>=$150,000: 35.4%
>=$200,000: 59.6%
>=$250,000: 75.9%
>=$300,000: 85.5%
>=$350,000: 89.6%
>=$400,000: 92.6%
>=$500,000: 95.4%
>=$600,000: 97.4%
E. Edward
The percentage of foreclosure/NODS is much higher than this time last year??…Who and how is hip shooting predictions of November and coming months??…
I would think the extension of home buyers credit may damper some of the hype for now?… Since this is complete evidence to just how bad how bad the market condition really is and that there is no reason to rush-in now?
{Besides one just know the fed is just going to extend again come late spring}…
OK, Enough of the above worth-less non since/info. Lets do some real comparisons for a real indicator/prediction…
Lets compare: {Year to date} all of the sold homes vs the NODS/Forclosures….
Then lets compare: the actual bank held properties with the actual percentage of {potential} foreclosure buyers
Finally lets compare: percentage of home buyers vs. the true percentage ever rising unemployed..
Then throw in the all the coming mortgage resets and a realistic {guesstimation} of shadow inventory…
I would think this would give some kind of prediction??..
There’s no spin here?…
skeptical
E. Edward,
Some friendly advice:
-First, go to grammar school.
-Next, proofread what you write.
-Lastly, instead of directing the masses out there to do your bidding, why don’t you do the research your demanding and actually contribute to the blog?
Sully
Anyone interested in the earthquake swarms last year in the Somersett area national geographic has a program about it. It airs:
tonight at 7 pm and 10 pm
sunday (8) at 7 am
thursday (12)at 3 pm
sunday (15) at 11 pm
Guy Johnson
smarten,
Your points are well-taken. Correct, I do not have a means of confirming that a particular sale is or is not to a first-time homebuyer. So, I suppose I am speculating, albeit for the anecdotal observations made within my office and my personal business.
But more food (data) for thought to add to the discussion:
For the last three months (August – October) there have been 1,540 residential sales in Reno – Sparks [MLS area 100; site/stick built only]
For comparison, I looked at the same time period going back to 2000. Here is what I found…
2009: 1,540 sales
2008: 1,033 sales
2007: 782 sales
2006: 1,056 sales
2005: 1,597 sales
2004: 1,605 sales
2003: 1,541 sales
2002: 1,371 sales
2001: 1,165 sales
2000: 1,127 sales
Probably different ways to interpret these numbers, but there’s no denying there’s been a dramatic increase in unit sales recently. A nearly 50% increase over 2008 sales; and a 97% increase over 2007 unit sales, for the same period. In fact, current unit sales have now returned to bubble peak levels.
Again, you can probably raise the same points as you did in your last comment, but I believe the increase in unit sales is being driven largely by the first-time homebuyer’s tax credit.
During the bubble years, increasing unit sales was driven by rising home values (spurring homeowners to cash in) and “voodoo” loans (as they’re frequently referred to on the blog). In the absence of these drivers, what is driving the phenomenal increase in unit sales today?
Btw, I am by no means discounting the case that there are actually some good buys out there.
Martin
So of the 539 houses that sold, 10 of them were for more than $600K.
Of the 539, 27 were for more than $500K.
Of the 539, 43 were for more than $400K.
Of the 539, 323 were for $200K or less.
All this October data shows is that as the number of houses sold is increasing, the number of low end houses sold is increasing.
Nothing here suggests that the over $300K market segment is getting any better at all.
For months on end now, the Reno market has been an under $250K market, (more than 75% of all sales are for under $250K)and nothing in these October numbers indicates that is in any way changing.
E. Edward
Skeptic Realtor,
Truly sorry to cast a negative Shadow over ones livelihood, I’m just compelled to point-out the obvious….
I know its tough out there and most likely will get a lot tougher…
Walter
I agree with Martin. I used to think that $400K was the demarcation line between the so-called upper end and the so-called lower end. But now I think it is $300K that is the demarcation line. With 85% of all houses selling under $300K, there is not much of market over $300K.
I understand why Guy and his fellow realtors like to hype the increasing number of sales, but the reality is that these increased sales are not translating into increased values.
But thanks to Guy for being willing to give us the price band info which in many ways is far more insightful than just the units sold data.
BanteringBear
A lot of cherry picking of data going on here. While it’s true sales have really picked up, I don’t see many mentioning the fact that prices are still at their lows since the peak, and DOM is very high as compared to the go-go years. It’s obvious that the tax credit really kicked sales into high gear (speculators), but the article I linked a few weeks back shone a light into the warped world of “qualified buyer”.
This thing’s far from over. They’re still minting mass future foreclosures. With unemployment still increasing, I see absolutely no indication of a recovery in housing. Housing does not lead an economic recovery, it follows it. Next year, we’ll be reading sob stories of individuals who purchased houses with tax “credits” used as down payments, and are in foreclosure because they ‘didn’t understand’ that they couldn’t afford the house. The practice of shoehorning every living, breathing person into a mortgage loan will not end well.
RB
“The practice of shoehorning every living, breathing person into a mortgage loan will not end well.”
Where do you come up with this pessimistic nonsense? People CHOOSE to buy homes, they are not shoehorned or forced to do anything.
Irv
“…do the research your demanding…”
This is excerpted from the post of the chap who rebukes another on this blog: “go to grammar school’ and “proof-read what you write.”
For his info:
you’re = `you are,’ as in research what you are demanding.
your = possessive pro-noun expression; what message? Your message, as in “your message shows that you are not practicing what you are preaching.”
Moral: people who can’t spell any better than the average sixth grader shouldn’t criticize other posters for grammar and spelling errors.
SmartMoney
Anyone who buys a house now under $300K is most likely not going to default. Why? They can turn around and rent the house out for a similar amount as their mortgage payment. So yes, the under $300k market is nearing a bottom, with perhaps a little more to go.
skeptical
pronoun isn’t hyphenated.
FutureRenoHomebuyer
I count over 150 price reductions since 30 Oct. Seems like it’s still a buyer’s market to me. Either that, or sellers are still drinking kool aid and thinking that THEIR house is exempt from the 50% reductions going on everywhere else in Reno.
DownButNotOut
‘Anyone who buys a house now under $300K is most likely not going to default. Why? They can turn around and rent the house out for a similar amount as their mortgage payment’
Sorry, Smarten, I can’t agree with this statement.It assumes rents stay the same as well as a level of sophistication that isn’t there with low end house buyers (in general).It doesn’t even take into account if house values go down further. If you can’t make payments on your house because you were ‘shoehorned’ into in the first place and have lost your job or just messed up your finances, it’s unlikely you’d have the where-withal to rent it and then go on to rent another house yourself.
And by shoehorned ( I know I stole it)I mean First Time buyers credit and low down payment loans.Anyone would have to admit your cutting things pretty close if an $8,000 credit is the only reason your able to by now. After all, that just makes your house worth what you bought it for if you need to sell it, less commission.
smarten
DBNO, smarten DIDN’T make the statement to which you attribute to him. SmartMoney did [unless you think the two are one in the same (Derrick?)].
But I like the way you think…
DownButNotOut
Sorry about that. I see the error of my ways 🙂
SmartMoney
Ha ha, I assure you I am not Derrick. But the point is that there are houses out there now that you can buy that cash flow. Unlike in 2005 where rent was half the mortgage payment. Because of the cash flow, the chances of default are lower, but certainly there will still be some.
MikeZ
Hi Smart, as a former landlord, I would be very leery of any “this will cash flow” claims.
Such analyses tend to assume optimistic occupancy rates, rents, taxes and repair costs. Speaking from experience, one bad tenant can wipe out years of cash flow. YEARS.
In the last month alone, 2 different people have explained to me how a particular property will cash flow as rental from “day one.” Yet none of them are willing to buy themselves or even split the purchase with me,
I wonder why. I guess they don’t want a guaranteed cash flow?