The following housing market metrics are for Reno and Sparks, Nevada for 2009 – the year as a whole. I’ve also contrasted them to 2008’s numbers.
Units Sold
5,184 houses were sold during 2009. This total represented a 44 percent increase over the 3,590 houses sold in 2008.
Total Sales Volume
Those 5,184 home sales generated $1,157,282,719 in volume. This sum was five percent greater than 2008’s total sales volume of $1,101,878,851.
So how does a 44 percent increase in the number of homes sold in 2009 generate only a 5 percent increase in total sales revenue over 2008’s? The answer lies in…
Median Sold Price
2009’s median sold price was $185,000 for the year. This number represented a 29 percent decline from 2008’s median sold price of $250,000.
Similar declines were seen also in the…
Median Sold Price per Square Foot
2009’s median sold price per square foot of $104.36 was off 27 percent from 2008’s $143.36 per square foot.
Days on Market
Homes sold slightly quicker in 2009 with the median days on market at 95 days compared to 2008’s median days on market of 100 days.
Price Banding
2009 saw a dramatic shift in the sales price bands. Ten percent of the sales in 2009 occurred below $100,000. Half the sales occurred at less than $185,000. And three-quarters of the sales occurred at less than $250,000.
| houses sold for | 2008 | 2009 |
| <= $100,000 | 1.2% | 10.1% |
| <= $150,000 | 6.8% | 32.9% |
| <= $200,000 | 25.6% | 57.3% |
| <= $250,000 | 50.4% | 74.6% |
| <= $300,000 | 67.7% | 84.1% |
| <= $400,000 | 85.4% | 92.1% |
| <= $500,000 | 91.3% | 95.1% |
Distressed Properties
2009 was also a year dominated by distressed properties – accounting for over 70 percent of 2009 sales. Compare this to 2008 where distressed properties accounted for only half of all sales.
| type of sale | 2008 | 2009 |
| bank-owned | 39.5% | 49.0% |
| short sale | 10.3% | 21.5% |
| non-distressed | 50.2% | 29.5% |
Note: The residential data reported above covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. 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 – January 2010.
FutureRenoHomebuyer
Interesting development observed this morning. I have a regular search I perform on Trulia, where I look up all recently price reductions by date. Price reductions in Reno have been averaging about 10 per day.
Well, this morning, I note about 15 properties, all by Keller Williams that have price INCREASES. These increases range from 3% to 10+%. All are pretty low priced.
http://www.trulia.com/NV/Reno/#for_sale/Reno,NV/reduceddt;d_sort/
So, what gives? Is this a poor attempt by Keller Williams to give the impression that the market is moving up? Smacks to me of a marketing ploy.
Would be interested to hear the take of any out there on some of these properties. They are almost all lower end (<$200k), with many price reductions, and have been listed for several months.
billddrummer
Happy New Year, Guy!
Thanks for the data.
I’m working on a project to correlate home prices here with those in the Sacramento region. Do you know of any sources in the Sacramento area that provide the kind of no-spin info we get here from RRB?
I’m sick of reading the Kool-aid Kooks that are crowing about “housing making a comeback!” and “NOW is the time to buy!” and “Don’t worry-the government will keep rates LOW LOW LOW Forever!!!”
Any help would be welcome.
Thanks, and great job maintaining this source last year!!!!
CommercialLender
Happy New Year, all. Loved the Derrick thrashing, BTW.
FRH, I saw you were reconsidering a reloc to Reno to other areas instead, including DC. Given your line of work (withheld), not a bad choice. I grew up in DC area, if you want any thoughts there, go on my personal email.
Smarten and IJJ, I spent some time in IV over the holidays. Simply amazed at the sheer number of condos and homes now listed for $500K and under. For that matter, there are a number of sub$300K condos. Second homes are within reach of bay area folks again, no? I never thought I’d see $150-$195 psf in IV.
smarten
Hey CL, you should have e-mailed me before your visit. We could have met for coffee!
If you’re looking for a POS $300K IV condo or a POS $500K SFR, there’s quite a selection. But if you want something nicer, you’re still going to have to pay a lot more. Remember that when I made my purchase I posited that I knew everything currently out there for sale; I knew the NODs in process; and that for me, I couldn’t see anything I’d be interested in purchasing materializing within my price range for at least the next six months. Well six months later, but for the Tiller property we’ve discussed here on the blog [which Page Ventures purchased for a little under $900K at trustee’s sale and sold in late August for $1.33M]; and the house next store which sold in October for $80K more than we paid; I have been proven correct.
I don’t have all the stats at my finger tips but similar to Reno, the number of 2009 IV sales are actually higher than 2008. Also similar to Reno [and as you have observed] the average PSF is down. The median sales price is down as well, but only by about 15% compared to 2008. But the number of listings is down by a little over 20%. This tells me that rather than lowering their asking prices, quite a few IV sellers have chosen to simply take their properties off the market. Now will they reappear come spring time? I kind of doubt it unless prices start increasing [which as you know, I don’t see happening for much of the year].
So as I’ve said before, if you can find something really nice that you’d like to own [not the crap under $300K]; and at a distressed price you’re comfortable in paying; I see there being fewer and fewer of opportunities surfacing within the next year.
The next good deal for an exceptional IV SFR I see is 996 Wedge Court [MLS #90012215]. This is a short sale listed at $1.9M [rumor has it the bank has already agreed to this price]. A lot of money but we’re talking nearly 6,000 square feet of new, very upscale, “Tahoe” craftsman style construction on a half acre east slope lot. I have a problem with the home’s orientation; the fact it backs up to Country Club [which is a pretty busy street]; $34K in annual property taxes [ouch, Mike]; and, the listing agents [who are affectionately referred to here in IV as “Charlie’s Angels”]. But other than that, this house can’t be replicated for anywhere near $2M.
Rubiconer
I agree with Smarten that the $300K condos at IV are pretty undesireable. But make no mistake about it that there are a number of IV condos on the market now in the low 500s that sold 3 years go in the mid to high 700s that are pretty darn nice. There are a LOT of condos on the market at IV, and if the owners of these condos are serious about selling, the asking prices are going to have to drop.
The IV condo market is clearly in retreat. I fully expect that 2010 will see more declining prices in IV condos at pretty much all market points, except the ones with the spectacular 180 degree lakefront views, which still hold up in the multi-millions.
CommercialLender
Smarten,
You mistake me for someone with $1.9M to spend on a 2nd home! (wish it were true!). I don’t want a POS anything, but am amazed there are 85 listings (on Trulia anyway) for under $350K. That gets well into the 2nd home range for many in the Bay Area: 3-4 brs, at least a garage, some storage, low maintenance, snow service, close to all the amenities, hold for 15 years and ski with the kids. I know this is tons compared to the median in Reno, but all I’m remarking on is the volume in this segment. I always keep sniffing, and I suppose one day I’ll bite.
As for the coffee, I actually thought about it before I came! Will do next time, thank you much.
Oh, and here’s a plug for someone’s business: I filled up my car at the 7-11 gas station on corner of Village and Tahoe Blvd. Smoke wafted over to my car from the “mesquite rotisserie” joint next door. I was rushed and could not stop to eat, but OH, MAN, did that smell amazing! Not eaten there, but anyone in that area can’t possibly be let down the way it smelled!
Guy Johnson
FRH, I don’t know of an explanation regarding the number of price increases. I am not aware of any marketing ploy.
billddrummer, thank you and you’re welcome. Regarding Sac RE blogs, none come to mind, but I googled “sacremento real estate blog” and many results were returned. Happy hunting.
CL, that eatery would be T’s mesquite rotisserie. Very good, indeed. The burritos there are great, too. Here’s a pretty accurate review of the place: http://laketahoereview.com/lets-do-lunch/143-ts-mesquite-rotisserie-offers-delicious-fare-at-affordable-prices
smarten
Hey CL, it’s called “T’s.” The best burritos on the North Shore. And it gets veerrryy busy!
Sorry about the $1.9M plug – the price is out of my league as well. But, IMO the home offers tremendous value. Besides, you should be making IV your new home. California and the Bay Area are both history.
You’re right about the glut of IV condos for sale. Our buddy Don Kanare [insideincline.com] is promoting one at $675K that I think is a good value. 1000 Lakeshore next to the Lone Eagle Grille and kitty corner from the Hyatt Hotel. Not too long ago there were a couple of resales in this complex at over $1M. And it has its own private beach!
There’s another complex I like called Third Creek. Between the Championship Golf Course and the Raley’s Shopping Center. Prices have come down here from over $1M to the low $600Ks. Some very, very nice units with garages. Good location too.
Then there’s our friends the Spees at 290 Deer Ct. They’re asking $950K [and they’re not going to get it even though they paid $1.2M five years ago], and their lender is about to record a NOS. So if you can get this puppy in the $600Ks, I think you would be doing well. Well maintained gated complex.
Two final complexes to check out. The first is called Bitterbrush II [not I], and it’s located above Diamond Peak Ski Area. Prices have really come down in this complex and you may even be able to pick up something in the $400Ks. A bit of a scary private road, mostly car ports but some units have fairly healthy Lake views.
The last is interesting because it’s a gated community of detached condos – they call them PUDs. For all intents and purposes they’re really SFRs but spaced closer together with a HOA. The complex is called Red Cedar. A good number of units have Lake views, wonderful low elevation location, gated entry, and prices are now starting to come down. Again, prices here used to be in the $1.2M range – one is primed to close in the low $900Ks, and I don’t think it will be too long before they’re in the low $800Ks.
IMO all five of these complexes are very, very nice. I understand the costs are all more than $300K you referenced but compared to the garbage at $300K, I think you’d be well ahead of the game with any of these.
Remember the broker’s tour is on Tuesday mornings so show up some Monday evening and we can go play Realtor for the day [assuming it’s not a powder morning] and crash their party! Good luck.
Reno Ignoramus
Don Kanare….I remember him. About 3 years ago or so Diane linked to his website where he commented that because there were no subprime loans in IV, that IV would be essentially immune from any price declines.
How’s that prediction holding up for Don?
Derrick
Prices in IV will continue to drop. houses that are asking 900k now will be selling for 750k by years end. those POS condo’s at 500k? those will be selling for 300k+
best to wait a bit longer if you are looking to spend that type of money on a place in IV
timmmmbbbeeerrrrrr
InclineJJ
Don, was right when he said not that many subprime loans in IV & Crystal Bay. I saw something that was shocking. The ratio of fixed 15 & 30 year loans vs adjustables was about 50%-50%.
Being that rates are low and the monthly, quarterly, yearly payment adjustment has not got many people, I think when the option arms and neg am loans reamortize after 5 years could land some people in trouble.
smarten
Well, 2010 Incline Village SFRs are off to a bang!
My absolute favorite home that I’ve written about before on this blog, 531 Silvertip, closed escrow Monday at $3.75M. This home was purchased 4 years ago for $5M and has been on the market for the last 3 years at between $4.75M-$5.25M. A lot of money but a heck of a house!
The same day a $2.25M SFR that has been on the market for a year [451 Jill Court] went into escrow.
And yesterday a $1.399M SFR that has been on the market as a REO for 4 months or so [996 Third Green] went into escrow.
These are all quality SFRs and the number of SFRs on the MLS are now down some 30% from the summer peak. Given not all SFRs are “quality,” if this is the market you’re following, your choices are dwindling and not being replaced by new inventory.
And the fact there are a glut of IV condos for sale, hammers home the point that in down markets SFRs hold their value far more so than condos.
In no way am I stating that the IV SFR market is booming. But for a market that is supposed to be tanking, I again point out that the data suggests otherwise. I also point out that there continue to be buyers willing to pay more than $1M for an IV SFR.
BanteringBear
Smarten posted:
“These are all quality SFRs and the number of SFRs on the MLS are now down some 30% from the summer peak. Given not all SFRs are “quality,” if this is the market you’re following, your choices are dwindling and not being replaced by new inventory.”
I think it’s common knowledge that people are trying to ride out the market “until it comes back” so they can sell for what they owe or what their dreams are made of. There is a massive amount of “pent up” supply. We’ll see how that works out for them.
“In no way am I stating that the IV SFR market is booming. But for a market that is supposed to be tanking, I again point out that the data suggests otherwise. I also point out that there continue to be buyers willing to pay more than $1M for an IV SFR.”
What’s transpiring in this country right now is, perhaps, the greatest wealth transfer of all time. Nobody should be surprised that some of the 1%’ers are paying millions for overpriced shacks in one of the most expensive zip codes in the entire United States. The problem, insofar as their property values are concerned, is that the entire market is interconnected. When the cheap houses fall in price, so do the expensive ones. It’s a fact. These high end sales will not carry the market.
bob c
To: Bantering Bear
You may have already revealed what you would invest in, but I have not seen that post.
Suppose i give you 2 million to live off—what would bantering bear invest in (long or short) without taking undo risk ?
Part of your answer could be a short sale of reno real estate REITS, but i am asking for a diversified portfolio. A mattress could very well be your answer. Please tske this request seriously.
BanteringBear
Hi Bob C-
Is this money which I would have to put to work immediately? I think not since you mentioned the mattress.
Since this is a real estate blog I’ll stick with that angle and say that long term I’d want to put that money into multi-family units with high cap rates- sound, well maintained properties in prime locations with good tenants.
Short term, without undue risk? Savings bonds, I suppose. That’s better than a mattress.
derrick
And that is EXACTLY what I plan on doing BB.
Right now I am looking for multi family properties, though there doesn’t seem to be anything solid in the UNR area.
My 2nd area besides UNR was the victorian square area, but the homes are so tore up that it’s hard seeing myself able to sell them for any profit at all down the road.
Now, I want to find 1 or 2 solid income properties, but I also want something that has some resale value to it! not some s*it hole that im stuck renting for the next 20 years!
derrick
And that is EXACTLY what I plan on doing BB.
Right now I am looking for multi family properties, though there doesn’t seem to be anything solid in the UNR area.
My 2nd area besides UNR was the victorian square area, but the homes are so tore up that it’s hard seeing myself able to sell them for any profit at all down the road.
Now, I want to find 1 or 2 solid income properties, but I also want something that has some resale value to it! not some s*it hole that im stuck renting for the next 20 years!
derrick
And that is EXACTLY what I plan on doing BB.
Right now I am looking for multi family properties, though there doesn’t seem to be anything solid in the UNR area.
My 2nd area besides UNR was the victorian square area, but the homes are so tore up that it’s hard seeing myself able to sell them for any profit at all down the road.
Now, I want to find 1 or 2 solid income properties, but I also want something that has some resale value to it! not some s*it hole that im stuck renting for the next 20 years!
smarten
Derrick, IMO Reno/Sparks is not a good market to be investing in income producing real estate. Rents are just too low compared to other metropolitan areas. And since the “appreciation” you seek will be directly based upon your ability to raise rents, if I were you I wouldn’t be holding my breath.
Which leads me to another question. Since you’re so anxious to be a landlord and realize handsome positive cash flow, why on earth did you ever sell your former SFR? With no mortgage and vested/banked property tax reductions [which would lower the prospect of future property tax increases], IMO you were set. Translation: WITHOUT taking a $90K hit in this depressed market, you had an asset primed to provide you with the handsome positive cash flow you seek. Further, when the market recovers [and it WILL] you would realize substantial appreciation in value compared to the depressed sales price you settled for.
Furthermore, not having landlord experience, don’t you think it would be prudent to wade into the fray cautiously rather than to jump in whole heartedly with multiple income properties? Just a thought!
CommercialLender
Smarten,
In no way to defend him, but Derrick says “multi family” units not “multiple income” units. The difference is large in terms of economies of scale, lender treatment, management, taxes, vacancy, long term capital needs, etc.
Buying multiple SFRs to rent out as a landlord is rarely a good idea in my opinion, even over time. Its apartments, “multifamily”, that makes sense usually from the get-go and very often over any time horizon, if not overlevered or otherwise an inexperienced owner. (BTW, my career is basically an apartment lender.)
Derrick, pray tell what your criteria are for an apartment purchase and why? Especially why you’d buy an apartment community in, no offense, a tertiary market such as Reno? (There’s a reason assets still sell in TX, Memphis, et.al. for $10K a door….what’s your profile for a Reno investment?)
smarten
I agree CL.
It’s just that in the past, Derrick has boasted insofar as his acumen to make killings in the stock/commodities [oil?] market whether the market were going up or down. So for him to now assert the real estate market makes so much more sense to him as an investment vehicle, I find striking.
Also, I really want to understand Derrick’s mindset as to why he sold his former Sparks SFR when he could have very easily rented it and realized good cash flow and depreciation write off? I mean according to him, he was under no financial pressure to cash out of Palacio.
Who knows, maybe we’ll get lucky and learn his [pardon the pun] thought process insofar as both of our questions are concerned?
BanteringBear
I think it’s obvious, given Derrick’s comments and actions, that he’s not cut out for real estate, or investing period. Rather than riding his Spanish Springs stucco sh!tbox to the near bottom, then selling, Derrick would have been better served renting the house out (I’m not a big fan of SFR’s as rentals, but it was free and clear), financing the condo, and putting the rest of the cash to work on a duplex or triplex. With a decent down payment, the property would easily provide for positive cash flow, and that combined with the income from the Spanish Springs house would pay for the note on the condo as well as put money in his pocket.
In ten years time, Derrick could have leveraged himself into more properties with this collateral. Instead, he chose to take a massive loss on his house, and sign up for more pain in the way of a condo- a real head scratching rookie move.
Derrick
I sold the SFR because I had knowledge of future comparable sales that are set to hit the market VERY soon.
example: 2 possibly more comparable houses, literally a stones throw away will be hitting the market sometime in the 2 months for LESS than $90sq/ft ( I sold the house for about $115 sqft). If had decided to hold off and NOT sell I would be looking at an even LARGER loss. Instead of 90k my loss would be in the range of $125k easily. further I wanted to use the capitol I get from the sale to purchase a multifamily property with a decent CAP rate.
I’m not looking to rent out SFR. I would prefer a 4 plex or possible a really nice duplex in good locations (near UNR).
BB I will be paying cash for whichever multifamily I purchase. So I plan to start out relatively small. something in the 150 K< range. I will then leverage the equity I have and eventually purchase more units in the future.
“Instead, he chose to take a massive loss on his house”
massive maybe to you BB.
Walter
There is no difference in being a landlord with a duplex or a triplex than being a landlord with a 2 or 3 SFRs. Believe me, I’ve been there. Now once one gets to the level of a real apartment building, with 20 or more units, that’s a different opportunity entirely. Also a different challenge as well. Somehow I don’t think Mr. Derrick is going to be in that game. No disrespect, but that’s a game for people who know what they are doing. Not people who were trading commodities on margin last year and decide they are going to do something different this year. These are two things better left to people with expertise. Some things really do require knowledge and expertise.
smarten
Interesting thought process Derrick.
Of course you wouldn’t have had ANY loss, let alone a $125K one, had you NOT sold your Palacio SFR. I agree with BB’s suggestions as to what you should have done.
I can’t understand why you never secure [nor are interested in securing (“I will be paying cash for whichever multifamily I purchase”)] purchase money mortgage financing for any of your property purchases. Could it be you can’t qualify given today’s more stringent documentation standards?
Regardless, how do you plan to “LEVERAGE the equity [you will] have” in whichever multifamily you purchase to “purchase more units in the future?” Or is that your way of saying you plan on selling your initial multifamily and rolling over the proceeds in more units in the future? If so, with all due respect I don’t see any “leveraging.” Or stated differently, I guess you “leveraged” your equity in your former SFR into your current condo.
Derrick
Smarten-
I didn’t leverage any of the equity I had in my former house to purchase the condo. I had already set aside the money to purchase the condo BEFORE the house sold. Therefore I had no need to use the funds acquired from selling the house to buy the condo.
what I meant by leveraging is that I will eventually sell the property and yes smarten, roll over the proceeds into another property. Sorry if I wasn’t that clear.
“Some things really do require knowledge and expertise.”
Well said and completely true! That is why I intend to talk with accountants, and insurance providers to fully understand the Tax implications as well as what type of liability coverage I will need to protect myself. Further, I intend on hiring a management company to manage the property on a day to day basis.