Thank you to our friends at Ticor Title for the Washoe County resale, refinance, and new home sales recordings for the month of December.
Compared to November’s numbers, December refis remained unchanged at 536. Resales fell 7 percent to 582; however still impressive for a December. And new homes sales dropped a whopping 26 percent to only 65 for the month of December.
Click on the chart to enlarge.
related posts:
Walter
65 new homes sold. I am curious as to what builers are still building, and where their developments are. Anybody know?
Also, is there a way to get the sold prices on these new houses?
Thanks all.
BanteringBear
Are homes sold on the courthouse steps included in the resale numbers since they are, indeed, recorded? If so, this would be greatly skewing sales numbers to the upside.
As far as the new home sales go, a lot of them could have been finished some time ago, not necessarily completed recently. That said, I know they are building out Del Webb in Somersett. I guess that endless supply of retirees is still filtering in from CA- or not. Keep building guys, and adding to that already bloated shadow inventory!
FutureRenoHomebuyer
Thank you, Guy, for all the great data you provide regularly to this blog. I know of no other site which is so rich in data (and commentary) for a local real estate market.
I’ll admit that I’m a bit surprised that volume has held up so well since the extension of the housing credit and the onset of winter.
I’m still apprehensive about the Reno RE market, but the data seems to show a resilience at/near the current median price. There is demand for homes at these levels.
Still counting on compression at the high end, though….
smarten
Just a side note, although it relates to new construction.
There’s a subdivision of three new upscale SFRs here in Incline Village [Campbell Court]. The homes have been completed for well over a year yet to date, they have not sold [each is priced at/near $2M]. About six months ago the construction loan against all three went into default, and recently a NOS was recorded.
Word has it the developer attempted to replace the construction loan with conventional long term financing, however, he/it couldn’t qualify. I am certain this has been/will be a similar problem for whatever remaining new for sale inventory that remains out there.
I can tell you this was the same problem for the developer of our home we purchased six months ago. When the home had not sold and the construction loan came due, the bank “blackmailed” the developer [at least how Greymare would label it] into paying new origination fees and an above market interest rate for a one year extension.
When the developers of new housing can’t sell their inventory; or negotiate with their construction lenders for an extension of the due date; or replace their construction loans with permanent financing; they end up adding to the inventory of distress sales.
Sully
Guy, is the NOD chart for December ready yet?
Sully
NVMD, I found it, thought it was the Nov data at first.
longerwalk
Houses in Breckenridge in NW are under construction; also Grand Summit on & off again. Kills me to see the lovely views on a high spot being built out cheek-by-jowl. At least some LRs seem to face Peavine. Who is paying the workers??? Where is this money–I mean the cash money–coming from? We are two years into this slide . . .
GratefulD_420
New Home – Active Contruction
Within the last week I’ve seen..MountainGate is bulding several units. Also Estates at Mt Rose with new developer, Tim Lewis has completed a few.
What is real scary about the later homes is the way they sat after Reynen&Bardis shut down. Several of the homes sat for two winters and a summer with all the framework wood and insulation showing & no roof. They slapped on the roof, dried it out, then completed the finish on top of all that exposed wood and insulation.
Wouldn’t it be awesome to spend $500k on a place like that! Nothing like buying BRAND NEW!
GreenNV
Walter, you got me curious. I’m not sure what data Ticor is capturing, but the Assessor only shows 11 new house sales actually closing in December 2009. I sorted out the bulk sales at Virginia Lake and Damonte Ranch and foreclosures.
3 at Esplanade – 1686 Wind Ranch ($188), 1900 Wind Ranch ($179), and another listed as 1900 Wind Ranch ($190).
5905 Sky Terrace in Arrowcreek ($1,325), though this may be a house built for the old owner and not on spec.
7340 Heritage Oaks in Northgate ($229).
2133 Tara Ridge in the Vue ($200).
642 Beckwourth ($245).
5025 Hitch ($175).
11760 Paradise Ridge ($290).
7196 Rutherford in Wild Stallion ($253).
18330 Panda Bear in Woodland Village ($206).
Pretty slim pickings.
FutureRenoHomebuyer
Upon further review, BB brings up a good point. Are foreclosures bought at the courthouse steps counted as resales? If so, this would dramatically skew numbers over the last few years. The trouble is that if the auction results in the property going to the bank (or a flipper), there will ultimately be 2 sales for the one real property sold.
As Guy’s thread of 7 Jan shows, of the 405 houses sold in December, 43% were bank owned properties. That’s 174 houses that were REO sales.
Here’s an example: Trulia lists 12305 Westridge Dr. (MLS#: 100000670) as sold on 28 Oct 09 for $284,025. http://www.trulia.com/homes/Nevada/Reno/sold/69492-12305-Westridge-Dr-Reno-NV-89511
Well, I now see the property listed on the MLS for $279,900. http://www.freenevadamove.com/idx/residential/100000670/details.html
So, when/if Westridge finally sells to a real buyer who moves in or rents the place out, I assume that sale will be added to the home sales count for that month. In other words, 2 sales counted in 2 separate months, when only one “real” sale occurred.
Could this be a primary reason why the total sales numbers seems so robust? If you delete 40% from the monthly total sold numbers, they suddenly look much less impressive.
If I’m off on the wrong track or am missing something here, I’d be grateful for any correction. Meanwhile, I’m starting to wonder of the huge REO inventory is upwardly skewing the monthly stats by as much as 40%.
FWIW…
FutureRenoHomebuyer
Upon further review, BB brings up a good point. Are foreclosures bought at the courthouse steps counted as resales? If so, this would dramatically skew numbers over the last few years. The trouble is that if the auction results in the property going to the bank (or a flipper), there will ultimately be 2 sales for the one real property sold.
As Guy’s thread of 7 Jan shows, of the 405 houses sold in December, 43% were bank owned properties. That’s 174 houses that were REO sales.
Here’s an example: Trulia lists 12305 Westridge Dr. (MLS#: 100000670) as sold on 28 Oct 09 for $284,025.
Well, I now see the property listed on the MLS for $279,900.
So, when/if Westridge finally sells to a real buyer who moves in or rents the place out, I assume that sale will be added to the home sales count for that month. In other words, 2 sales counted in 2 separate months, when only one “real” sale occurred.
Could this be a primary reason why the total sales numbers seems so robust? If you delete 40% from the monthly total sold numbers, they suddenly look much less impressive.
If I’m off on the wrong track or am missing something here, I’d be grateful for any correction. Meanwhile, I’m starting to wonder of the huge REO inventory is upwardly skewing the monthly stats by as much as 40%.
FWIW…
(I hope I am not double posting, but repeated refreshes show that this post isn’t getting listed on the board. I’ve deleted a few links and tried to repost again here)
smarten
Future, I think Guy’s figures are limited to MLS listed properties. So when a property sells at trustee’s sale, it isn’t included in Guy’s data.
I can’t tell you about Ticor Title’s data but it seems to mirror Guy’s fairly closely so that tells me it isn’t including trustee’s sales.
CommercialLender
BB and FRH,
Hmmmm, so not only do we have the oft-mentioned but elusively hard to estimate Shadow Inventory, but we also have possibly overstated sales figures rendering NAR’s oft-cited Months Supply of Inventory, well, bogus. The good news is that before a serious correction and stabilization can happen we need to have foreclosures work their way through the process, which is happening albeit at potentially 40% overstated rate.
Martin
Thank you Green/Mike.
I thought 65 new houses selling in December seemed rather high, and I was curious as to where those houses were. I find your results interesting in that except for the custom job in Arrowcreek (which may not have even been a new house)almost all the new house sales are for $250K and under.
Is is fair to proclaim the death of the McMansion? Will we ever again see developers building houses with wrapping rooms?
FutureRenoHomebuyer
Smarten,
The monthly sales figures always include a large percentage (lately ~40%+) of “bank owned homes.”
So, are you saying that the “bank owned homes” are only the properties that have reverted to the bank on the courthouse steps and later listed in the MLS?
If so, that’s a problem as well. Properties purchased on the courthouse steps are often kept as a home or investment, even if they are sometimes flipped as well. If these sales are not somehow accounted for, then the monthly figures are understating actual volume.
Either way, courthouse volume is skewing figures. It be valuable to get a definitive call on whether/how courthouse volume affects the monthly stats. This seems to be a significant data point that could dramatically alter analysis of where the market is and where it may be trending.
smarten
Future, I think Guy can clear up the source of his monthly sales figures. But it’s my understanding that when he reports that a certain percentage were bank owned, that means the bank previously foreclosed; title reverted back to the bank; the bank then listed those properties on the MLS; and, they subsequently sold as “bank owned.” The trustee’s sale is not included in these figures so there’s no “doubling” up [so yes, I’m “saying that the ‘bank owned homes’ are only the properties that have reverted to the bank on the courthouse steps and (are) later listed in the MLS”].
There are always more sales than just those reported on the MLS. You rightly point out that some trustee’s sales are to owner-occupants who have no intention [at least in the short run] of reselling. Then there are FSBOs that aren’t reported by the MLS. There can be exclusive or pocket listings which never get reported by the MLS. There can be sales listed on the MLS, but maybe not the Reno/Sparks MLS [Incline Village listings being a good example (but generally in reverse – instead of listing an IV property on the IV MLS, sometimes it’s only listed on the Reno/Sparks MLS)].
So I can’t see how courthouse volume is skewing the real figures. I think if anything, MLS volume is having that effect. Mike would know better than me, but I think you can learn ALL the volume from the County website which tracks all recordings [not just MLS generated ones].
Guy Johnson
Smarten is correct. My monthly sales figures come directly from our MLS. That means *only* properties listed on and sold through the MLS are counted in my figures. As smarten points out, FSBOs and properties sold on the courthouse steps are not counted in *my* figures.
billddrummer
To Guy,
Thanks for the clarification.
And by extension, median home prices, price bands, DOM and all the other statistics you provide us (thanks!) are based on MLS-listed properties.
Pocket listings, FSBOs, auctioned properties and the like would materially skew the statistics.
And further, just because over the past 3 years there have been a preponderance of distressed sales is a short-term anomaly, not a long-term condition. If the methodology were different from past years (pre-2006), then you wouldn’t be able to compare longer-term trends with any consistency.
A worthy debate, however.
skeptical
Billd,
I will respectfully disagree with you on this one. You know your stuff, and I’ve mostly agreed with your past contributions, but in this case, notsomuch.
Never in history have there been so many sales on the courthouse steps — by orders of magnitude. These numbers are so large that they can not be disregarded. Up until 2007, it was likely unusual to have more than a handful per month. With hundreds of MLS listed REOs selling each month, how many are coming off the courthouse steps? 150? 250? 350? 500? That would double the monthly volume. How many come off inventory every month? How much do they sell for? How many are owner-occupied?
Granted, you don’t want to double count courthouse sales, but the amount of homes selling to owner occupiers must be significant, and a good analysis of the local market cannot reasonably discount that data.
And, if it was your next door neighbor’s house that just sold for a nice 50% discount, lowering the comps for the neighborhood, you most definitely do care.
So, anybody have a quick, easy way (or source) for capturing (and tracking) the REO activity as it occurs? With over 40% of the re-sale activity every month being REOs, there must be hundreds per month leaving the courthouse steps.
skeptical
Searching further, I came across Mike’s post of 22 Oct 09:
“There were 93 Trustee’s Sales scheduled for the courthouse steps in the past 8 days (that’s as far back as I can accurately track the results). 46 (50%) went back to the bank. 41 (44%) were canceled. 4 (4%) were postponed, and 2 (2%) were sold to third parties.
This a HUGE difference from the numbers when I checked them a couple months ago, when only about 15% were going back to the bank, and over 80% were being postponed.”
So, 8 days does not make a statistical sample. The question of what is normal was never resolved. But if the activity of early Oct was not a complete outlier, perhaps the number of sales to third parties is pretty low (outside of NRES).
Still questions remain:
1) What is normal activity at the courthouse?
2) How does one find out about that activity?
3) What effect do courthouse sales have on the broader market?