Happy Mother’s Day!
April’s median sold price rose to $177,500 – up $1,500, or 0.8 percent over March’s median of $176,000. YOY, April’s median was 6.6 percent below April 2009.
April’s sold price per square foot increased to $103/square-foot – a 3.6 percent gain over March’s sold price per square foot of $99.44. If April’s number holds for next month, May could be the first time we observe a YOY increase in sold price per foot since the bubble collapse.
The number of houses sold in April was a robust 491 units – a fourteen percent increase over April 2009.
April’s sales break out as follows:
- Bank-owned properties – 30.5% – down from March’s 37.4%
- Short sales – 32.4%
- Equity sales – 36.5% – a nice increase from March’s 27%
For those readers who prefer the median sold price for houses and condos combined, April’s 568 sold houses and combos exhibited a combined median sold price of $164,000 – up 2.5 percent from March’s combined median of $160,000.
| Month Year | #Sold | Sold Price | Sold Price per SqFt | Average DOM |
| Apr 2010 | 491 | $177,500 | $103.03 | 128 |
| Mar 2010 | 474 | $176,000 | $99.44 | 142 |
| Feb 2010 | 338 | $170,000 | $101.68 | 138 |
| Jan 2010 | 346 | $167,000 | $97.06 | 134 |
| Dec 2009 | 420 | $176,500 | $101.15 | 127 |
| Nov 2009 | 460 | $175,000 | $103.51 | 112 |
| Oct 2009 | 560 | $180,000 | $103.65 | 124 |
| Sep 2009 | 520 | $185,948 | $103.31 | 128 |
| Aug 2009 | 482 | $179,900 | $102.64 | 116 |
| Jul 2009 | 515 | $180,000 | $103.45 | 126 |
| Jun 2009 | 536 | $180,317 | $104.09 | 136 |
| May 2009 | 425 | $175,000 | $102.31 | 139 |
| Apr 2009 | 429 | $190,000 | $105.71 | 133 |
| Mar 2009 | 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 – May 2010. Note: This information is deemed reliable, but not guaranteed.
MikeZ
Median price: stable. PPSF: stable DOM: stable.
Impossible! IMPOSSIBLE! I dont trust the data!!
james
but wait!!! I thought the median was headed to 140k??
HOW COULD THIS BE???
DonC
Last month the economy created 290k jobs. That’s a lot of jobs — a whole lot of jobs — but when you have 13.5M jobless even 290k jobs doesn’t make a huge dent. More or less the same for housing. Things may be getting better but there is a long way to go. Most areas are still fairly flat and Reno will probably not be an exception.
But things are definitely headed in the right direction!
skeptical
Tax credit expired as of 30 Apr, and this is as good as it gets?
Hardly cause for bravado.
Levels back to Nov 09, the last time the tax credit was supposed to expire. Coincidence? I think not…
Now we shall see how much demand was pulled forward.
MikeZ
Catch you next month, skeptical.
I can only wonder what your June reason will be to try to explain away why 11 mos. of stability isn’t really stability.
Sully
Guy, is Ticor still sending you the NOD,NOS and TS chart. You haven’t posted one since the Feb chart.
bob_c
dow futures up 221
fed reserve is backing europe bailout
Guy Johnson
Sully,
Ticor’s numbers were identical to Mike’s NOD/NOS numbers, so I just started deferring to him.
Thanks for asking though.
bob_c
ourt fed bailed out our banks…..now is backstopping the euro countries
i don’t know if this is good long term ..it
feels like a ponzi scheme (as long as everyone
believes, it will work….but what if its a bluff
and the fed’s hand is called?)
Denial
Skeptical do you seriously expect the median price sold and price per sqft to post any significant drop when we have seen 11 months of stability ?
Further, do yiu really expect the banks to just start flooding the bank with all the foreclosures they have on the books? IMO that is highly unlikely because they are obviously stabilizing the market by not doing just that… But hey keep waiting..
Meanwhile just made an offer 140k on a 4bed 2.5 bath 2000sqft house built in 2006 with a ton of upgrades that was accepted! Personally i dont expect deals like that to be around forever…
Denial
6 months ago many people noted that the 150k and under market had basically reached a bottom. Im willing to bet that the 200k and under market has now come close to stabilization as well…
Denial
Just imagine…. 10 years from now you can tell your kids you bought a house in 2010… This is almost as obvious as it was to buy stocks when the Dow hit 6,500.
Meanwhile the doom and gloomers continue to say that prices will tumble even more .. Oh how funny it is..some people are just really cheap!
smarten
Denial –
Mid-2009, not 2010 [well maybe it wasn’t so “obvious” back then].
I was watching a business program a couple of weeks ago and a real estate broker from a major mid-west agency was gleeful that the first time homebuyers’ tax credit was about to expire. His reasoning was that with so many doom and gloomers asserting that the only reason the residential real estate market had not fallen off a cliff was because of the artificial first time homebuyers’ tax credit, now everyone would see that the market has really recovered.
Skeptical and his group will continue to come up with excuses come May’s and June’s numbers because [after all] closings for these months will in essence be consummation of the first time homebuyers’ tax credit. But come July and August when historically, we would expect sales to be the strongest, our friend will be out of ammunition. What then?
Actually one of the most impressive numbers Guy has reported, IMO, is the percentage of equity sales. How can this possibly be the case given all that shadow REO inventory that has come out of the closet?
billddrummer
Good to see that the sales price/s.f. actually rose last month.
Perhaps the bottom is in.
Smarten's Vanishing Equity
“Skeptical and his group will continue to come up with excuses come May’s and June’s numbers because [after all] closings for these months will in essence be consummation of the first time homebuyers’ tax credit. But come July and August when historically, we would expect sales to be the strongest, our friend will be out of ammunition. What then?”
Speaking in hypotheticals, and constructing strawman arguments does nothing for your credibility. Weren’t you the one who just last year said that Reno real estate had bottomed at $250k, and that it would never drop below $200k? Do you think that people forget how incorrect you have been? Have you forgotten your own foibles? Your glass house is a shattered mess.
skeptical
Last December, I predicted a ramp job on volume/ppsf/medians going into the expiration of the extended tax credit. The only thing that’s surprised me is the relatively tepid data to date. My posts have been pretty consistent on this.
Smarten, you are correct. July and August will be the proof in the pudding. Our little debate will hit a conclusive moment by the end of August. I will yield to the bulls if August 2010 shows strength M-O-M and Y-O-Y.
And, OBTW, it won’t be a sad moment for me if that does come to pass. Too many people have felt too much pain during this calamatous period spawned by the Bankster’s and Greenspan’s recklessness and arrogance.
LikeBigBottoms
This absolutely, positively must be the bottom.
http://www.capitalgainsandgames.com/blog/pete-davis/1703/shiller-real-worry-well-grow-slowly-until-we-run-next-recession?source=patrick.net
“Asked if the market had discounted 7 million foreclosures in the pipeline and 5 million more coming as predicted by Laurie Goodman of Amherst Securities, Shiller responded, “That sounds very Efficient Market. Housing is very trendy and very inefficient…I don’t think these things are discounted into home prices.””
LikeBigBottoms
Excuse me, I was a bit premature in the previous post. This, actually, is the bottom:
http://www.nytimes.com/2010/05/09/business/09gret.html
“Serious delinquencies in Freddie’s single-family conventional loan portfolio — those more than 90 days late — came in at 4.13 percent, up from 2.41 percent for the period a year earlier. Delinquencies in the company’s Alt-A book, one step up from subprime loans, totaled 12.84 percent, while delinquencies on interest-only mortgages were 18.5 percent. Delinquencies on its small portfolio of option-adjustable rate loans totaled 19.8 percent. ….Freddie Mac said the main reason for its disastrous quarter was an accounting change that required it to bring back onto its books $1.5 trillion in assets and liabilities that it had been keeping off of its balance sheet.”
Time to buy a house.
smarten
To “Smarten’s Vanishing Equity” aka Derrick.
No, I never predicted that Reno/Sparks median sales prices would never fall below $250K. That was you as I recall [when you promised that if the median sales price dropped below whatever (was it $240K?), you would leave this blog forever].
I did say that IMO I did not think the median sales price would drop below $200K [this was when Mr. BB was predicting it could fall to the mid-$170Ks]. He was right and I was wrong.
But it’s a new day. Now I’m not saying that the residential real estate market is going to skyrocket from here, but it’s hard to argue with the data which demonstrates that for going on a year, the market has been relatively stable.
And BTW, notwithstanding the fact that we keep hearing about increased NODs, NOS, TDs and REOs, the simple fact of the matter is that the market continues to absorb them.
billddrummer
This is an interesting discussion.
Does anyone care to comment about why the average listing price is double the median selling price?
SWJP
Maybe that’s a softball Billddrummer so i’ll take a swing.
The upper end of the market is not selling through. The question is what is the median asking price and median selling price no?
Carney
The fact that the median appears to have settled in around $175-180K is irrelevant to the fact that there are many many still delusionally priced houses above $300K. Just because the bottom may in at the bottom in no way suggests that the bottom is in at the top, or even in at the mid range of the market.
Only somebody with an agenda will suggest that prices at all segments of the market have stopped dropping. Tell that to the sellers of the two houses on my street that had a price reduction in the last 2 weeks.
billddrummer
To SWJP,
I prefer to think of it as a cutter, rather than a softball.
If you look at the stats, median selling looks like it’s 98% of the median asking price.
But that’s at the sale.
It doesn’t track whether there were price reductions from the original asking price.
That, in my view, would be more instructive.
It still doesn’t answer the question, however.
I continue to believe (until someone has a good argument to the contrary} that asking prices are far too sticky on the upside.
And until asking prices get closer to selling prices, there won’t be a ‘leveling’ or ‘normalization’ or ‘stabilization’ of the local RE market.
Steve Herschbach
I enjoy speculating what way markets will go but I can’t profess to be any good at picking market tops or bottoms. But I’ve been pretty good at getting in the zone. Which for me means just getting close.
I know a lot of people buying now. My business partner just picked up a place in north Florida. My brother is making offers in Phoenix. And it is obvious people are picking up low end properties right now in Reno to resell at profit at fire sale prices.
Me, I guess I am in the Smarten camp. Most of you guys seem to be investors. A house to me is a place to live in. It looks to me like if you take the bubble out prices are close to the historical norm. When bubbles pop they usually overcorrect, so there may still be some downside. But given where the long term trend line is we are not far off now. Unless you are a doomsdayer, in which case we are all screwed.
So I have been watching Reno and reading you guys and watching the big picture and it looks to me like we are bottoming out. I do not expect much appreciation, but downside looks to be rather minimal, and what there is will likely recover. More importantly, I think interest rates are as low as I will see for the remainder of my life. Not a bad time to borrow cheap and pay back later with inflated dollars. Inflation is the only way the government can pay off all this debt. Just print more money. Total aside – you want insurance, get some good farm land outside a city or a gold mining property in Alaska.
But doom and gloom aside I expect we will muddle through this somehow. So I decided for various reasons to buy in Reno.
Now crazy part is although I am very frugal in this case it boiled down to what my wife and I want. She goes first in that sentence for a reason! We wanted what we wanted, and we expect to own it for a long time. We did not invest in a property – we bought what we wanted.
So long story short I decided to post this to throw in a certain factor that exists in reality but is discounted. It is not always about making a buck. It is about life.
I have friends that buy quarter million RVs. Road barges I call them. They lose value the minute you buy them, and every minute you own them. So why buy one? Stupid investment, right?
People buy things all the time that lose value on resale. So what? Buy what you can afford and get what you want. Life is short.
So my wife and I shopped for a year long distance. You have problems with Reno, just move to Anchorage and get a reality check. Actually I love my home state, but there are challenges living here that make Reno look great.
True story is Reno reminds me of home. We are the wild north and you are the wild west. It is not always pretty, but I like the people I have met in Nevada.
OK, so what the F, over? Why am I rambling on like this? The bottom line is I paid too much to buy a property in Old Southwest. No appraisal so who the heck knows but I am guessing I just paid $365000 for a property that might appraise at $325000 at the moment. Way less than it was worth a couple years ago but still too much. Why? My wife and I LOVE the property. It is everything we could ever wish for. And being a rather spoiled person I tend to get what I want. So what if I spend a few bucks more?
The best part is the people I am buying from love the area but need more space. They have to take a big hit, but at the same time need something with more room, so they wanted a place just two blocks away, only bigger. The owner there also wanted too much.
So I in theory pay too much to buy a place that my wife and I view as a dream property. That gives our sellers money to pay too much for a property two blocks away. Who the heck knows what happened to the sellers of that property, but they also got what they wanted.
All irrational from an investment standpoint. But true story, and reason why being rational does not always work. People just do what they want to do. That has been our downfall but may also be our redemption. All I know is I bet my bucks, expect to lose something on paper (so what) and have a property I get to show to my wife on Wednesday. She has not seen it in person, only in pictures, and she is going to cry (in a happy way) when she sees it. I don’t care if I lose $100,000 on the purchase on paper as long as she is happy.
Anyway, I am proof the $200,000 plus market is not dead. I bought for more than that as did the people I bought out. I am afraid they took a big hit, but they also can afford it. They also want what they want. All of which leads me to believe there is light at the end of the tunnel. There are people with money and we are spending it. Crank that into your calculator.
Denial
10 years from now you will look like a freaking genius for buying a property in 2010. Some of you people are waiting for that just right property to come along and snatch it up. Truth is, that may never happen!
Im sorry but after waiting 5 years ti buy our place we weren’t willing to wait another 5! Life is too damn short to wait 10 years to buy a house..also, since we bought a place we could more than easily afford we aren’t the least bit worried…
Steve Herschbach
Hi Denial,
I hope you are right. Part of me thinks this whole stupid house of cards will implode. I would not care thirty years ago but I am getting a bit too old to be living off the land at this point. I can probably still suck it up but it would be hard.
E.Edward
What a load of BS,
I must see 3-5 people a week that are upside-down in there home… And you know what? It kills them knowing they owe more than what there house is worth! There home/there life long investment is the one thing they were counting on and now are doing anything under the sun to get out from underneath it! Ask them if they would have made a different decision? reply “absolutely”
Snatching up homes to sell for a profit? In this overbuilt-saturated-unemployed artificial market? What a scream!…
I get it..”Your in-it for the long haul and a home is a place to live” bla bla…. What is that??? Your gonna sign a 30year note in a destructive-undecided market and you can’t be a little patient??? bonus: theres going to be plenty of inventory.
Tax incentives are done, Interest rates got no place to go but up!
What is better Wizards?….Buying at inflated prices with low rates or Low prices at a normal rates??? The mortgage payment is gonna be the same possibly less, {Its called market-bearing true value affordability}! and bonus your not stuck with a 30-year white elephant
You get one shot at the purchase price, you can always take advantage of a lower rate later. That is if your not UPSIDE-DOWN!
Repeat: Your all absolutely Dreaming if you think this propped-up market has bottomed!….. Just my opinion
….Keep Pumping!
skeptical
Steve,
Thanks for the details. Everything you’ve written makes perfect sense…except for one thing.
Why would you knowingly pay $365k for a house that would not appraise higher than $325k? Just doesn’t add up. Were there no other quality places available at your price point? Were the sellers not willing to budge? Did you try for a lower price?
Something tells me that time was on your side, and with a little patience, you might have saved $40k.
Those questions aside, congratulations. You sound like you’ll be a great addition to the community.
Steve Herschbach
Hi skeptical,
They were asking $395000 and they came down to $365000. They did not have to move – it was the number they needed to make their deal work but they could stay put easy enough. It is sort of all relative as they lost money selling their place, but the place they are buying also cost a lot less than a couple years ago.
Trust me on one thing – we have been looking a long time and are kind of picky. I was not looking for a deal – I was looking for what I wanted, and this place hit on all cylinders. I could afford it so I got it. And good properties in core Old Southwest do not seem to come to market often.
I guess I am a little weird in that if the house were to double in value tomorrow or drop by 50% it would not matter to me. I fully intend to own the place 30 years from now so what difference does it make what it is worth? In any case I own it free and clear – it is my home in Anchorage I refinanced to make the buy. Which is why I do not really know what the property would appraise for so I could be wrong. I thought about getting one but then figured, what is the point? I’m quite happy with my purchase.
If it would lower my property tax at all I’d be just as happy if the value dropped. But you guys have a strange system there I’ve not quite figured out. Here we just pay a tax on whatever the current municipal valuation is on the property, which is ballpark close to real values. So if my house drops dramatically in value here so do my taxes.
Steve Herschbach
smarten
Congrats Steve –
And thanks for sharing your reasoning.
But I have a question. I thought you said your wife was only going to see the house for the first time this week [you said she had only seen pictures]. Yet now you’re telling us you already closed escrow?
A home is one of the most important and expensive decisions we ever make. Thus I can’t conceive making that decision without at least walking through it. What was you/your wife’s thought processsz on this one?
Steve Herschbach
Hi smarten,
I flew down and viewed the place myself. I know my wife well – she will love it. There is more I could offer up but it is not like I need to air all my laundry!
This blog is of course centered more on making a buck on real estate but there are people who are motivated by other things. I sell people $250,000.00 boats. They are holes in the water you throw money into, and I can promise them they will lose a lot of money when they go to sell it older and used. But people still buy boats.
I have never bought a house to make money. I buy them to live in. I have other ways to make money thankfully.
If my wife hates the house I’ll let you know!!
Steve H
Steve Herschbach
I’ll tell you where I’ve made a ton of money on property. Buying and selling gold mining claims. Been doing that for 30 years. Get some good ground, mine gold off it a few years, generally recapturing cost and then some, then selling for more than paid for it. Never gone wrong on that. I picked up a dozen claims last year and am buying another right now. Should wrap that up next week.
google my name and gold
Any of you guys ever get involved in mining claims?
Steve Herschbach
DonC
Steve — Never been involved in gold. I did know a guy in Anchorage who made a ton of money in real estate. He’d buy during the busts and sell during the booms. As I’m sure you know, Alaska is a good place for this approach.
One point that people are missing but you’re getting is that if you want to live in Reno, the real comparison is between what you have to pay to buy versus what you have to pay to rent. Buying has a lot of advantages on the consumption side — you get to do what you want with the house — so most will pay a premium in order to own. As long at the rent/buy ratio is 20 or under it’s not such a bad deal.
Also on your side is that while no one has a crystal ball, though some think they do, there is one fact that is inescapable: housing in Reno is under priced by historical standards so in the long run you have more upside than downside. Plus if you found the house that is just right for you, and you bought it because you just wanted it, then you’ll probably end up quite happy.
As for price, trying to get the absolute “best price” is an exercise in futility IMHO. The goal is to get a decent price. If you try and time the absolute bottom of the market you’re likely to drive yourself crazy. Plus what seems like a big difference at the time always looks different down the road. You may buy a stock for $12.50 when you could have waited a few days and bought it for $11.75. Who knew? But ten years later it’s $26 and it doesn’t really matter.
Do congrats and enjoy your house. Where BTW to you live in Anchorage. I lived in Bootlegger’s Cove when I lived there.
Sully
DonC, there you go again with Reno being under priced by historical standards. Whose standards? If anything the under 300K market is right at historical average when inflation is factored in, the over 300K market appears to be overpriced by a range of 25 – 50 percent. It depends on which areas you are looking at.
And the 1 million and over market doesn’t even belong here for the most part.
Denial
Edward and sully–
You two still waiting for prices to tumble and get even cheaper? If so, i hope your not looking to buy anything above 250k.
DonC
Sully – That would be the SAME STANDARD which found residential real estate in Reno to be grossly OVERVALUED at the end of 2006. Overvalued then. Undervalued now. Seems reasonable that circumstances are so profoundly different.
FWIW any standard which finds that markets are ALWAYS overvalued has to remind one of the maxim that even a broken clock is right twice a day.
Steve Herschbach
Hi DonC,
We have not really had a bust for some time now. Just slow appreciation but that is serving us well now. No real decline in Anchorage housing prices in the last two years.
My wife and I were thinking of downsizing and have been watching Bootlegger’s for some time. Like Old Southwest, the good ones come up but rarely there. A nice condo just came up but too much happening with Reno deal at the moment.
Which is where I am right now! Wife loves the house, we could not be happier.
Steve H
GreenNV
Steve, welcome to “Reno”. It is a house with great bones, and reminds me of the house I grew up in in the Midwest. I agree with your assessment that you “overpaid” by 10% or so, but in 30 years or so it won’t really matter.
Now just don’t stop commenting here because you are “homed”.
Carlo
My neighbor across the street just reduced his asking price. I guess all the people who are not making offers on his house must not know that the bottom is in and that every house in Reno in undervalued by 30%.
Ex-Kiwi in Reno
To Steve,
Welcome to Reno. You sound like the kind of transplant that will fit right in. If I’m correct on the house, what an excellent decision you made. I cannot see too much downside with this property as long as there are people like ourselves that appreciate old world craftsmanship and mature landscaping and have the resources to purchase our dreams. When I get the chance to drive by one of these grand old ladies, I cannot help but smile. Again, congrats annd welcome.
Cheers,
Ex-Kiwi
Steve Herschbach
Hi GeenNV and Ex-Kiwi,
You guys must be doing some sleuthing!
I love the old construction. A brick house that looks like no other. Original hardwood floors. Solid maple doors with glass door knobs. Original cabinets and tile. All beautifully refinished. Quit streets lined with huge old trees. Everything I could want in walking distance.
Quality and location. I looked at all this new construction going for super low prices, and it just did not do it for me. No doubt the McMansion people are still having to drop their prices – there is a ton of that stuff for sale. They built too much and it is priced too high.
I think most of the people in the places like core Old Southwest are established, and many owned their homes before the bubble started. They saw the value go up, and the value go down. But they are not underwater. Some more recent purchasers are of course, but the area is pretty quiet sales wise compared to the places built in the last 10 years.
My ace in the hole is a large unfinished basement that I will renovated into official living space, effectively doubling the listed square footage of the home. Right now we really can’t ever imagine selling the place, but I always tinker with my homes to improve them any way I can.
Steve H
smarten
Thanks Steve –
Don’t listen to the naysayers on this blog. You did what you felt was right for you and your family with your eyes wide open. IMO you can’t be criticized. And all this talk about you being a fool for possibly paying 10% more than fmv [I say “possibly” because if there aren’t any truly comparable resales, whose to say you paid too much?] – it’s just that; talk [and no less by STRANGERS with questionable credibility]. How many of us have purchased vehicles in our lifetimes for 10% more than we could have spent if we hadn’t acted so stupidly, yet we just had to have them? What about stocks or bonds? What about mortgages? What about meals at those fancy new restaurants? The point is that we are presented with many opportunities during our lives and we either take advantage of them or come up with justifications as to why we shouldn’t. How many times do we look back and regret we didn’t act when we had the opportunity?
Sounds to me like that unfinished basement bonus you spoke about is going to more than make up for your arguably paying more than your home’s fmv. And I’m happy your wife loves the home [if she didn’t, you’d be in one of those after-the-fact regretable situations].
Steve Herschbach
Hi smarten,
I built a 20 million a year business with a high school education and a pocket full of borrowed money. I trust my decisions and I could not give a rip what others think. If I had ever listened to nay-sayers I’d never had gotten anywhere in life.
My apologies to any who think this is serious stuff but it is not to me. I wanted an iPad and I got it. I wanted a house and I got it. I do not care right now what either is worth. So, yeah, you’ve got me nailed smarten. Right now I’m going to go pay too much for breakfast at a restaurant when I could have a bowl of cereal. Just another stupid move financially!
You don’t know my wife. She picked the place out. My only role was to approve it and make it happen
DonC
Carlos — Focus, Carlos, focus. Think selling prices not listing prices. Just because a homeowner lists their house for $2M doesn’t mean it’s actually worth $3M. It may be worth, I dunno, $685K. Stated differently, you need to look at the properties that sold, not those that didn’t.
Hope this helps you “get it”.
Steve — Buying in a down market isn’t a recipe for losing money. Too many posters here strike me as momentum players. You know, buy when prices are going up and sell when they’re tanking. That’s a strategy that can work OK in stocks or financials but housing has transactions costs that make that approach a loser.
Enjoy your house because, as you’ve said, at the end of the day your house is about your life not about your financial statements.
Steve Herschbach
Some guy named Tim W who follows this blog tried to email me though channels but I am not having any luck replying. Tim, you can email me directly at steve@herschbach.com and I will get back to you.
Ex-Kiwi in Reno
Steve,
With all the information sent out nowadays, especially with the Listingbook.com website, and if you are the type of cursed person that numbers and details stay in your head for ever, it only takes a second to read something and connect the few dots to come to a conclusion. I hope I didn’t cross the line between natural curiosity and been nosey, but honestly I knew in an instant which house you were describing. The well maintained houses in that area just don’t turnover that often.
I for one am glad this blog is gradually leaning away from the loud, obnoxious quick buck artists to people who will enjoy their homes and the Reno area for what they are.
Cheers,
Ex-Kiwi
Denial
Welcome to Reno Steve! I for one am not going to criticize your purchase. Just nice to know your wife and you are happy !
DownButNotOut
Steve – Congratulations. In your shoes I would have done the same thing. Just as I would have done what Smarten did if I were in his shoes. Heck, I might be back in the Montage hunt – the biggest laugher of all – because it’s what my wife wants. Just don’t bother to try and justify it to those that have different opinions. Ain’t gonna go over. Not ever.
Steve Herschbach
Thanks all for the welcome!
http://money.cnn.com/2010/05/11/real_estate/home_supplies_shrinking/index.htm