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NODs fell to 639 from 710 in April and 998 in March. NOSs fell to 582 from 637 in April and 794 in March. TDs fell to 327 from 348 in April and 284 in March. When you factor in that May had only 20 business days vs. 22 in April and 23 in May, things remained essentially static this month. If you like the pretty graph, you can find it here.
What happened on the courthouse steps this week? Of the 147 scheduled Trustee’s Sales, 42 went back to the bank, 80 were postponed, 22 were canceled, and 3 sold to third parties. inclinejj sends me weekly summaries of the Trustee’s Sales he follows in various markets, and this week’s numbers in Reno, as sad as they are, still show a much greater percent of sales actually closing in some manner than his figures. Or who knows, maybe it was a lucky week for the banks?
Montage closed 4 all cash deals this week, and there is talk that the first offerings are selling out rapidly.
I scan the NOSs daily looking for a couple properties I track. Somersett NOD 11/9/09, still no NOS. Belli Ranch NOD 8/14/09, still no NOD. Spy Shop guy NOD 8/14/09, still no NOD even though a negative Certificate of Mediation was recorded 1/10/10. Dant house with a 2/4/10 NOD based on a 9/1/08 missed payment actually sold as a short sale a month ago for $625,000.
There were a couple notable NODs filed this week. LW D’Andrea LLC (AKA Lennar) received a whopper. Original loan was $40,500,000, and they missed their required principal reduction to $30,000,000 on 3/4/08 and another to $25,000,000 on 9/2/08. As far as I can remember, this is the first case of a national player going into default rather than through an alternate resolution process (deed in lieu, short sale, modification). Any yet Lennar is still buying property. Bless the LLC structure!
The second notable NOD was Magnolia Village LLC. Missed payment on their $17,200,000 loan due 10/6/09. This is the development at McCarran and Lakeside, with allegedly one of the highest volume Starbucks drive-th roughs in the nation. This was the successful property that launched The Magnolia Group on their road to ruin. National companies were locating here, and the tenant imporvements exceeded anything I was doing in SF at the time, but the rents just never justified the investment. It was the "Reno is World Class" porject.. Wrong, as it turns out.
So what are you thinking this long holiday weekend?
Sully
DonC, who the hell do you think laid the groundwork for capitalism to fail in the first place?
DonC
Down says “I read the other day that the government was responsible for the majority of the newly employed, what with the census hiring and all.”
Where did you read that? Basic math would say that 66,000 is not even close to being a majority of 290,000. http://www.bls.gov/news.release/pdf/empsit.pdf
The fact is that five out of the last six months has seen job creation better than since 2007. Chart 2 in the Bureau of Labor Statistics document I’ve cited clearly shows that there has been a recovery. The pattern is normal. What’s abnormal is how long the job losses piled up and how large they were. Ugly. Very ugly.
DonC
Sully — First off, capitalism has always failed with great frequency. That’s the reason for all the post-Depression era regulation.
If you’re asking who laid the groundwork for the most recent failure, that’s pretty simple: Conservative economists who developed the efficient market hypothesis, which essentially argued that capitalism was so terrific that capital markets were self organizing and self regulating and that government regulation would only reduce efficiency without any corresponding benefits.
After the economists made the Kool Aid, media outlets like Fox News sold the Kool Aid to the general public while lobbyists from the financial firms, armed with plenty of campaign contributions, sold the idea to lawmakers and well meaning regulators (Alan Greenspan, Larry Summer — Phil Gramm no, he just seemes to have been stupid and greedy).
It was very effective sales job. And to some extent the efficient market hypothesis has merit. It’s just that increased efficiency comes with the downside of instability and the potential for catastrophe so, on balance, the increased efficiency you get from eliminating government regulation is not worth the resulting instability.
KingBud
I’ve been following the spread between asking price and median sales price on Trulia in different markets to monitor pricing activity.
In my view, the trends in asking price reflect seller psychology more than anything else. I’ve noticed in the last few months that average asking prices have been going up slightly in many of the markets I follow.
However, I’ve also noticed that median sales prices continue to move downward, albeit at a slower pace.
The way I interpret this is that the economics of residential real estate are still unfavorable, and sellers are still having to lower prices to get their homes off the market.
As we all know, the real estate market is not a free market right now. The government is manipulating it through foreclosure moratoria and other actions to stave off foreclosures. They are leaning on banks to not issue NOD’s, or to issue NOD’s but not NOS’s so people don’t get kicked out of their homes.
There’s a whole group of people out there living in homes in which they have zero or negative equity, and for which they are in arrears on the mortgage payments and the banks aren’t foreclosing on them.
Sully
So, you put it right back on Congress. Last I heard Congress was part of the government. When did they split off?
Sully
DonC, please read this link. I didn’t know about Sen Dorgan’s warnings at the time and sent Pres Clinton the same message in Sep 1999 on my own.
http://kaufman.senate.gov/press/floor_statements/statement/?id=e68336ed-69c8-433c-b1b2-b592629ca24c
Rory
Don C doesn’t get it. He really doesn’t get it.
Capitalism and the markets didn’t fail. Actually, it’s impossible for markets to fail they only correct. But the so-called regulations and the regulators failed, and congress did everything in it’s power to intervene in healthy markets so as to achieve fairness. Thanks for that!
In all seriousness Don, you need to stop reading Daily Kos and get some Ayn Rand in your life.
anonymous
wow, in the wake of the greatest environmental cataclysm to ever affect the United States, and in the wake of the greatest financial disaster since the Great Depression (both fostered by a complete removal or abdication of regulation) some guy from Reno is advocating unbridled capitalism, even less govt, and Ayn Rand.
Guess I can continue that search for a house in Reno in some other state.
You people know just enough to be really, really dangerous…
SmartMoney
Wow, after reading DonC’s comments I finally stopped laughing after two hours. I guess he’s your classic CA liberal. Hope he doesn’t live in NV.
DownButNotOut
Wow! DonC – where to start, where to start. First – you’re retired with a nice pension secured by your union right? Never work a day as a sole proprietor in the business world right? How do I know? Because when the government is in your pants on a daily basis you don’t go around defending why we need more of them how good they’re treating us.
What does a lobbyist do? Is there anyone that really believes big government isn’t bought and paid for by special interest? If so how can you defend what government takes from us that produce on a daily basis. If not how do you reconcile that view with what is going on in the world. Doesn’t the national deficit speak for itself? Cash for clunkers, mortgage credit, do you really think this is helping us?
As for the Gulf fiasco, do some research. We’re now finding out that the people that were to be our government oversight were bought off in every way imaginable.
When big government no longer has the country’s interest in mind, we all lose. And unfortunately that’s where we’re at. Hope you like your mandatory health insurance. As of 2011 you have to add it to your income and pay taxes on it. But you’ll be happy to know they need to hire 16,000 more IRS agents to monitor the new law. At least unemployment will be going down.
Dirtbagger
Like the Reno real estate market, when you start grouping all properties together you can come up with some contradictory conclusions.
Lumping small business with large corporations is just as illogical. Small businesses are at a huge disadvantage to the large corporations. Large corporations (banks, defense, energy, insurers) do love government. They love TBTF, IMF, favorable tax and legal treatment, no-bid contracts, etc.
It seems that the last 30 years has been spent kicking people off of welfare and replacing them with large corporations. Call me what you want, but our small business was a lot more prosperous when the wealth was spread a little more evenly among the population. Unlike large corporatins, most of the money our business generated remained in the local community.
I am a little tired of the BS emanating from the neocons and their propaganda machines such as the Heritage Foundation and National Enterprise Institute about getting the government off of everyones back.
OK conservatives lets do it. No more special treatment for the large corporations. They can compete on the same level playing fields as small business.
Lets start with the banks. The largest 6 financial instutions are bankrupt without mark to market leniency of their assets and government guarantees. Lets put them into recievership and reorganize – bondholders and stockholders all take big haircuts.
If we want to extoll capitalism, then it has to be for all business, not just small companies.
Sorry for the rant, just get tired of the Drill Baby Drill crowd that hates government and the commons, now complaining that government needs to do something about the BP oil leak.
Sully
Wow, how you guys go from government intervention to neo cons and the BP oil spill is beyond me, especially in relation to real estate.
Intervention as used in this blog context, is what the government is now doing, mainly because they dropped the ball by not following up with their regulatory job. It has nothing to do with no government or less government. It has more to do with the government doing the job it’s supposed to do and not to micro manage the private sector.
This also is not putting the blame all on the government, just the people like SEC regulators downloading porn instead of doing their jobs.
If the regulators had caught some of the shady area transactions early on, maybe this mess wouldn’t be so out of hand and the govt wouldn’t own or control every other company in the financial sector. Even that is no guarantee, however if this mess was detected earlier in the game they may not have to be meddling so much.
MikeZ
[dopey] “I infer from your questions/remarks that you believe asking prices are irrelevant. Could you please explain that logic?”
What a seller thinks his house is worth or what he needs/wants for his house is, at best, only weakly correlated to market price stability.
In this blog we see claims that high asking prices mean market prices are not stable. But I assure you that the same people would also claim that low asking prices mean the same thing!
These people do not understand market economics.
This is the same effect that makes some people see Jesus Christ in a grilled cheese sandwich. In short, some people see only what they want to see.
Many other metrics are much more strongly correlated to market conditions, such as selling price and PPSF. Those are where I focus.
skeptical
Dirtbagger,
Classic rant. That one’s a keeper. Amen, brother.
Diane Cohn
Geez, I used to get bitch-slapped for posting too many macro-economic-questioning-government-propaganda links because it wasn’t directly related to Reno real estate, and here you guys are talking about all that stuff!
Sully, I concur. When the dollar fails, the US people will be impoverished: http://globalresearch.ca/index.php?context=va&aid=19458
And, I would add, that would be the best time to buy real estate anywhere in the US. Provided, of course, that you’ve preserved capital in something other than US dollars.
If anyone doubts the course we’re on, I urge you to read this book based on eight centuries of real data: http://www.amazon.com/Different-Eight-Centuries-Financial-Folly/dp/0691142165/ref=sr_1_1?ie=UTF8&s=books&qid=1275536657&sr=1-1
DownButNotOut
Hey DonC – May’s employment report shows 431,000 jobs being created. Of which only 41,000 are private sector jobs. Seeing a majority hired by government now????