The national average for homes with negative equity is 24 percent. In Reno-Sparks, that average is 56.3 percent. Yes, more than half the homes in Reno-Sparks have negative equity. And this number is expected to increase.
See the RGJ story here: Percentage of underwater homes in Reno-Sparks continues to exceed national average.
Move to Reno?
smarten, just wondering, but how long do you expect Reno SFR to stay at the “bottom”?
smarten
M2R –
This whole “bottom” calling thing has come about only because of Guy’s monthly data posts which primarily rely upon SFR unit sales/median sales prices and to a lesser extent, price/sq. foot and DOM. So when I and others talk about “the bottom,” we’re talking about a bottom in those specific terms.
When you and others expand the parameters to include things like unemployment, sales in the $500K and up strata of the market, NOD filings, distress sales as a percentage of total sales, “I’ll know it when I see it,” etc., etc., that all goes out the window. So IMO, we often are talking apples and oranges.
Then we have people like Mr. BB who don’t believe in tops nor bottoms unless they’re historical tops or bottoms. In other words, we’re currently not at a market “bottom” because 5 years from now we’ll be lower, or 60 years from early 2008 we’ll be higher [and then the discussion will be inflation adjusted?].
So with that said, and measured by Guy’s parameters [and I’ve already gone on record to this effect], I expect the Reno/Sparks SFR market to roughly stay within the $170K-$180K median sales price range we’ve been in for nearly a year, through the rest of this year. I don’t see how anyone can forecast much more than a year out [and this applies to all those permabears predicting there won’t be a turnaround for 2-5 (or 10 – Japan?) years].
Now if you and others don’t measure the SFR market by Guy’s parameters, my opinion will mean nothing to you so why ask for it?
If you have followed this blog for any length of time [and I think you have], you know that measuring sticks such as the list/sales price ratio and DOM are largely irrelevant and darn right deceptive. Neither take into consideration original list prices nor listing dates [only the latest in a series of renewed/updated prices/listing dates], and DOM only applies to listings that actually sell [as opposed to the overwhelming majority which languish on the market for many months/years].
So I’ll tell you what. You, skeptical, Mr. BB or whomever come up with a different measuring stick [directly related to the residential real estate market as opposed to the Euro or unemployment] we can all agree upon, and then maybe we can have some intelligent discussions [rather than name calling]? For instance, I personally think price/sq. foot is a constructive [but by all means not the only] step in that direction. I also think another important piece of data, and related to unit sales, is the number of active listings.
BanteringBear
“MikeZ said,
in May 23rd, 2010 at 8:27 pm
When I got here, in ‘03, as an outsider, I could see that things were already frothy and bubblelicious, even if the locals didn’t think so.”
Then:
“So, instead, you listen to a jackass from Washington State telling you what you should be paying.”
You’ve just made the case that you have ZERO credibility. You have no concept of historical pricing in Reno, NV. I do. I was raised there, and have family who own more property than you could shake a stick at. Who’s the jackass here? Best to shut your piehole when you don’t have a clue what you’re talking about. Run along now, loudmouthed east coast boy.
BanteringBear
Smarten posted:
“Sarcasim? Arrogance? There’s only one poster on this blog I’m aware of who exhibits these attributes, and I don’t think he’s a bottom caller.”
Oh, god almighty, please, don’t make me gag.
geopower
I agree on ppsf as a key index. Of course for any given house you’d need to control for quality of construction and neighborhood. But for the market as a whole, I’d think those factors average out over time. You could protest that because the owners of nicer homes have been more resistant to dropping prices, those homes have contributed a smaller percentage of sales lately. But I think the high end homes we love to discuss here are never a large percentage of home sales in Reno, boom or bust. This is largely a working class town, most homes in Reno aren’t in Juniper Trails or Arrow Creek.
Also I’d think percent selling should be a useful indicator. Once most all sellers are pricing their properties correctly, we should be in a stable market. Of course, this is a bit more of a trailing indicator than leading, but I suppose all statistics that rely on completed sales are.
I know it’s in the Market Condition Report every month, and has been trending up (with seasonal fluctuations) from a low of about 25% since ’08. At 65% for Reno SFR last month, we haven’t yet reached the 80% of listings that sold successfully in ’05, and unfortunately they don’t list data earlier than that, because I hate to only be able to compare to boom and bust markets. I think it’d be interesting to see what the percent selling was during the stable market of the 90s, that’s really what we want to compare to. But most published reports coming from real estate and title companies don’t go back more than 5 years, or 10 at most.
MikeZ
[MoveToReno] Why not include “sales to list price ratios” and “days on market”?
DOM seems reasonable – and that also shows stability/improvment – but list:sale tells you more about sellers’ expectations than it tells you about the general market.
We all have our own subtlely different definitions of “the bottom.” For me, it’s when price depreciation stops. Feel free to use your own.
MikeZ
Oh, for crying our loud Bar, seek some therapy for that OCD, or get a life! You’re becoming Derrick.
BanteringBear
What’s with this OCD infatuation, MikeZ? Is this something you have first hand experience with? In fact, doesn’t the record show that you’re the one who has gone “all OCD” on me? Ever heard of hypocrisy, MikeZ? Look in the mirror sometime, fool.
Sully
MikeZ; I’m gonna go out on a limb here and concede. You are right I was wrong.
Reno real estate will very shortly be considered 60% undervalued. The unemployment rate will become a moot point as the money creation out of thin air will escalate. Cash will be dumped in all our laps and none of us will have to work another day.
The stock market will never again correct and the DOW will hit 40,000 making the dot com bubble look like a blip.
Taxes will become a thing of the past as government will not be necessary because no one is working anyway. Politicians can do openly what they normally do anyway, which is nothing. We are headed for the Promised Land, just a short jaunt away.
Yeah, I had that dream too. However, I called it a nightmare!
Move to Reno?
smarten, Guy’s metrics are fine. Price per sq ft is also a good guide.
So, how long to you expect Reno’s SFR to stay on the bottom?
skeptical
For those out there who have stated that unemployment doesn’t matter:
http://www.calculatedriskblog.com/2010/05/states-mortgage-delinquency-rate-vs.html?utm_source=patrick.net
Actually, NV “outperforms” many other in its relationship of unemployment to defaults. Only Florida beats us out.
Loudmouths with no understanding for how the market works really do nothing for this blog.
billddrummer
To skeptical,
Here’s my take on the unemployment v. mortgage delinquency equation:
http://seekingalpha.com/user/156354/comment/1036349
Housing (particularly new home building and selling) is a primary employer for hundreds, and affects thousands of jobs in associated industries.
Until housing comes back (whatever that means), those jobs will stay gone.
DownButNotOut
Skeptical – My cursory review of above posts didn’t show anyone stated unemployment didn’t matter. Could be wrong. Some said it wasn’t the sole or even the primary cause of the housing dilemma. Others wrote it was the only thing that mattered, which I don’t agree with. To start the process, people didn’t lose their jobs then default. Overinflated housing prices causes the bubble to burst, voodoo loans came due and consequently workers lost their jobs, which in turn fed the default process. But maybe too fine a point to be argued here.
BanteringBear
Local employment and wages are the main driver of home sales and prices in the Reno area. Thus, high unemployment is a significant problem for the housing market. In a situation where more people with mortgages are underwater than not, it’s hard to come up with an adjective to describe how problematic the situation becomes. Why? Because when Joe Sixpack loses his job, can’t find another, and has to put the house on the market- there’s no way to sell because he can’t bring the cash to the table to seal the deal. We’re not talking people just a little bit underwater, but by hundreds of thousands of dollars.
With all time record unemployment numbers, the current situation can only be described as a housing crisis wrapped inside of a full scale economic meltdown. The idea that the housing market has bottomed in the face of these headwinds is preposterous. What with the mammoth inventory overhang in the pipeline in the way of bank REO’s not listed for sale, future foreclosures from the current crop of delinquent loans, and pent up supply from sellers waiting for a market turnaround, things look as grim as can be.
smarten
So let’s assume Mr. BB is correct –
No one will be able to afford to purchase residential real estate [so unit sales will plunge];
The mortgage industry will come to a screeching halt because no one will be able to qualify for a loan;
The median sales price for those few homes that do sell will plunge; and,
Prices/square foot will plunge.
Notwithstanding everything Mr. BB has pointed to, so far, this hasn’t happened for the last year and all the factors he has pointed to have been omni present.
So let’s again assume all these things ARE going to happen. How long should we expect to wait Mr. BB, before we see evidence of the foregoing? 30 days? 4th of July? Labor Day? New Year’s Eve? Two years from last Thursday?
Oh but I forgot. Isn’t Mr. BB the one who told us he DOESN’T predict ANYTHING?
GratefulD_420
OMG…. SMARTEN is out of control!
He can’t stop refering to the SFR Median “as Guy defines it” because it supports what he wants. What about the housing tracker? Offered several times as a discussion point? what about Zillow? still trending down!
You completely dismiss the fact that the Median can go up as prices are going down [$1M selling for $450k]. Prices continue to go down and we have a good explaination as to why, yet you still want to discuss a number that we all expected to have this very problem of going up when the prices are going down?
What is your angle? Just to prove your right? Why do you keep the misinformation coming?
Anyways… when you think unemployment, distressed sales, overbuilt & lower incomes lead to higher or flat housing prices…. just keep smoking DUDE!
Don’t worry I see the market has changed…. many investors especially since the 2’nd tax credit allowed for investors have entered the market. They have definately steadied the market from the freefall it was in… but not improved it. If the economy can take off… now would be a pretty good time to buy. However if the economy teeters or slides….. Reno is in huge trouble… the investors will cease and the new freefall will begin.
BanteringBear
Smarten posted:
“So let’s assume Mr. BB is correct –
No one will be able to afford to purchase residential real estate [so unit sales will plunge];
The mortgage industry will come to a screeching halt because no one will be able to qualify for a loan;”
Please refrain from the strawman arguments. They’re getting old, and have pretty much destroyed any shred of credibility you may have had. You completely made up that garbage to try to mislead people. Joke.
BanteringBear
What’s lost on you, Smarten, is that I’m not paying attention to time frames. I have never even pretended to know exactly how quickly things would play out, and I certainly don’t now given the government’s penchant for throwing money at the housing bust. I’m targeting prices. It’s no different than waiting to get into a stock. If I’m wrong, I lose. But, I’m a patient man.
bob_c
BB—
Get a skin in any game and then tell me what my future holds. Your rant is really boring.
S and P futures down 20..i’ll bet you are staying
up all night with glee (even though you own nothing), because you just thrive on others losing
wealth. That appears to be your your entire motivation.
And Smarten….you take the bait and retort to
his posts.
Either duke it out OR become roommates. We could
buy BB a home with the gate receipts if you go
the duke it out route.
bob_c
The federal subsidy has ended (Apr 30) and the stock markets are in a nasty overduecorrection or worse (destruction of wealth).
Thus the headwinds are in place against real estate. Gotta knock 6.5 to 8K off the median
(that was factored in to selling prices) and we shall see what we shall see as to whether we have
a bottom.
This is the test….right now.
Sully
smarten, you’re over reacting. This is a totally different market then that of 3 – 4 years ago. The brainless idiots are gone, the sharp pencils are in!
Remember that foreclosure I mentioned a year or so ago? I tied with another guy. Bank came back and said “Make your best and final offer”. We did, still a tie. Timestamp lost me the house by 2 hrs and 13 mins. I would have liked to cut cards instead, but hell I now have a much better place.
Houses will not stop selling, nor will mortgages stop being written. If anything, investors will step back and go neutral for awhile.
It is also highly likely that during this same time period, some of the frothy pricing will correct to an undervalued level. i.e.- A peak 1 mill house, offered at 875K and then reduced to 400K will bring out a few holdouts (trust me).
You might not like the pricing points, but sales will be there. The sharp pencils know where they stand and rarely budge up from that position.
smarten
Talk about lack of credibility Mr. BB. ANYONE [and I literally mean ANYONE] can predict nearly ANYTHING [correctly] if he/she doesn’t have to pay attention to time frames. For instance,
We’re heading for another depression. Don’t know when, but I’m sure it’s coming.
The Reno/Sparks SFR median sales price will again top $350K. Don’t know when, but I’m sure it’s coming.
The stock market will drop to 6K. Again don’t know when, but I’m sure it’s coming.
The stock market will top 15K. Don’t know when, but I’m sure it’s coming.
The question isn’t what we all now will happen sometime, it’s what’s happening now and for purposes of this blog, what’s likely in the near term future. As Lee Iacocca used to say, either lead, follow or get out of the way!
BanteringBear
bob_C posted:
“BB—
Get a skin in any game and then tell me what my future holds. Your rant is really boring…. Either duke it out OR become roommates. We could buy BB a home with the gate receipts if you go the duke it out route.”
I’ve got skin in the game, bob_c. I’ve posted that before. Who the hell are you, anyway, besides some disgruntled builder sitting in your lazy chair whittling, waiting in vain for the boom times to return?
Duke it out? Thanks for the laugh, bob_c. I’ve been on a construction site a time or two, and that sounds just like something a washed up old builder would say, unaware of the reality surrounding him. Dream if you like, but I’d stack you guys up like cord wood.
BanteringBear
Let’s talk about credibility, and time frames, Smarten.
“smarten said,
in May 24th, 2010 at 9:30 pm
Zen –
Don’t know if you’ve been following mortgage rates, but they’ve been edging down [at least for conforming loan amounts]. And interestingly, the spread between 15 and 30 year fixed rates is between 5/8%-3/4% with 0 points.
I heard a report on the news this morning that mortgage experts expect the 30 year owner-occupied conforming 30 year fixed rate mortgage to again hit 4.5% later this summer.”
“smarten said,
in December 21st, 2008 at 8:29 am
“…I would suggest we’re currently planting the seeds for hyper-inflation – and that means a return to 20% mortgage rates. In that type of environment, there’s no way real estate prices will increase; let alone above the rate of inflation.”
So, Smarten was talking about “hyperinflation” a year and a half ago (and longer), warning of oppressive borrowing rates, yet he’s currently trumpeting historically low interest rates. Huh? Where’s that hyperinflation that you were yammering on, and on, and on about, Smarten? Where are your time frames for all of this, huh? And what was my argument against your “hyperinflation” nonsense at the time? Deflation. Why are rates still so low? Deflation. Take a good look in the mirror, pal. You don’t have a clue what you’re talking about.
smarten
I stand by the hyper-inflation call Mr. BB. As you know, it was a LONG TERM call and we’re not there yet.
I’m over joyed at what is happening in the residential mortgage market. You’ll recall that when I purchased a year ago, we had a discussion concerning mortgage rates and what I should opt for. At the time you’ll recall I was offered a 6.5% fixed rate mortgage and I turned it down [against the recommendations of several on this blog]. Now it looks like I’m going to be able to lock in something in the very low 4% range [or maybe even 3.875% if I get really, really lucky (I’ll be sure to let you know when I do)]. An historically low fixed rate mortgage while future rates go through the roof because the Feds have dumped so much money into the financial system; another no brainer Mr. BB.
BTW, you claim to be a Washington State property owner. Do you have a mortgage or did you pay all cash [kind of a dumb question, don’t you think (but I wanted to extend you the benefit of the doubt)]? Assuming the former, what if anything is Mr. Savvy doing to lower his debt servicing [which I guaranty you is more than it could be with a targeted refinance]? Or is he sitting on his rocking chair spewing more pot shots because others do while he criticizes?
As I said, lead, follow or get out of the way!
BanteringBear
I don’t believe you answered the question, Mr. Narcissist.
bob_c
These are extreme times….we could deflate or hyper-inflate. If you can make this call you’ll
be wealthy in the bond or commodity market. It really superceeds everything IF we go to either extremes. Each arguement has merit and I’m on the
fence.
bob_c
“Stack me like a cord of wood”
Only on the internet do pansies dish out threats.
BB is losing it and I think this website is in jeopardy due to the petty soap opera infesting it.
inclinejj
Hey Smarten
You are like Geraldo Riveria. You ask the tough questions!!!!!
Move to Reno?
bob_c, nah, folks eat this sort of banter up like buttered popcorn during an exciting theater movie. They love it.
billddrummer
To M2R,
I think it’s petty and a waste of server space.
But that’s just me.
DWhite
Smarten would win in the first round because Bear would submit himself by hyperventilating. The only known fight stoppage by self-submission in the history of Ultimate Reno Realty Blog.
DownButNotOut
As long as you talk about them they’re happy. Don’t worry about content, just don’t ignore them. This is their theater.
smarten
How come no one pays attention to me?
Only kidding!
Have fun guys [and gals] at my expense.
DownButNotOut
TICKETS, GET YOUR TICKETS! Come one come all! Get your seats, get your tickets! In the left corner, spry, sassy with a sense of humor – the Incline combine -known for his stamina – Smateeeene!
In the other corner – weighing in with more baggaage than Southwest carries on there local flights for free- the mouth of the Northwest -Banterrrrrrring BBBBBBear!
Lets have a clean bout boys… step to the line and come out and … uh well with pencil in hand and start scribbling! I guess anyway.
LikeBigBottoms
Bottom? Yes, must be bottom….
http://www.google.com/hostednews/ap/article/ALeqM5jfUWTT51JjdBvNwgqAXDPT0Qw1YQD9FTUUS00?source=patrick.net
“‘I’m worried still about the risk of a double-dip,’ economist Robert Shiller said in an interview.
The month-to-month drop from February to March marked the sixth straight decline. Prices in 13 of the cities fell. Only six metro areas recorded price gains. One, Boston, came in flat.”
MikeZ
[skeptical] “For those out there who have stated that unemployment doesn’t matter”
Sigh. There you go again, skeptical, erecting a strawman argument, only to refute it.
NO ONE claimed unemployment doesn’t matter!
You’re arguing with yourself.
skeptical
MikeZ,
Please refer to your post of 21 May wherein your refer to SaneEconomist’s post highlighting unemployment concerns as demonstrably ridiculous.
Please do demonstrate. OBTW, what’s your level of education? What’s your level of mental health? I apologize if you’re a bit sick and my logical posts are exacerbating your condition. Best wishes.
MikeZ
[smarten] “We’re heading for another depression. Don’t know when, but I’m sure it’s coming.”
An almost PERFECT impression, smarten … but one thing is missing: personalized attacks. Start using derogatory nicknames for anyone who disgrees and constantly tell them how stupid they are.
MikeZ
My “level of mental health?” You’ve jumped the shark, my friend. Cool off, skeptical, and come back when you’re feeling better.
That was beneath you.
bob_c
two days ago we were headed to depression/deflation and but oil reflated $5/barrel and everying is rosy on wall street
the daily over-reactions