Foreclosure activity in June stayed steady with May’s numbers. NODs fell to 638 from 639 in May. NOSs rose a bit to 600 from May’s 582. TDs fell to 294 from 327 in May, about a 10% drop. 15% (43) of the TDs were to private parties, way above the 2-3% we were seeing a couple years ago.
84 properties were scheduled for the courthouse steps last week. 19 were canceled, 54 were postponed, 11 went back to the bank, and none were purchased by third parties. The shadow inventory continues to grow.
If you follow Page Ventures NRES, I’ve updated their June activity here. June activity is in purple. They bought 4 properties and sold 6 vs. bought 10 sold 8 in May. Page NRES had been selling on about a 43% gross margin, but June sales were at a 25% gross margin. One was at 11%, which most likely represented a loss. 649 Alpine View in Incline, which they bought for $658,750 in October, has been reduced yet again to $699,900 which will be another loss. You can’t bat 1000%, but it certainly looks like the margins are tightening.
Somersett Town Center received a NOS late this afternoon. The Rock Church received theirs earlier in the week. 2747 Mayberry received a Notice of IRS Auction last week. For those of you who like to data dig, this one has quite a history. You will see why I haven’t posted anything on it!
Hey, congratulations to Chase’s own Michelle Plevel on being named a mediator on the Nevada Supreme Court”s Foreclosure Mediation Program.
There were a couple comments about this on another thread, but 6001 Talbot did in fact list for $75,000,000 this week. That’s not a typo. 36,000 SF and 150 acres, the John Harrah estate is probably the largest house in Reno. The Assessor has its tax base as $10,720,763 (an argument for changing our property tax system?). By comparison, all of Harrah’s Casino downtown has an assessed value of $58,716,936. I guess this one won’t be affected by the expiration of the $8000 tax credit.
I got lazy and hadn’t checked my credit reports in a while. Big mistake – California hit me with a $6000 tax lien! It is bogus (I hope), I haven’t lived there in over 5 years, have never been contacted about it, but there it was for all to see if I was trying to do a refi or buy a house. CHECK YOUR REPORTS. You can go to the government mandated site Annual Credit Reports and receive your free credit report from each of the big 3 reporting companies (Trans Union, Experian, and Equifax) once per year. It used to be torture to dispute an item, but you can now do it painlessly online (at least on Experian). I’ll let you know if my file gets corrected of if I end up in jail! Seriously, protect yourself by keeping you credit file as accurate as possible. Anyone else have horror stories?\
I run a lot of numbers, but in the end my market opinions are emotion based. I see a lot fewer parched earth lawns than a year ago when I drive around the NW. Prices are looking attractive to me with rent/buy actually favoring buy for the first time in memory. The interest rates right now are below anything I have ever seen. All the tea leaves look good. But in my gut I am feeling very, very sketchy.
Sleezy
I guess we had better buy now or regret it forever ! 🙂
E.Edward
Rest assured cupcakes,
The mood concern will quickly change from….If prices will continue to plummet to how far they will plummet?
Take a good look around…..The fed pulls out and everything starts to collapse.
No rocket science necessary, This thing proves itself…Ya-gonna need 2-3% rates+help to keep this lead balloon afloat.
Buckle your seatbelts….Down we Go!
of-course just my thoughts.
Sleeezy
Am I crazy? Wait – who said that? Crazy like a fox maybe. Or…. did you here that? What you people don’t understand is how smart I am. I also have cash. It’s still King right? Wait… I’m the King, king of real estate…. yeah that’s it… thatt’s the ticket. Why am I slobbering….I still have my rental condo right?
Sleezy
I still have all the money left over from my previous sale don’t I ?
My cash still buys me more house every month doesn’t it?
I don’t have to worry about interest rates do i ?
Time is on my side isn’t it?
Real estate is headed nowhere fast right?
longerwalk
Even though the real estate stats have the appearance of a bottom–as in the drop has slowed/stopped–there are many economic factors the stats don’t capture until months later, i.e., unemployment, and state/federal deficit spending that will have to be made up through taxes or even tighter spending. If there’s a recovery underway (I’m doubtful), it’s precarious at best, which warrants a healthy dose of care in any major financial transaction.
Randy Vanderpool
Thanks for the reminder to check our credit. It’s been a while for me too. Hope sales start heating up in Reno soon!
MikeZ
[longerwalk] “there are many economic factors the stats don’t capture until months later, i.e., unemployment, and state/federal deficit spending that will have to be made up through taxes or even tighter spending.”
First of all, state/federal deficit spending has no measurable impact on housing prices.
Unemployment … unemployment will have some affect on housing prices, and that affect can indeed lag by months … but (maybe I missed a labor report?) hasn’t unemployment also stabilized in the Reno/Sparks/Tahoe area?
Sleezy
No… Unemployment just recently went from13.5% to 14%
i wouldn’t call that being stabilized…
Ofcourse since people who have given up on looking for a job aren’t counted.. The unemployment is most likely closer to 20% in the Reno/tahoe/sparks area
longerwalk
State/Federal deficit spending RECOVERY will have an effect–very likely taxes. When’s the last time there hasn’t been a deficit at the Federal level–even in boom times? I’m not insisting the sky is falling due to deficits, but there’s no willpower/stomach among the pols at all for reasonable controls. Therefore, us beneficiaries of that largess (read: the populace) will have to start paying the bill sooner or later.
I also agree with Sleezy on the real unemployment level. Have you had a look at Record St. lately?
Irv
A comment said that
“…since people who have given up on looking for a job aren’t counted… The unemployment is most likely closer to 20% in the Reno/tahoe/sparks area.”
I think this is likely an accurate remark, especially if you consider that part-timers are considered “employed” for federal statistical purposes–even if they work only a small number of hours per week. Also, if they are working two jobs to survive, possibly two part-time jobs, that counts for federal statistical reporting as if it were two employed people, not as one under-employed person.
The federal government has this interesting habit: if you cannot solve the problem, just play with the definitions, and the statistics will become adjustable.
sleezy
well… when the economy loses jobs and the unemployment rate goes “down” it doesn’t take a genius to figure out why Reagan decided to change the way the gov’t calculates the unemployment rate…
you are 100% correct about the part-timers as well Irv..
Another Reason why you can’t always trust the numbers Mike
Reno Ignoramus
“when was the last tme there hasn’t been a deficit at the federal level?
In the last year of the Clinton Administration, the year 2000, there was a surplus. The federal government actually took in more than it spent. The gov’t was even buying back some long term treasuries with the surplus. In other words, the government was actually reducing the national debt when Clinton left office.
It didn’t last long. Mr Bush took office in 2001 and immediately moved the country into deficit spending. Recall Mr. Cheney’s memorable statement that “deficits don’t matter.” Mr. Obama has continued the practice.
Sleeezy
Deficits, smeffisets. Who cares.I know all, see all and every other opinion concerning real estate is bogus. I still have my cash -see? I still am smarter than all of you – see? I’ve bought low sold high and the rest of you are just jealous – don’t see? I’m not slobbering now! Thanks for listening. Ed
Crap I’mean Derrik.
Why doesn’t anyone listen to me? Hellooooo…?
Reno Ignoramus
Allow me to anticipate the response that the Clinton Administration did not REALLY have a surplus because of the impact for the so-called “off budget” items. Fair enough. But every President since Mr. Nixon, in collaboration with every Congress since Mr. Nixon, has played this game of hide and seek. Within the confines of the game played by every President, Republican and Democrat, over the last 40 years, Mr. Clinton was the last one to produce a surplus.
If we were to include the amounts owed on “off budget” items as part of the national debt, the debt would not be just $13 trillion, it would be some staggering amount, something incomprehensible. No use in telling the truth about that.
Col.Sam
RI,
The unfunded libility for Social Security is about $17 trillion. The unfunded liability for Medicare is about $36 trillion. Together they total $53 trillion, and you are correct they are not included in the national debt. If they were, the national debt is about $70 trillion.
Incomprehensible is an understatement.
There is only one inescapable conclusion. Drastically higher taxes.
Remember (not so long ago) the 70% bracket for upper income earners?
It will be back, but not just for the big earners.
Sleezy
Social security has actually been running with a surplus for years hasn’t it?
HighlyTrainedRealEstateAnalyst
Bill Clinton didn’t produce anything except for a stained dress. He was benefiting from a different fake bubble called the dotcom boom. But, remember that he didn’t really run the country, and neither did Bush, and neither does Barry Soetoro.
The Federal Reserve runs this country, it controls the money supply, and it will determine all things financial: who wins, who loses, interest rates, home prices, etc. Helicopter Ben can make every home in Reno worth over a million dollars by the end of year. How? By dropping money out of a helicopter on all of his subjects.
Senator Reid just explained to his subjects that the minimum wage going up actually benefits everyone. It was a 30 second news clip, so he didn’t explain how he came up with this brilliant insight, but why stop at eight or nine dollars an hour. Why don’t we make the minimum wage $525.75 per hour, then we can all go buy that home up in IV that we’ve always wanted!!!
Sleezy
If we all made $525/hr then that house in incline would be worth 75 million…
Much like giving everyone a check for 250,000 would only cause hyper inflation.
longerwalk
I’ll chime back in here–I’m talking real money, real deficits, and no game-playing. War costs, Social Security, interest payments, everything. The kind of world where the rubber hits the road. Worked for many years in the U.S. gov’t in D.C. Saw the sausage-making first hand. The spending, too. Some of the folks there are earning their pay and working to make things better, the way you & I hope they would. Far too many do not. Same likely could be said of any gov’t level. Sad thing is, us sheep (the populace) are willing to listen to the spin, not divine the truth, and we will have to pay for it all. It will hurt, those at the bottom of the food chain the most.(BTW, Nixon said his biggest mistake was to pin Social Security raises to inflation, relieving Congress of the responsibility to look at this and vote on it every year.)
Irv
Colonel, regarding that unfunded libility for Social Security:
As I see it, there are three primary components of this “unfunded” situation.
First, all Administrations including this one have consistently borrowed those funds out for budgeting purposes and used them for other programs. What is actually in what Al Gore called the Social Security Lockbox is a bunch of I.O.U.’s for funds used for other programs. There is no true earning pot of assets in the program, just a stack of promises to repay. Somehow those funds should be repaid–BEFORE foreign aid funding, then those earmarked Social Security funds should be left alone, and there would then be a much longer predicted useful life for this fund.
Second, the parameters for participation in the Social Security program have been liberalied by politicians over the last two decades. The credit count for all participants should be tightened, some amount more in work credit units should be paid in before eligibility is attained.
Third, our life expectancies have increased but our initial eligibility age still remains dated with actuarial expectations decades old. This fact shortens the estimated life of the fund. All starting eligibility ages including early retirement should be raised by at least a year–an unpopular thought but more in keeping with current life expectancies. Those already receiving benefits should be reduced by a formula based upon their ages, until they also have contributed a catch-up portion toward such new age eligibility rules. Unpopular, yes, but better than just leaving the fund on the road to bankruptcy.
HighlyTrainedRealEstateAnalyst
Sleezy, that is exactly my point. Up until the bubble, real estate price increases have historically been a reflection of inflation. The price increases that we saw during the bubble were not real, and they had to come back in line with reality. Much like during the dotcom bubble when a company with a closet full of servers and a mediocre idea could trade for $100 a share.
Longerwalk, the deficits are real, the debt is real, but the “money” is not.
Irv, you do an excellent job of touching on the situation in your post.
Nixon took us completely off of the gold standard in the early 70’s, and the money supply has spiraled out of control ever since. Unfortunately, our government no longer needs to collect taxes in order to fund their programs as they can just print it. This is how we end up with an “official” debt of over 13 trillion, and a real debt, when calculated using GAAP, that is MUCH MUCH larger. I certainly agree that there are some good people in the government trying to correct this mess, I just hope it’s not too little too late.
And this is why predicting the real estate market is impossible, because there is no stable currency, no stable laws under which we abide, and the “value” of real estate – and everything else for that matter – will be a direct reflection of what those in power decide to do next. Laws, interest rates, money supply, wage rates, tax incentives, etc, etc, etc, …..
MikeZ
[MikeZ] hasn’t unemployment also stabilized in the Reno/Sparks/Tahoe area?
[Sleezy] No… Unemployment just recently went from 13.5% to 14% I wouldn’t call that being stabilized…
No, Sleezy, it didn’t.
14% is the Nevada statewide unemployment rate, not the Reno/Sparks rate, which is 13.3% (May) down from 13.5% in April.
Data is here: http://tinyurl.com/29rv2ky if you have your doubts.
And while the “real” unemployment rate might be 20%, that’s irrelevant, the issue is stabilization.
MikeZ
[Col Sam] There is only one inescapable conclusion. Drastically higher taxes.
“Only one?” That’s just silly.
There are many possible conclusions, the most likely appears to be means testing to reduce the bottom line cost of the entitlements.
sleezy
the real unemployment rate is irrelevant ?
the stupidest post of the year award goes to you mikez..
FYI the economy lost 125k jobs and yet the unemployment rate FELL to 9.5%
how do you explain that mike? let me guess.. more stability?
LOL
MikeZ
[Sleezy] the real unemployment rate is irrelevant?
Yes. If the published rate is essentially stable and the methodology hasn’t changed, then the actual rate is also essentially stable.
Sleezy
You obviously don’t get it mikez
Sorry, I forgot your education stopped at high school
longerwalk
MikeZ, I respectfully disagree. Please see this link to the BLS stats on unemployment, with alternate measurements.
http://www.bls.gov/news.release/empsit.t15.htm
(I need to hunt around for a longer time sequence, but it will do.)
A boat that has sunk is stable, but it’s hardly going anywhere.
MikeZ
[longerwalk] A boat that has sunk is stable, but it’s hardly going anywhere.
Maybe I haven’t been clear: I’m not saying the Reno/Sparks housing market is going up, only that local housing prices – as measured by the two best metrics we have available: median price and $/sqft – have been stable now for a year, that is, they have stopped going down.
Do we agree?
By the way, the sunken boat is an interesting and apt analogy. I like it.
longerwalk
I don’t know that we agree . . . or disagree. Frankly, my point is that the metrics MAY NOT reflect reality, because we may not be looking at the right things. If you are pointing at the ‘prices are stable’ metric as a stand alone, yes, you may be correct. But is that one metric a true indicator of the health of the market? I honestly don’t believe so, or at least I’d love to have someone who knows what they are doing slice those figures with more finesse than I currently can!
sleezy
unfortunately these metrics don’t take into consideration 20% unemployment, or thousands more foreclosures coming to a neighborhood near you REAL soon…
if anything it’s more evidence that the reno/sparks housing market is still over-valued…
MikeZ
[longerwalk] If you are pointing at the ‘prices are stable’ metric as a stand alone, yes, you may be correct.
Thank you.
[longerwalk] But is that one metric a true indicator of the health of the market?
The “health of the the market” is vague enough to be meaningless as a general evaluative metric, which is why I’ve chosen very specific indicators to address the primary concern of almost everyone here: HOME PRICES.
Is the Reno/Sparks RE market healthy right now? I would say: No.
But “health” is terribly subjective. To me, a healthy real estate market is appreciating and growing and this market isn’t.
Your definition of a “healthy real estate market” is likely different from mine, which is why statisticians wisely avoid terms as malleable as “healthy.”
longerwalk
“statisticians wisely avoid terms as malleable as ‘healthy.'”
Well, yes. I should have chosen more accurate adjectives, such as ‘growing’ or ‘appreciating’ or perhaps even ‘not stagnant in many price bands.’
I think my point is clear, however, that ‘stable prices’ is perhaps not much of indicator of anything positive.