I received an email yesterday from a colleague at Chase International. This agent had been taking a look at the re-sale markets in Montreux and ArrowCreek, and thought I might be interested in her findings. I was, and asked if I may post her email on this blog and she replied, “I would be flattered.”
In fact, because I was going to post her numbers, she confirmed them this morning. This agent’s email follows…
It’s happening… Montreux is now in the thick of our housing recession. Remember there are only 201 homes in Montreux:
33 are on the market – 17% of all homes
7 are short sales (although 1 says “yes-other” with no explanation)
1 bank owned
That equates to 24.2% of the listings as distressed! (price range from $1,075,000 – $1,499,000; the bank owned is $999,999, so essentially all are $1 mil+)
4 are in escrow (3 are shorts)
However ArrowCreek still has it beat (sort of):
56 active listings – approximately 6% of all homes
12 are short sales
7 are bank owned (although 1 says “yes-other”)
That equals 34% of the listings as distressed
However, of the 16 listings over $1 mil, only 1 is distressed and
Another statistic that is interesting:
of 201 homes in Montreux, 8 are distressed, or 4%
of 852 homes in ArrowCreek, 19 are distressed, or 2.2%
So, in that respect, Montreux is in worse shape. (I need to confirm the exact number of homes in each, but I think I‘m close)
[Update – Here are the confirmed numbers:
Montreux:
201 SFRs
234 vacant SFR parcels
ArrowCreek:
852 SFRs
205 Vacant SFR parcels]
Benny
What’s the intrinsic value of the paper some advocate you stuff under the mattress? The US dollar has lost 95 percent of its value since the creation of the fed in 1913. Meanwhile, one ounce of gold bought you a finely tailored suit back then, and it’ll buy you one today.
Who agrees? Well go back 5000 years to the ancient egyptians, 2500 years to the greeks, 2000 years to the Romans, or today to 2.5 billion Chinese and Indians.
Has there been much inflation in the last ten years, as gold has quintupled in value?
Love all the gold haters. Lets me know my investment is still safe and on the increase.
…or you could just buy a depreciating piece of crap in Sparks….
Smarten's Vanishing Equity
I’d actually rather buy a piece of crap house in Sparks right now, than gold. While house prices are still falling, the house would provide me shelter. Gold is clearly in a bubble, and to buy now is buying at the top- similar to buying a house in 2005. Everybody is yammering on about gold. The other day, I happened upon a guy who was complaining about the government dragging its feet on his mining claim. He’s setting up a sluice box or some such.
Inflation? Hah! It’s deflation right now that’s the big concern. I look for gold to get throttled as soon as people start running for the exits. Lots of future gold bagholders out there.
MikeZ
[Sully] I guess houses, cars and stocks are worth more than people are willing to pay!
It’s hard to tell if you’re being sarcastic these days, what with the end-of-the-world coming, but yes, Sully, this is why items like home median prices correlate to median household income.
Don’t agree? Tell me the correct price for an ounce of gold and why it’s the correct price.
MikeZ
[Benny] What’s the intrinsic value of the paper some advocate you stuff under the mattress? The US dollar has lost 95 percent of its value since the creation of the fed in 1913.
The value of the US currency is based entirely on faith in the United States, so I think we *agree* on that.
But the dollar “has lost 95% of its value” is a misleading, disingenuous argument. For those who stuffed their cash in a hole in 1913, or under their mattress, yup, they’re boned. 95%? Ok, sure, I can believe that.
For most everyone else, investments and assets (e.g.: housing) that grow at approximately the rate of inflation over the long term are plentiful and they’re just fine.
Gold has its place (better for burying than ca$h) but understand that it’s only worth $1,200/oz because someone’s willing to pay that much. In 5 years, it could drop 50% to $600/oz, just like housing!
Sully
MikeZ; I couldn’t tell you the correct price/oz of gold anymore then you can tell me when brainless Ben is going to take his finger off the print button. I like gold for its value in preventing central banks from counter fitting the currency. If we were still on a gold standard we wouldn’t be in the financial mess we’re in now.
Getting back to your first statement, nothing is worth more then people are willing to pay. Why single out gold?
Ben B.
Mike Z,
I’d like to thank you for your support of the fiat currency known as the US dollar. If it wasn’t for people like you, comparing gold to tulips, and ignoring 5,000 years of history, it would be very difficult for the Federal Reserve to continue to perpetrate this fraud on the American people.
Decades of conditioning have taught people like you that inflation is good, and in order to combat it one must continually make riskier and riskier bets. This is by design, and it’s been extremely successful.
As the wealth of the American people is stolen year after year by a private cartel of banks it is critically important that the conditioned masses are trained to accept it. Otherwise, the scheme comes to an end.
Once again, to all of those who ignore history, ignore the fact that our currency has been completely decoupled from gold in 1971, who ignore the fact that the Federal Reserve has never been audited, and who continue to accept the myth that the Federal Reserve is doing anything but steal the wealth of the American people, I’d like to say thank you.
Doug Brown
Guy:
Good information, but, I think the real question becomes, what number of months/years does the current inventory represent? Restated, based on actual sales this past year at both Montreux and Arrowcreek, and the cureent 33 and 55 levels of inventory, how many years of inventory does each community have on hand?
CommercialLender
Smarten,
I’ve been struggling some time with your quandry “if [median home prices are] not an effective means of tracking the Reno/Sparks residential sales market as a whole, then what other objective data is?”
I don’t know how to obtain this data via research, but total cash invested into SFRs would be a metric to point to whether values are rising or falling.
Seems to me, if you multiply the average SFR cost times the number of homes sold in the Reno/Sparks area on a per month basis, you could ascertain generally if cash is coming into or leaving the market, thus in general you’d point to values increasing or decreasing. This does not necessary say ‘average home prices’ are the metric, but total value of all transactions done. Variables such as new homes produced, homes removed from the stock (say via fire or land use change), lending, jobs, specific homes in specific ‘hoods, and even tax credits all have only indirect effect on this total cash flow metric.
I may be all wet, so feel free to pick it apart.
inthebusiness
In answer to your question, there have been 47 sold properties in ArrowCreek since 1/1/10 which represents 9.5 months of inventory currently on the market.
Montreux has had 10 sales since 1/1/10 equating to 26 months of inventory on the market.
Regarding Somersett (area 122), there are currently 87 homes on the market:
8 bank owned
3 Fanie Mae or Freddie Mac owned
38 Short Sales
1 being sold by relocation company
37 have no special conditions of sale
So, Somersett’s percentage of distressed listings is 57% compared to ArrowCreek’s 34% and Montreux’s 24%.
There have been 97 homes sold in Somersett(area 122)since 1/1/10 which translates to just 7 months of inventory currently on the market.
Cousin Itt
How confident can you be in Montreux when the developers are bailing on their homes there? Todd and Stan each have NODs, and Sam has listed his home at a loss. Could Montreux be the next Northgate?
Nightmare Scenarios To Watch For When Buying A House In 2011 - Colorz.tv
[…] 1. You buy in a neighborhood that is somewhat upscale, but half the people are living there without paying their mortgages. That is one frightening thought. In beautiful Arrowcreek in Reno, it was reported some time ago that 65 percent of the homes were in pre foreclosure. But some people may have been living in this upscale community for many years without paying their mortgages because I haven’t seen many foreclosures as I researched for housing bubble articles there! And a little birdie has been chirping in my ear about this very scenario! There are just a few for sale in the community, and people must come in from California thinking it is a stable community and pay pretty hefty prices still. But what will happen down the road? Maybe it is a stable community and maybe it isn’t! […]
kw-agent.net » Blog Archive » Nightmare Scenarios To Watch For When Buying A House In 2011
[…] 1. You buy in a neighborhood that is somewhat upscale, but half the people are living there without paying their mortgages. That is one frightening thought. In beautiful Arrowcreek in Reno, it was reported some time ago that 65 percent of the homes were in pre foreclosure. But some people may have been living in this upscale community for many years without paying their mortgages because I haven’t seen many foreclosures as I researched for housing bubble articles there! And a little birdie has been chirping in my ear about this very scenario! There are just a few for sale in the community, and people must come in from California thinking it is a stable community and pay pretty hefty prices still. But what will happen down the road? Maybe it is a stable community and maybe it isn’t! […]