Below is August’s Market Condition Report produced and distributed by our friends at First Centennial Title Company of Nevada. From this month’s report…
OVERVIEW: The market is slowing. Market speed is down. Absorption Rate is up and prices are weakening. These outcomes are in line with other areas surveyed such as Las Vegas, Phoenix and selected California urban markets.
- SUPPLY (ON MARKET): Little change. A slight increase over last month.
- DEMAND (SOLD PER MONTH): Demand off significantly from last month (82 units).
- FAILURES (EXPIRE-WITHDRAW): Marginal increase from last month (54 units).
- IN ESCROW (FUTURE CLOSINGS): SFR and Condo inventory in escrow is in slow decline. This suggests that the recent surge of closings is not
- PERCENT SELLING: Off 7 points from last month. being replaced by new escrow entry, signaling a slower or constant market. This outcome is similar to last month.
- WEEKS SUPPLY GIVEN DEMAND (Absorption Rate): Absorption Rate is on the increase. As the ratio of supply to demand increases, Absorption Rates increase and there are more units of supply on the market relative to demand and the weeks required to liquidate supply increases. Consequently, rising Absorption Rates favor the buyer and declining Absorption Rates favor the seller.
- MARKET SPEED: The pace of the market, which had been rising consistently, has peaked and is now in decline. Fernley SFR, the perennial favorite, has taken a heavy hit in the short term due to rising supply and declining demand.
- PRICES: Prices gyrating from month to month with a slight positive propensity (especially for Condo). See History of Median Sale Price Graph.
Click on the report below to access the full report (two pages).
Raymond
“The market is slowing. Market speed is down. Absorption rate is up and prices are weakening.”
Other than that, as Mike Z and Smarten will tell you, the market is stable.
smarten
No Raymond –
We’ll tell you the market as measured by median sales price, HAS been relatively stable for a year or more. Whether or not the market MAY be changing doesn’t alter where it HAS been.
Sleezy
Actually smarten .. Mikez ALSO used the ppsf for his argument of stabilization …
Should i repost his thread for you ?
Sleezy
So we have a higher supply coupled with lower demand?
Basic supply and demand tells us that we can continue to expect lower prices…
smarten
Just so we’re clear Derrick, are you saying we can expect a lower median sales price and if so, how low and when will we reach that low? If memory serves, the last time you predicted a median sales price low [was it $230K+/-?] not only were you wrong but you represented that if wrong you’d never post again.
Or are you saying we can expect asking prices in the $500K+ segment of the market [or any other segment for that matter] to be lower?
MikeZ
If memory serves, the last time you predicted a median sales price low…
Smarten, let’s go to the instant replay!
Public records show the house was bought for $269K (not $260K) and was sold for $229K in ’09.
That doesn’t include the “numerous upgrades” Derrick claimed he added, after purchase.
LOL.
MikeZ
The fellow who sold 3225 Palacio to Derrick did very well for himself:
10/21/2003 Sold $269,500
01/22/1999 Sold $182,500
That’s a sweet $87K/48% in 4 years.
just askin
Lordy MikeZ,
Why the sudden interest and long term research on Derrick?
Is the heat getting to you? Many on the blog have called you out for your illogical comments and personal attacks on others.
Maybe you can deflect the criticism by attacking Derrick, someone who hasn’t posted in that name for at least a year?
I’m not convinced that Sleezy is Derrick, but regardless, his contributions have been much more informed and valuable than yours.
GratefulD_420
No Smarten…
“We’ll tell you the market as measured by median sales price, HAS been relatively stable for a year or more.”
The median sales data has been stable for a year.
The dynamic market has not been stable.
smarten
Thanks GratefulD –
Sorry, I don’t know what “the dynamic market” is. And while you’re educating me [and perhaps others], maybe you can point to the objective data that describes/defines it? Thanks in advance for your help.
And I’m certain Derrick aka Sleezy [yes, the two are the same] didn’t have “the dynamic market” in mind when he predicted continued lower prices. On second thought maybe he did but I’m certain he didn’t know that was what he was describing.
One final observation – and this is directed to skeptical. Remember when you recently complained how you/other permabears were constantly being “lambasted” [although I don’t know by whom] for sharing your negative market views? If there’s any lambasting going on [on this blog], it’s pretty clear to me that the only recipients are MikeZ and I. Am I wrong?
GratefulD_420
Smarten,
1’st I was just mimicking you (“No Raymond.”)
2’nd I really don’t agree with your absolute measuring of a multi-dimension market with a one dimensional data point. It’s really not that simple or complicated.
Multi-Dimensional Market is based on several pieces of data and observations. Several of these are posted in the above report (they obviously think they are important).. but there can be even others added.
Supply & Demand [inventory and sales pace]
Then look at the supply closer
* REO %
* Foreclosed %
* Shortsale %
* Normal %
Then look at the demand closer
* Growing or shrinking poulation
* Unemployment (rising, falling, historical?)
* Income (average, median)
* Rentals (expensive or not, inventory?)
Again, I think the median is an important indicator but in NO WAY is an absolute measure of the market stability as you claim. It cannot possible be an absolute since it does not consider so many of the important factors of real estate. [Location, Land, Quality, Supply & Demand]
So the day you stop claiming market stabilization based soley on a stable median being your ceterpiece evidence…. I will stop “lambasting” you.
smarten
GratefulD –
Thanks for the clarification.
In no way was I suggesting you were lambasting me – it’s some of the others who for instance, rely upon dropping asking prices [compared to a year ago] for properties that don’t sell and then assert the market is falling.
BTW, I agree with you that one can’t measure the state of the residential real estate market SOLELY by resort to the median sales price. Some of the trends I think are important, and I’ve spoken of them before, are unit sales, pendings, listings, historical seasonal fluctuations, mortgage interest rates, YTD and to a lesser extent [especially where unit sales are unusually low], PPSF.
To me the number of distress sales [REOs or short sales] or shadow inventory are not relevant because as long as they don’t directly effect some of the other data I feel is relevant [and they haven’t for the last year or more], although interesting, they’re again not directly relevant. Now with a flood of distress listings [which would in my mind include shadow inventory] sure the market could be directly affected. However as long as there is no flood, although it may prolong what we’re going through, it’s not going to [and so far doesn’t appear to be] causing downward pressure on unit sales and pricing.
Population, demographics, unemployment, median household income, conforming loan limits, number of move up buyers, etc. certainly can have major effects on the market [by way of example, if the number of sales or median sales price drops specifically ecause unemployment increases, I’ll see a direct correlation between the two. But as long as I don’t see that correlation, to me it’s not relevant to the current state of the market]. But in the short run, and that’s really what we’re talking about, you need to see the forest from the trees.
Cheers!