FCT’s Market Condition Report – August 2011

Below is First Centennial Title Company of Nevada’s latest Market Condition Report. (click to enlarge)

From the report…

Overview: Both SFR and Condo supply continue very constant in the current range. This means that as properties are moved off the market by either becoming a sale pending or a failure, those properties are being replaced by new supply. At the same time, properties in escrow are holding. This implies that the level of closed demand is at or around peak values. Prices for SFR are holding steady while Condo continues to slip.

Weeks Supply Given Demand (Absorbtion Rate): The absorption rate has stabilized with little change from month to month. Tightening absorption rates signal a tighter market. However, current changes in the absorption rate are small and will only be significant as part of trend. Stable absorption rates signal no big changes are in the offing. The usual seasonal changes are just ahead.

Market Speed Index: Market speed (the conversion of listings to closings) has remained relatively constant for the last several months and is holding. This change would be hard to detect at the street level and needs to continue to become significant. The pace of the Reno area market is slow and steady with no big variations from month to month (same report as last month).

Prices: SFR prices continue steady while Condo is in decline. Prices are erratic from month to month and seem to gyrate in a narrow range (see history of median sale price graph). Note in the price graph that the tail end of the trend line shows a definite tendency to decline.

This months report also had an informative explanation regarding Days on Market: Evaluating DOM on the basis of a frequency distribution (not an average) is an excellent way to describe the reality of the market to the reader. In this example (actual results of September 2011), the average is 129 days. Most sellers fall in the range 84-174. But a significant number take inordinate time to sell. This is due to over-pricing relative to current competition, not under-marketing. The agents share the blame here by not reacting fast enough to property under-performance in the market (no showings).