September median sold price, units, DOM, $/sq.ft.

15 comments

1. 

   October 9, 2011 at 7:43 AM

   Sully

   Guy, when you put this info into a chart the Aug pr/sq ft is the aberration, not Sept. The Sept number is only slightly lower than the current trend line which could be explained by the increase in REO sales. According to the chart, this market has been trending down since Apr/2010 after having gone flat during the previous year. Jan and Mar 2010 were exceptions.

2. 

   October 9, 2011 at 9:44 AM

   bob_c

   This was a BAD monthly report.
   It is only logical that the lower priced homes would have a lower pr/sf. The local comps that I follow are weak and on the verge of rolling over. The backdrop of a 4 year recession with little prospect of improvement has the Macro picture for the entire country in jeopardy. The stock market is on the verge of a crash and FED has instituted ZIRP, POMO and QE1,2 and twist to thwart a Japan-style asset collapse/deflation. The more probable outcome is a slow decay, but if the national market crashes I am seriously considering exiting the current 2% 5/yr brokered CD market and becoming a landlord. Have already contacted a trusted friend to manage potential properties. With the demographics and globalization, these are unique times we live in.

   I sincerely hope we do not crash, but one has to be prepared.

   On a separate topic, why doesn’t Reno condem the entire downtown (sans a few historical buildings ) ? The core downtown is a LIABILITY to the area and is holding Reno back. Until that decrepit area is dealt with, Reno will never reach its potential.
   I understand one just can’t condem in one fell swoop, but there is policy to weed out the seedy properties one by one and eliminate them—but the leadership fails to act.

   My 2 cents on Sunady morning. Go niners!

3. 

   October 9, 2011 at 10:07 AM

   Tom Joad

   20% of sales are for $100K or less.
   50% are for $150K or less.
   70% are for $200K or less.
   Almost 90% are for $300K or less.

   I laugh when I hear people say that a $300K house in Reno is mid-range. $300K now is the high end. It is interesting to observe how much resistance there is to people recognizing that the housing market in Reno has returned to its working class roots. $150K is right in line with Reno’s median household income.

4. 

   October 9, 2011 at 6:50 PM

   GreeenNV

   Just curious, Guy, if it would be possible for you to dig into the median and $/sf based on REO, Short, and Equity sales status. I have a a sneaking suspicion that there will be a pretty wide divergence.

   Older houses, we are back into the ’90s. Condos back into the ’80s and beyond. Newer places are trying to find a level, but the banks keep going lower and lower.

5. 

   October 10, 2011 at 9:19 AM

   Reno Ignoramus

   I don’t think there is any question that the median and $/sq.ft. for REOs are less than for equity sales. That is why this market is never going to get healthy until the foreclosures abate and the supply of REOs dries up. And 1,300 NODs in the last 2 months is not a good sign for this market. There is no way to put a happy spin on that.

   The banks are in complete control of this market. They have direct control over 7 out of every 10 sales. They control the number of NODs that are recorded, they control the number of NODS turned into NOSs, they control the number of NOSs brought to the courthouse steps, they control what the prices are at the courthouse sales, they control what they will accept in a short sale and thus control whether a short sale can happen at all, and they are setting the market in the process of all of this. Only 3 out of 10 sales are not directly controlled by the banks, and those 3 out of 10 sellers are selling in a market where the current comps are being set by the banks.

6. 

   October 10, 2011 at 9:29 AM

   Guy Johnson

   GreeenNV,
   I have broken out September sales by type and shown the sold price per square feet for each type – See below. I have performed this exercise separately for site/stick built houses and condo/town homes. Keep in mind that the monthly data for condos is quite thin – 84 condo sales in September compared to 547 houses sold. What this means is that when I pull data on condos sold as short sales in September, for example, I get 19 units sold. So take the numbers below with a grain of salt.

   Site/stick built median sold ppsf (September Solds)
   all types: $83.73/sq.ft.
   bank-owned: $72.52/sq.ft.
   short sales: $87.16/sq.ft.
   equity sales: $101.68/sq.ft.

   Condo/townhouse median sold ppsf (September Solds)
   all types: $51.75/sq.ft.
   bank-owned: $42.45/sq.ft.
   short sales: $37.09/sq.ft.
   equity sales: $86.98/sq.ft.

7. 

   October 10, 2011 at 9:30 AM

   Newell

   Guy maybe you could also tell us what the median asking price is for REOs? I suspect that RI is right that the median sales price of REOs is lower than that of equity sales (both in general and on a $/sq.ft. basis) because I suspect the asking price of them is lower. If you start out lower you are going to end up lower. Just a glance at the MLS listings indicates that most of the REOs are at the bottom of the price range and become fewer in number as one moves to higher priced houses. Yes there are some REOs in the higher price ranges, but mostly they are in the lower price ranges.

8. 

   October 10, 2011 at 9:43 AM

   Martin

   I think sometimes we say the same thing over and over again on this blog. For at least the last 3 years , maybe more, many people here have observed that having 70% of all sales being distressed is not a healthy market. When the banks directly own 38% of all houses sold and can directly control the selling price of another 30% of all houses sold, it’s hard to say that we have a healthy market.
   Maybe somebody will point out that when 70% of all sales are distressed, such sales produce very few move-up buyers, which also does not make for a healthy market. O wait! I think we’ve had that conversation here before as well.

9. 

   October 10, 2011 at 9:46 AM

   Guy Johnson

   RI and Newell, you make excellent and valid points. I covered this topic in more detail in a post earlier this year – See Price per square foot not equal across sale types.

   Newell in response to your request I’ve pulled the September’s median sales price by sales type:
   bank owned: $123,000
   short sales: $153,000
   equity sales: $177,750

10. 

    October 10, 2011 at 9:51 AM

    Ciphers

    I remember the last time the market “bounced along” a steady median price for several months, and many said that was surely the sign of the bottom. That was just before the median sales price proceeded to drop by another 17% as I recall.
    Now if the median proceeds to drop another 17% from here, that would bring it to 77% down from the bubble high.
    And that, of course, is absolutely impossible.
    Right?
    That only happens in Las Vegas.
    Right?

11. 

    October 10, 2011 at 10:49 AM

    bob_c

    Previously posted on wrong heading, but I thought July 2011 median was 149,950 in above chart.

12. 

    October 10, 2011 at 10:56 AM

    bob_c

    Now, the buyers in the last two years are marginally underwater—so there has been no cleansing of the market, where new buyers remain even or gain equity. The new buyers are now slightly distressed ….. so how could prices ever rise?
    A. A crash
    B. Inflation

13. 

    October 10, 2011 at 7:28 PM

    Sully

    The comment by RI, got me to thinking – so I did some research. About two years ago HUD announced a program to sell any of their REO’s to local housing authorities for $1 if it went six months without an offer. Not much has come of that until recently. Reno Housing Authority has purchased three HUD houses for $1 in the past couple months.

    One – 910 SBRAGIA WAY – was bought for $1 and re-sold the next month for $58.000 to Wood Is Good LLC. Another was 3967 Spruce Trail, Sparks.

    http://www.zillow.com/homedetails/3967-Spruce-Trail-Ln-Sparks-NV-89436/83929533_zpid/#{scid=hdp-site-map-bubble-address}

    Looks like the banks are in for some real bottom line competition in the near future.

14. 

    October 11, 2011 at 4:15 PM

    Carney

    I agree completely with RI that until the foreclosures end (and is there any indication, anywhere, that is close to happening?) the Reno housing market will not get off the mat. I would also add that the housing market is not going to show any real signs of life until the unofficial unemployment rate of 20% in Reno goes down. Way down.

15. 

    October 11, 2011 at 10:31 PM

    Walter

    Carney I assume that what you mean when you say “signs of life” is some sustained upward movement in median price. In terms of sales volume, the market has been pretty darn lively. But that activity has not translated into any upward movement in sales price. A lot of activity, not much movement.