[The commentary and charts below are provided by Erin Schiller, Regional Sales Executive, Ticor Title Company –Ed.]
Notice of Defaults increased slightly, Notice of Sales and Trustees Deeds decreased in January. Ticor has been doing some research on the Notice of Default filings and has uncovered some information regarding the Notices of Default recordings for the last few months. We found that many of those who are defaulting on their mortgage haven’t made a payment for years. We found quite a few from 2008, 2009, 2011 etc. What does this mean? There are homeowners that could have been in the mediation process or foreclosure alternative process, or the banks have now been able to catch up with their paperwork and are now able to foreclose. This was eye opening. Remember Shadow Inventory? This is an example of shadow inventory discussed years ago. There were 3 different types of shadow inventory. The first shadow inventory, was properties that the bank owned and haven’t put them on the market; The second is properties that are in the foreclosure process and will either be short sold or purchased at the court house steps; The third is properties where in homeowners haven’t made their mortgage payment and the bank cannot foreclose because they can’t find their paper trail or because of legislative changes.
[Click on the chart below to enlarge. –Ed.]
Resale and Refinance transactions decreased significantly in January. This is a normal trend during this time of year. For January, the Resale transactions that were cash, decreased to 24.73% from the 26.27% we had in December. New Homes only increased by 2 from December to January. We see a lot of homes being built, but they are not in the price point that the first time home buyer can afford. Builders struggle to find land, water, good subcontractors and workers to help with the increased demand of homes. That is why they are selling one at a time instead of in the early 2000’s when they could build multiple homes at the same time.
For the Reno/Sparks market, the Median Sales Price for stick built homes decreased to $277,000 in January according to the Reno/Sparks Association of Realtors®. As mentioned before, buyers are still holding for affordable properties and are not making quick decisions because of the lack of inventory in specific price points. Sellers are still overpricing their homes and we are continuing to see some price reductions. Real Estate Agents and Lenders have told me they have a list of qualified buyers but there isn’t any inventory for their price point and their buyers will only buy the right home, in the right location, for the right price. Agents are telling their buyers to be available any time of the day and be ready to make an offer in seconds if they want to get an accepted offer. There are many homeowners who want to list their homes but they can’t find a home to move to, so they can only be patient and wait for the right time. With increased demand and not enough supply, our industry is concerned that we could head into another housing bubble.
After attending many forecasts the past month or so, the overall consensus was to not get too excited about the TESLA affect. We still have an inventory and affordability issue. Most of the companies that are coming in to the market to support Tesla have employees who cannot find or afford homes in our area. At the BANN Forecast, many mentioned that we need builders to build homes in the $250,000 or less range. It was also mentioned that there are many companies coming to support TESLA, so we need to focus on them as they come into our market in the next few years. The biggest concerns that are hovering over us –infrastructure and housing. Predictions are that 2016 will look similar to 2015 in the housing market. Commercial market is very healthy and very busy in most sectors.
[Click on the chart below to enlarge. –Ed.]
Related post: Washoe County insured recordings statistics – December 2015
