Market Condition Report – January 2010

Market Trends by Guy Johnson

Thank you to our friends at First Centennial Title for providing January’s Market Condition Report below. Click on the report to enlarge.

From January’s report:

  • OVERVIEW: Activity is greater than the same time period last year, but continues to slow relative to other market areas. SFR closing price posted a $7K loss while Condo prices continue especially weak and declining. This trend supports the notion that residual weakness in price is still present in the market (especially for Condo). In most Western markets, prices have stabilized with upticks occurring with greater frequency. Median price estimates can vary significantly from month to month. In the Reno area, median price estimates are fluctuating and converging on a minima, which may have already occurred or is within a reasonable point close to the current values.
  • SUPPLY (ON MARKET): SFR up +218 units from last month offsetting last month’s supply decline. Condo little changed.
  • DEMAND (SOLD PER MONTH): Demand decreased slightly for SFR. Condo little changed.
  • FAILURES (EXPIRE-WITHDRAW): SFR and Condo rising moderately in the current range.
  • IN ESCROW (FUTURE CLOSINGS): SFR inventory in escrow holding at current levels. Condo up 8 units. This points to a slow and rising demand schedule ahead (closings).
  • PERCENT SELLING: Steady with a positive propensity in the current range for both SFR and Condo. In general, Reno area Percent Selling lags other areas surveyed (Las Vegas, Phoenix) by about 10 points.
  • MONTHS SUPPLY: This key measure is holding steady for both types signaling demand/supply realties are not shifting significantly.
  • MARKET SPEED: The pace of the Reno market is beginning to rise ever so slightly. The best performing Reno sub-market remains the perennial favorite, Fernley SFR, returning a Market Speed of 35 (-1 from last month). The slowest is Yerington SFR at a very sluggish 11 (+2 from last month).

 

Past MCR reports:

14 comments

  1. billddrummer

    If the median closing price maintains a gap of 18% or so from the median asking price, could you infer that asking prices have stabilized?

  2. skeptical

    Slightly different question from BillD, with an 18% spread between list price and close, would a prospective buyer be foolish to offer any higher price than 20% off the list?

  3. billddrummer

    To skeptical,

    Great question, and goes back to what we were saying about the $400,000 offer on nvmojo’s rental. Starting at 25% off the offering price seems about right, especially since there are precious few buyers who can qualify for purchasing $400,000 homes.

    It may be harder at lower price points, but I think above $300,000, a 20% opening haircut makes good sense.

  4. BanteringBear

    There are so many properties riding the mls at peak bubble prices that it boggles the mind. When somebody is listing a property at double the current market value, there’s no point in looking at it much less making an offer. What’s going on in the listing agents mind is anybody’s guess. The spread between list and sale doesn’t even factor in the original price. People still don’t get it.

  5. Reno Ignoramus

    Exactly right, BB. The spread between the ORIGINAl asking price and final sales price is in most cases a lot more than 18%. A lot more. We used to have this discussion with Diane all the time. In many cases, the spread between the final sales price and the original asking price was more like 35-40%.
    Given the absurd asking prices of many houses on the MLS today, especially over $400K where the delusion still runs deep, only a fool would offer 18% less.

  6. smarten

    Correct RI –

    Which is why I was always disturbed to see final sales prices as a percentage of asking, represented to be in the neighborhood of 95% or more.

  7. John Newell

    Somewhat off topic:

    Once a week or so, I check new MLS listings for four bedroom houses. Some time back, I stopped filtering the result for price as I wanted to have a better gauge of the market for four bedroom SFRs as a whole. This week marked a new low as far as I can recall. Meet MLS# 100002038.

    Make no mistake, this house is a disaster in a horrible area (from the listing pictures, it appears everything of value was stripped from inside the house). What is interesting is that at $45,150, it is listed at $29,949 less than its purchase price in 1988 (and no, that is not supposed to be 1998); furthermore, it is listed at $130,800 less than the $175,950 mortgage taken out on it in July of 2007. Why Wells Fargo would lend $175,950 on this property in mid-2007 when the market was already declining is beyond me.

    While I am usually sympathetic with the position that walking away from an upside down mortgage is an acceptable business decision in many cases, I am somewhat disturbed that the homeowner in this case seems to have gained a rather sizeable windfall.

  10. billddrummer

    To nunzio,

    It’s twue, it’s twue! (homage to Blazing Saddles)

    But aside from that,

    Pain is in the offing, and it will get worse.

  11. skeptical

    85 price reductions in the last five days. I watch this regularly, and the average is typically 40-60 reductions in a 5 day period.

    Prices still too high.

    And the hits just keep on coming….

  13. skeptical

    Over to the right on the RRB page I notice the article reporting that the NAR is lobbying to get the 1st time homebuyer’s credit extended through 2010. Why am I not surprised?

    http://www.inman.com/news/2010/02/22/nar-keep-tax-credit-through-2010?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reindustrynews+%28Inman+News+Industry+News%29

    Here’s a bold prediction: the credit gets extended through 2010. Congress is bought and paid for. I would be shocked if it violated the wishes of its corporate masters…

  14. Kelly McMicken

    Getting a Property Condition Report when buying property is very important for buyers in today’s market.

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