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[UPDATE by Guy Johnson – March 3, 2010: I’ve added the monthly chart I receive from Ticor Title to Mike’s post for readibility. Click on the chart to enlarge.]
February NODs up to 931 from 778 in January. NOSs up a bit to 406 from 394. TDs down to 180 from 190 in January. I don’t know what to make of the NOD rollercoaster ride. Comments?
A couple of quick shots:
– The hottest property in Reno so far this year turns out to be the Grand Sierra Resort! 13 resale units have closed so far, with prices ranging from $16-22K, most around $19K. , 5-10% of their original selling prices, and we’ve discussed if they really should be valued at negative here, based on fees. Wood is Good even bought a unit at a Trustee’s Sale for $11K in an attempted flip move.
– Holcomb Townhouses have closed 1 unit, but are advertising over half sold and last available unit with metal railings. The Dude reports seeing 5 cars in unit driveways (all Prii!). So it looks like a lot of the units are going rental, or we are seeing a lot of shuck and jive.
– If you like researching messy narratives, check out 740 Mays in IV which received an NOD today. Bonus points if you can identify the amount owing on this property, and how many NODs it has received.
MikeZ
GSR! I remember when they bought the Hilton and had the brainstorm that by raising the room rates they would incresase demand.
Oops.
billddrummer
To Mike M,
The image for the newest NOD hasn’t been loaded yet, but there is a $450,000 1st recorded 7/21/03.
Don’t have enough time to go into detail on all of the filings, but it looks like these people have been really busy.
Sully
After looking at the NOD’s and then reading these two items:
US Chamber of Commerce – “Congress, the administration and states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse,” Donohue said in a speech providing the Chamber’s outlook for 2010.
and then Tim G regarding a double dip recession:
”We have much, much lower risk of that today than at any time over the last 12 months or so,” Geithner said. “Again just think of where we are. We are in an economy that was growing at the rate of almost 6 percent of GDP in the fourth quarter of last year. The most rapid rate in six years. So we are beginning the process of healing.”
Geithner went on to say that “we have the capacity — the government — to try to make sure we are reinforcing that process. And we help guide this economy back to the point where we’re not just growing again, but we’ve seen growth translate into jobs. And that we’re reaching the lives of all Americans.”
hmmmmm, I’m giving the stock market about two weeks (tops) before the downturn begins. As far as I’m concerned Geithner can go work for the Warren commission (they didn’t get it right either).
skeptical
The large and inexplicable gap between NOD’s and TD’s continues. It’s obviously a result of massive government interference in the market.
Such manipulation will only lead to a much longer, more drawn out, and harmful downturn.
If the free market were allowed to work unhindered, we likely almost be through with this mess and looking at brighter days in the Reno real estate market. Now, however, we are looking at 10 miles of bad road….and then some.
SkrapGuy
It is not just governmental intervention at the federal level that is making it worse. The Foreclosure Mediation Program here in Nevada is already causing more problems than it is solving. This is turning into no more than just another way for unqualified people to stay in a house they cannot afford. Simply delaying the inevitable.
Sam
How much are the maintenance fees at Grand Sierra?
Land Guy
I agree that the rollercoaster is a function of government intervention. As proof I point to the NOD and NOS lines which have tracked nearly simultaneously since last Aug. The peaks and valleys of the NOS should mirror the NOD, however, it should come 3 months later; likewise with TD coming 1 month after NOS. These lines are all parallel, do I smell shadow inventory…
Guy Johnson
Just added Ticor’s chart to Mike’s post above. Click to enlarge.
Guy Johnson
Sam,
I’ve looked at a few of the Active listings for the GSR and have found HOAs specified by the listing agents ranging from $369/month – $438/month. Probably depends on the unit’s location, size, etc.
Guy Johnson
More on the Grand Sierra Resort recent sales. I’ve looked at the twelve resales since January 1st on MLS.
Of the twelve sales, ten were bank-owned.
Sold prices ranged from $17,500 – $22,900
Sold price/sq.ft. ranged from $37.06 – $52.69
square footage ranged from 405 sq.ft. – 510 sq.ft.
monthly HOA fees ranged from $368 – $438
GreenNV
Sam,
GSR got discussed back in September – https://renorealtyblog.wpengine.com/2009/09/highrise-condo-edition.html, and their is a link to the project’s CCRs HOA dues averaged about $.85 PSF per month, and there seems to be a lot of other added monthly fees.
BanteringBear
“13 resale units have closed so far, with prices ranging from $16-22K, most around $19K. , 5-10% of their original selling prices, and we’ve discussed if they really should be valued at negative here, based on fees.”
Yes, “they really should be valued at negative.” If someone told me they would GIVE me a Grand Sierra condotel for free, I would tell them I did not want it. Seriously.
CommercialLender
BB,
I’ll take a GSR unit for free….then sell it for $17,500 – $22,900. C’mon, you would too!
You could give me a Montage unit, too, while you are at it. I’d let you.
****
On another note, what will these condotel sales do to next month’s median figures? Guys figures that include ‘condos’ will plummet with fresh lowball numbers en masse, just in time for tax credit to expire too. Ugly from here on out, I think, straight thru the standard buying season.
skeptical
CL,
Concur that median sales prices will inevitably continue their downward slope. Honestly, I’m a bit surprised that the expiring tax credit hasn’t goosed sales prices more. We are in March. Contract needs to be signed by end of April to qualify.
Could it be that all those eligible/motivated by the credit have already bought, or decided not to?
I think prospective buyers would be wise to wait out the credit, watch for the inevitable price bump down (at the low end) post-credit, and then make an informed decision.
As for the high end, anyone would be a fool to buy at this time, IMHO. Big price compression at the end this year is inevitable.
As for the GSR, I don’t know what motivates buyers of those units. The fees alone buy me a week long stay at a better hotel in Reno. Greater fool theory is the only explanation.
skeptical
This market is critically dependent upon historically low rates continuing through 2012. See following URL with a nice graph of Option ARM resets due for the next few years:
http://www.snl.com/interactivex/article.aspx?CDID=A-10770380-12086&source=patrick.net
It’s been discussed in many places, but that graph is terrifying. $1 trillion (with a “t”) due to reset in the next few years. With 60+% of Reno houses underwater, a refinance is not feasible.
Buckle in for wave two of the great housing crash. Add in the shadow inventory and foreclosure headwinds, and one must ask the question: Why would anyone buy at the mid to high end in this environment?
Sam
Thanks all for the GSR info.
Just before moving here, I rented a condotel for a few months and it was the best living experience I’ve ever had. Felt like being on vacation all the time. But it was bigger (1200 sq ft) and had W/D in it. Maintenance fees there were 1500+/month. Since I’ll pay over 16K in rent this year, it might be nice to live at GSR if it were bigger and could fit W/D.
RB
What do you Real Estate wonks make of this recent “good times are around the corner” article??
http://www.businessweek.com/magazine/content/10_11/b4170020655634_page_2.htm
inclinejj
This market is critically dependent upon historically low rates continuing through 2012. See following URL with a nice graph of Option ARM resets due for the next few years:
The US Gov’t is the only big buyer of MBS(Mortgage Backed Securities) out there. This is going to come to an end in March-April.
Home Mortgage rates are expected to go up between 50 to 100 basis points..From half a percent to 1 whole percent. This will knock lots of people from qualifying.
Also take note of the 11th Cost Of Funds..a pretty good barometer of where rates will go 6 to 12 months from now!!!
skeptical
RB,
Not really sure what your point is with that article. All it says is that cash rich builders who are cash rich because they were given billions and billions of dollars from the government are now looking to buy land and smaller builders.
The title of the article, “Hope on the Horizon” is pretty deceptive too. The only hope is that the builders make more free money, even in this dismal economy. It’s not referring to hope for Joe Sixpack.
If anything, it bodes negatively for homeowners, as, if the article is correct, it appears that the nation’s big developers are buying up land, presumably for future development. That future development will provide supply to an incredibly saturated market. Anyone who thinks that that’s good for you, your neighbor, or the country is delusional.
The plutocracy runs amuck while we quibble.
longerwalk
Resets are coming, but it looks like a number of them (mine included) will reset DOWN due to the astonishing low LIBOR rate. That actually will me 2 years at a lower rate, since the amount of reset is capped. That might contain some of the upcoming carnage.
billddrummer
To Mike M,
I know this thread has been quiet for awhile, but I decided to do a MTD count of these filings:
All are from 3/1-3/22
NODs 639
NOSs 515
TDs 177
Interestingly enough, HOAs seem to be filing NOSs at an accelerating pace.
FYI