The market slogged through December with a median sold price of $293,995. Quite a bit of inventory came off for the holidays while not much new came on, improving absorption rates. But with 350 "new" listings in the last seven days, for sale signs seem to be making a quick comeback. We’ll see if the buyers actually bite. read
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Lindie
What is the situation with MLS # 70000865, 2255 Pepperwood in Somersett?
This house closed escrow two months ago for $1,695,000 and now it is back on the market for $1, 500,000. What happened? Is this a flip gone bad? This house has dropped in value at the rate of $100,000 a month since it last sold all of two months ago?
Is this an example of why there has never been a better time to buy?
BanteringBear
Is the median sold price of $293,995 for Reno alone? If so, that seems to be down quite a bit YOY. In my opinion, Reno is going to experience significant price erosion over the course of the next few years. As someone raised in Reno, it was easy to see that the skyrocketing prices were due, in large part, to rampant speculation (false demand). And, the builders bought right into it and have WAY overbuilt. Thus, between new homes, and speculator owned resales, the glut in supply will be absolutely staggering. Factor in the foreclosures on the way and the trend is easy to identify. Wages around here don’t even come close to supporting current prices. While I agree with you that Reno is experiencing a lot of inmigration, wages will, over the long term, dictate where prices find support. But this doesn’t have to be a bad thing for realtors like yourself! I think, if you can convince sellers to price properties effectively, they will move. I am hopeful that realtors start refusing to list properties at absurd prices. These days, it is easy to come across something priced several hundred thousand above what it would have sold for in late 2005. A poor strategy, and not good for the market.
Prime
Bantering Bear makes good analysis. I would like to add:
1. the glut of inventory which we will have by May or June of this year will drag prices down even further (I will put money down that by June 15 of this year there will be an additional 2000 or more single family homes on the Reno/Sparks MLS, any takers?)
2. There is a real chance that the Feds will raise the interest rate again before this summer. If that happens then more people are unable to afford a house payment.
3. By the end of 2008 there is going to be a glut of new condos downtown which will not only hurt existing condo prices but hurt resale home values as people will have more options
The housing slowdown ain’t over, we are still just at the beginning.
Lindie
I took a drive today out to Wingfield Springs. Went through all of Wingfield Springs and drove through all the new developments. There must be 8 or 9 builders out there.
Folks, it was a bit eerie. Like a ghost town. Street after street with no human beings in sight. Maybe 3 or 4 workers in all the developments put together. Now either the builders have taken to giving Friday afternoons off to their work crews, or these projects are shutting down. Anybody else have similar observations?
RenoIgnoramus
Prime:
I’m not going to take your bet about the number of listings there will be on the MLS by summer. I think you are quite correct. There are about 40-50 “new” listings coming on the MLS daily now. I say “new” because of course they are not really new. These are just the houses that sellers pulled off the market last October-December after spending all of 2006 trying to get their dream on price. Many of these “new” listings still have the picture from last summer with the nice green summertime lawn. You would think that the realtors would at least go out and take a new picture. But then, maybe they figure that it will be summer soon enough and the house will still be on the MLS then.
Also, note the steadily increasing number of listings coming back on under $300K, and even under $200K.Housing markets don’t decline with a sudden fall, like stock markets can. They just slowly but steadily slip backwards.
Perry
I went to The Vue at Somersett the other day. I also was there about four months ago and have both price sheets. The latest being called initial pricing. Wasn’t initial pricing what I received four months ago? Here’s how they stack up. The first column of prices is from Oct ’06 the second is Jan ’07. Not a trend I’d like to be in.
Model
Duets
Brighton 1794sq’ $393,900 $306,400
Morgan 1978 sq’ $420,900 $326,400
Campton 2117sq’ $436,900 $334,400
Kingston 2331sq’ $463,900 $357,400
Courtyards
Carrington 2200sq’ $473,900 $370,400
Lexington 2301sq’ $475,900 $387,400
Devonshire 2328 sq’ $478,900 $386,400
MontClaire 2611 sq’ $489,900 $397,400
In my opinion they’re still too high by about $60k. They’re all the way in the back of Somersett. If I want to live smashed together I’ll live in town not in the ‘burbs.
Lindie
What a great post Perry. This on the ground info is just so valuable. We are looking at price reductions of about $90,000 to $100,000, more or less, in just 3 months! In many cases this represents a drop in price of about 25% in 3 months! How would you feel if you bought in 3 months ago, and now see the builder selling for $100,000 less than you paid?
Gotlots has not posted in a while, but last October he was telling us regularly that if one wanted to lock in declining value on a house, that was the time to buy. Seems he knew what he was talking about.