May numbers have been compiled. While the number of homes sold was above the 400 level (something we haven’t seen since October last year), the median sold price upward trend from January to April looks to have flattened in May. What will June hold?
| Month | # Homes Sold | Median Sold $ |
|---|---|---|
| May 2007 | 407 | $296,000 |
| April 2007 | 378 | $297,000 |
| March 2007 | 372 | $293,700 |
| February 2007 | 310 | $285,000 |
| January 2007 | 322 | $280,500 |
| December 2006 | 337 | $290,000 |
| November 2006 | 318 | $300,000 |
| October 2006 | 409 | $299,900 |
| September 2006 | 385 | $299,900 |
| August 2006 | 372 | $306,650 |
| July 2006 | 411 | $322,900 |
| June 2006 | 463 | $325,000 |
| May 2006 | 425 | $316,000 |
| April 2006 | 412 | $316,000 |
| March 2006 | 434 | $328,000 |
| February 2006 | 321 | $317,000 |
| January 2006 | 325 | $325,000 |
| December 2005 | 385 | $319,900 |
| November 2005 | 443 | $331,000 |
| October 2005 | 559 | $335,000 |
| September 2005 | 602 | $336,500 |
| August 2005 | 695 | $334,950 |
| July 2005 | 677 | $345,000 |
| June 2005 | 607 | $335,000 |
| May 2005 | 717 | $326,000 |
| April 2005 | 650 | $315,000 |
| March 2005 | 660 | $309,000 |
| February 2005 | 411 | $301,000 |
| January 2005 | 381 | $295,000 |
For new readers to the Reno Realty Blog: the table above is updated on a monthly basis. The numbers reported cover the cities of Reno and Sparks, NV.
Data courtesy of the Northern Nevada Regional MLS – June 2007.
Lindie
Is it getting difficult to make a living as a realtor?
407 deals in May. Let’s say each deal was for the median price $296,000. Let’s say each deal was for the 6% commission. Let’s say each deal had two realtors, one for the buyer and one for the seller. (I understand that none of these assumptions will be true for every deal).
Each deal generates $17,760 in commissions. $8,880 to each realtor. Each realtor gives half to his/her broker. Each realtor makes $4,440.
If you go to the website of the Reno-Sparks Board of Realtors, there are thousands of realtors listed as members. No doubt some of these people do no more than send in their dues (wonder why?). Somebody a while back said there are about 3,000 realtors in Reno-Sparks. If so, 812 of them made about $4,440 last month, and about 2,200 of them made nothing.
Another way to look at it: 407 closed deals at $17,760 commission per deal generates $7,228,320 in total commissions. Half of that goes to the brokers to keep the lights on and the copy machines working. Now down to $3,614,160 in commissions paid to realtors. Divide by 3,000 realtors. Equals $1,204 each for the month.
Why is it that I just don’t believe it when the RGJ runs a story quoting the President of the Board of Realtors saying, “well, actually, very few people have left the business.”
derrick
“if so 812 of them made $4,400 last month, and 2,200 made nothing”
Id venture to say that its even less than that. Dont forget to take into account that some of those sales Are builders selling inventory, and its quite possible that certain realtors managed to sell more than 1 property last month as well..
Example: My mother bought a house last month which would account for 1 of the 407 sales. She paid 675k no doubt above the median, but it was her realtors 2nd sale in may alone, and 3rd in less than 2 months.. incase your curious it was Dickson Realty.
derrick
the uptrend in median price Is still intact despite the very slight drop last month (1k). Regardless if homes that were 500 are selling for 400k and effecting the median, it doesnt change the fact our median has posted gains 4 out of the last 5 months. With 407 sales the most since last year, that number is more encouraging to me that people are begining To buy a litte more.
jkat
Guy,
What is the inventory of single family homes like in Reno? Las Vegas has crossed the 20,000 level, just shy of the all time record.
Move to Reno?
Probably only 500 to 600 fulltime realtors are bringing in the bacon. The other 2400 are still paying their membership fees but are also working elsewhere. They are still active realtors on paper, just waiting for the bust to end.
Probably at least half of them will eventually stop paying their membership fees.
Miguel Goldstar
I love the new changes to the MLS search on the main page. very functional now. Love the save feature and also being able to see the addresses without having to go to more details
Guy Johnson
jkat,
The MLS is showing 7,604 Active (non-Pending) listings for the whole Northern Nevada Regional MLS. If I look at just Reno (not Sparks, etc), the number of Active (non-Pending) listings total 3,342.
Thanks for your question.
– guy
Reno Ignoramus
Guy, what is the number of active listings for Reno-Sparks? Do I understand that these 407 sales for May are for Reno-Sparks only?
Thanks.
Guy Johnson
Reno Ignoramus,
At the moment the number of Active (non-Pending) listings for Reno-Sparks is 4,446. And yes, the 407 sales for May are for Reno-Sparks only.
– Guy
Reno Ignoramus
4,446 listings for Reno-Sparks. 407 sales last month. That is a 0.9:10 sales:listings ratio.
We are selling less than 1 house out of every 10 on the market every month.
This signals a healthy market?
407 sellers attracted a buyer last month. 4,000 did not. How many of these 4,000 sellers will get serious about selling causing prices to decline even more?
One half them, or, 2,000?
One quarter of them, or 1,000?
Let’s just say 1000 sellers (25% of the folks with a for sale sign in their front yard) get serious and realize that in order to sell, they have to price below recent sales. Not below competing listings. Below recent sales.
How can prices not decline from here?
Lindie
I also like the new changes to the MLS search function. Especially the status function. Why, did you know that just today there are eight “Price Reduced” and one “Back on Market” in Reno-West-Southwest alone?
SkrapGuy
Guy,
Thanks for the info. I have a question. You say there are 7,604 active listings on the MLS, and 4,446 of them are in Reno-Sparks?
Where are the other 3,158 listings? Are they in places like Carson City, Fernley, Fallon, Yerington, etc.? It seems a bit surprising that there would be over 3,000 listings in all these other towns.
To RI’s post I would add that if 35%-40% of all listings are vacant, then 1,550 to 1,780 of the Reno-Sparks listings are sitting empty. These sellers are most probably all paying two mortgages, two property tax bills, two insurance bills, as well as the costs asociated with upkeep and maintenance. Can the owners of these vacant houses hold out forever before they give in and get real about their asking price?
MikeZ
RE: We are selling less than 1 house out of every 10 on the market every month. This signals a healthy market?”
Nit: 1 out of every 11, not 10 (even worse).
I think it was a Bloomberg article this week that found median prices in some areas were increasing while home values were actually decreasing.
How? Sales in the low and middle markets had fallen off quite a bit (no more subprimes) while sales in the upper end fell less, causing the median to rise.
jkat
Guy,
I would like to see the history of inventory levels of single family homes in the Reno area. Are you seeing any improvement in this area? If you have time maybe you could post like you posted the home sales.
Thanks
GreenNV
How can I not add a comment to a post where Derrick and Lindie are almost AGREEING?
It is time for a bitch-slap to the sellers and the realtors that represent them. If you bought in 2005 or later, you are not going to make money, you are not going to break even, and your decision is how much you are going to lose. Why do realtors even waste their time with the dreamers who still have dreams of the big kill? (back track to Guy’s post).
Some people get it and most don’t. Some examples from Sierra Canyon:
9125 Heritage Ridge. Purchased 11/05 for $298,143. Currently listed at a reduced price of $244,900, -18% (this one might be a keeper). This buyer gets it. Not only the cheapest resale in Sierra Canyon but the cheapest by $60,000.
9092 Cabin Creek. Purchased 12/05 for $434,976. Currently listed at $399,895, -8%.
9036 Cabin Creek. Purchased 1/06 for $272,750. Currently listed at $309,950, +11%.
9210 Palmetto. Purchased 3/05 for $303,085. Currently listed at $410,000, +35%.
1745 Trail Creek. Purchased 7/05 for $356,373. Currently listed for $429,900, +21%.
When a Realtor lists a property, they take on the out of pocket marketing expenses. How many years of Junior College education does it take to realize that a bad listing is bad business? Is NO not a part of your vocabulary?
Sorry for the rambling rant. I just get so frustated by the delusional sellers and the agents who don’t call bullshit. The market surely will.
Guy Johnson
SkrapGuy,
Our MLS covers a wide area, including a bit of California (i.e. Truckee, Markleeville, Coleville), as well as Lake Tahoe.
I examined the other areas and found some sizable numbers. For example,
505 listings in Carson City
1,483 listings total in Lyon, Storey, and Carson City counties.
So, the numbers will add up.
Thanks for your question.
– Guy
Josh in 895095
Thanks Guy for the great info…
I have a simple question, we often are asked to take emotion out of the process when setting prices, or making purchases in order to get the best negotiated price.
Extending this concept, why do so many on this thread use the “what they paid” as a measure for where the market is going. If someone bought for 500K in 2003, to me that seems largley irrelevant to current pricing. Over the long-haul homes will increase in value thus making what someone paid largley inrelated to market value.
I read comments – or perhaps misread them and infer that individuals feel that if someone paid 500K for a given home in 2004, then that same home would not be worth more today. At least that’s how I read it – and it seems like false logic. What am I missing?
Reno Ignoramus
GreenNV;
This silliness of realtors taking on listings at dream on prices has been going on for almost a year and a half now. Several months ago, I asked the same question: why do this? A couple of people (realtors?) responded that many realtors will do this if for no other reason than to come into contact with potential buyers whom they can then switch to other listings. Say, “you know, I agree this house is overpriced, but let me show you this other one….”
I don’t know if that’s the reason, but it at least sounded plausible.
I agree with your comment completely, except that I would suggest that for many neighborhoods, we are back to 2004 prices. Diane suggested the other day Somersett may be back to 2003 prices. So, for all the post 2004 and later delusional sellers out there:
You are not going to sell for what you paid.
You are not going to sell for what you “need.”
You are not going to sell for what your neighbor sold for 3 years ago.
You are not going to sell for what Zillow says.
LindieGee
GreenNV, you want some delusion?
Take a look at MLS 70010512. 1905 Russell Pointe Ct. in, where else?, Somersett.
Sold from the builder on 10/21/05 for $736,555. Listed now for $849,000. Since 10/05, the market has gone nowhere but down. (Just look at Guy’s post. But these sellers, and their realtor (the one who has her own billboard on Plumb Ln.)think the value of this house has gone up 14%. Puh-lease.
derrick
I feel pretty comfortable about my house I bought in 2002 then!! I do agree with people that say anyone who bough in 2005 is not going to make money and infact LOSE money.
Does anyone on here think that We will See Early 2002 prices? I paid 260k for my home in spanish springs, Its a 3bed/2.5bath 2,400 sq/ft stucco home, on a .33 culdesac lot overlooking the park. Brazillian cherry floors throughout,nice kitchen maple cabinets+molding, granite counters all bosch stainless steel appliances. all the bathrooms have been tastefully updated as well. I Also had a paver stone patio put in the back and side yard along with some landscaping. roughly 50k in cost of materials with little labor included.
For some reason I just dont see early 2002 prices coming back.. were talking pre-boom years here..
Cheers
Reno Ignoramus
Well, Derrick, let me ask you. Are you asking will the market return to 2002 nominal values, or are you asking will the market return to 2002 values adjusted for inflation?
Will the value of your house ever drop to or below the $260K you paid in 2002?
Or, will the value of your house ever drop to or below the $260K you paid, plus an amount representing real inflation over the past 5 years?
There is a big difference here. What are you asking?
Can you agree real inflation has been at least 5% a year over the past 5 years? None of us believe the CPI do we?
5% a year since you paid $260K 5 years ago would put the inflation-adjusted value of your house at a bit more than $325K.
Does anybody here think the value of Derrick’s house could fall to $260K?
Does anybody here think the value of Derrick’s house could fall to $325K?
Let’s take a poll.
Can’t wait to hear from Bantering Bear.
Mike Van H
http://www.reynenandbardis.com/find_comm_detail.cfm?CommID=74&action=models I ran across this. At least at Cosmic Village in Wingfield Springs, their most expensive model is $339,000 at 2500 s.q. In looking at what other new homes are advertised for, Galaxy’s 2400 s.f. model is $362,000, Saddlebrook’s 2400-ish model is $330,000, Silver Ridge’s 2400 s.f. model is $350,000ish.
However a real estate agent told me they are selling their standing inventory at much lower prices than advertised.
If you look in the MLS, you’ll find dozens and dozens of comparably sized homes in the same area for $350,000+ for less than 2,000 s.f. Doesn’t it make sense that to sell an existing home, you at least have to sell it for less than what a new home is going for in the same area? AT LEAST?
Smart Money
“5% a year since you paid $260K 5 years ago would put the inflation-adjusted value of your house at a bit more than $325K.”
Interesting. This scenario will put Reno housing right back at the historical appreciation rate of near 0%. This is exactly what Robert Schiller http://biz.yahoo.com/hmoney/070521/040907_shiller_moneymag.html was talking about. Interesting how things do indeed always end up back at their historical averages.
Doofus
Derrick looks OK to me.
My house is a “time” comp with his in 2002. Give the worst case Pearl Harbor sale condition where I would have to undercut the comps by $75,000, I would still be up about 50% (down from about 80% at the peak). So I would put the current market value of his house at about $390,000 sight unseen. That beats both the straight line and inflation adjusted values. Prices would have to fall at least another 20% to meet the adjusted model, and I just don’t see that happening.
BanteringBear
Thank you for taking the time, and having the patience and foresight to explain the difference to Derrick, Reno Ignoramus. While I’m not so sure he will grasp it, at least you tried. I would also guess, based upon his recent yammering, that he doesn’t understand median price either. Ouch, I know.
Taking into consideration the large inventory problem (exacerbated by foreclosures), rising interest rates (reducing purchasing power), and a weakening economy, I am going to bet that we will easily see 2002 prices in nominal dollars. We’re already seeing 2003 pricing in certain areas.
Based on the limited amount of information Derrick has provided regarding his own residence, I would bet that he’ll have lost money by this time next year. He’s got $310k into the place, and I anticipate the nominal value will fall below that. His proclamation that 2002 was a pre-boom year is simply false. Time will tell.
derrick
To mike, Those new homes you mentioned. Something tells me they dont come upgraded quite like mine. however I may be wrong.
Do they have brazillian cherry throughout? custom maple cabinets with glass inlay and molding (wine bar my favorite;), granite counter tops, All bosch SS appliances,completely landscaped with a 15k paver patio in the backyard.
If I had paid for these upgrades to be installed by a contractor I most certainly would of paid 75k. Though I only paid roughly 50k.
Also I would be curious as to the size of the lots of those homes as well. Does being in a culdesac help home values?
derrick
thanks for the input guys I appreciate it. I wanted to see what you all thought.
perhaps Diane Could let me know what she thinks.
Mike Van H
Hi Derrick I wasnt comparing those homes to yours specifically, I was comparing those new homes to equal size/lot homes in the MLS for sale for significantly more. I have no idea what your lot size is or what upgrades you have so it wouldn’t be very productive as a comparison.
My point was there are a lot of people currently trying to sell their existing homes for $150,000+ more than what the new homes are going for in these newer Spanish Springs subdivisions, which some are no more than a few years old.
I have a friend who bought a house in Spanish Springs in 2006 for $420,000, and is trying to sell it for far more than that, while new homes the same size across Vista Blvd. from her are going for $330,000. At that point, upgrades don’t make a difference, people will go for the $330,000. And then she wonders why its been on the market for 80+ days (I tried to talk some sense into her to no avail).
2sleepy
I have looked at alot of new homes,and while some have nice upgrades, many have nasty white tile counters, 1980 looking light fixtures and $8 a yard carpet. I guess if all a buyer wants is ‘new’ then those homes would be a bargain…to me they are not.
MikeZ
RE: “I feel pretty comfortable about my house I bought in 2002”
Just curious: How do you feel about your mom’s $675K purchase last month?
Derrick
exactly 2sleepy for 325k your not going to find a huge home with granite counters, nice cabinets, awesome wood floor, and landscaped..
Funny how they consider them new yet most of the fixtures like you mentioned are so outdated looking,, white tile counters? YAY!!Ugly Oak cabinets? Nice Cheap white tile flooring, or faux tile flooring? Oh Soooo Nice LOL.
Derrick
Im not worried the least about my mothers decision to buy at whatever price. The amount of money that she will save by not paying california taxes will MORE than offset any losses In RE.
Revi Slessinger
My mom just finished shopping for a home in Spanish Springs. She is relocating here to be closer to me. Couldn’t talk her into moving into Park Towers. Damn. So she is shopping developers who have excessive inventory. They are including items like stainless steel appliances, upgraded flooring, high-end carpet, granite counters, upgraded fixtures, and on top of that offering $15,000 to $20,000 in upgrades and another $10,000 to $15,000 in incentives, and that’s after shaving off $25,000-$40,000 in the asking prices. It was the same with R&B, Lennar, etc. Can Diane or Guy confirm this? They are realtors, they should know. Der may be safe in the value of his home, but Van H has a point; there are good deals to be had until inventory thins out.
Lindie
Thanks Revi, for an update on how the builders are crucifying the resale market. How many Joe Sixpack’s you know about trying to sell their resale house in Spanish Springs that are offering $20,000 in upgrades, $15,000 in incentives, and are also whacking $40,000 off the asking price?Sure, we all know a lot of these builders “incentives” are smoke and mirrors, but the reality is that the builders are going to devastate the resellers.
Maybe that is why only 9% of resale houses are selling. I hope your mother negotiates a damn fine deal, because if she doesn’t, come this December, the builder will be underselling her by plenty no matter what she pays today.