The answer may surprise you.
A recent study found that distressed properties are the driving force behind declining home values across the country. The analysis, conducted by CoreLogic, found that house prices fell 4.7 percent last year. However, if distressed properties were excluded, then the drop was less than one percent. See Distressed Sales Undercut Home Prices in 2011, Study Says
However, the CoreLogic study was conducted at a national level; so I decided to take a look at the Reno-Sparks numbers to see how our results compared.
The time frame used in the study compared December 2011 to December 2010. The median sales price in Reno-Sparks, Nevada fell 6.1 percent during that time period.
Removing distressed sales (short sales and bank-owned foreclosures) from the mix, I found that the decline in the median sales price of non-distressed properties fell a whopping 13.5 percent during the same period — a decline more than twice that of the market as a whole.
Surprisingly this was directly opposite of CoreLogic’s findings at the national level. Curious, I decided to look a little farther back. Here is what I found:
All sales
| month | median sales price | units sold | % decline |
| Dec 2011 | $155,000 | 527 | -6.1% |
| Dec 2010 | $165,000 | 485 | -7.3% |
| Dec 2009 | $178,000 | 425 | -18.7% |
| Dec 2008 | $218,900 | 295 | -22.9% |
| Dec 2007 | $283,950 | 228 |
Non-Distressed sales only
| month | median sales price | units sold | % decline |
| Dec 2011 | $186,000 | 157 | -13.5% |
| Dec 2010 | $214,990 | 148 | -8.1% |
| Dec 2009 | $234,000 | 114 | -20.7% |
| Dec 2008 | $294,950 | 76 | -4.4% |
| Dec 2007 | $308,450 | 14 |
[Note: Unfortunately, I was unable to go back farther than 2007, because prior to that our MLS did not differentiate between “types” of sales.]
As can be seen from the numbers above in some years distressed properties appeared to be the driving force behind the housing market decline, in 2008 for example. While in other years, non-distressed sales decline the most – in 2011, for example.
Note: The medians data above covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. Residential data includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – February 2012. Note: This information is deemed reliable, but not guaranteed.
