I just came across this excellent article in the San Francisco Chronicle about some of the most popular real estate blogs in the City. The funny thing is, their readers sound like our readers. Check it out… maybe we can scrape a few good ideas from the big boys. Getting Down and Dirty on Housing
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2sleepy
socket site is ok but no where near the fun that this one is: http://bubbletracking.blogspot.com/
Bubbletracking is darn near as entertaining as reading obituaries.
Speaking of obituaries, my friends in So. Cal finally sold their house. Net loss on that transaction was $139,000 (40k down/ 32k payments on an empty house for a year & the balance of $67k to the bank)
GreenNV
Here’s my current favorite blog – http://www.irvinehousingblog.com/
Irvine peaked about a year after Reno, and now is falling faster. There is a supurb post from a few days ago titled Land Values 101. It expains the mega bucks involved in RE development, and why the builders are still building in this market.
Lindie
This is a good site. Even closer to home is the Sacramento Land(ing) site/blog maintained by Lander. Very informative about the Sacramento market and the surrounding Placer and El Dorado counties.
smarten
Diane wrote, “the funny thing is, their readers [San Francisco’s] sound like our readers.”
O.K., read what follows and guess where it comes from:
“While…June home sales fell to their lowest level in 12 years, median prices continued to rise…masking problems – and falling home values…The median price of resale houses sold in June…[was] up 2.7% compared with a year earlier…condominium prices…rose 6%…while sales dropped 22%…Right now we have a skew…Parts of the market’s high end are selling quickly and appreciating, while the lower end is generally experiencing slow sales and falling prices [because it]…has been hit hard by the subprime lending fallout…The primary reason the median price keeps rising…is that considerably fewer homes than normal are selling in the least expensive neighborhoods. With those out of the count, the median price goes up…It’s not clear yet whether the problems in the low end of the market will ooze into the high end. [Although] there’s no direct economic connection [but see what follows]…there’s a psychological [one] in the sense that all of the news is that the housing market has slowed and there’s no rush to buy. But…those having trouble selling homes are not making the ‘move up’ purchases they might have. Combined with slow sales among first-time buyers and those with bruised credit histories, there’s two segments of the marketplace being hit tremendously hard…”
And so your guess is?
No, not Reno; Silicon Valley where the median price of resale houses rose again to $791K! You can read the entire story in today’s San Jose Mercury News at http://www.mercurynews.com/ci_6411785?IADID=Search-www.mercurynews.com-www.mercurynews.com&nclick_check=1.
This article isn’t describing an isolated phenomena. It is in full bloom in Incline Village/Crystal Bay and I believe explains what’s happening in Reno/Sparks.
Basically both the inventory at the lower end of the pricing spectrum which offers good value [likely because of aggressive pricing] and prime inventory [by definition at the higher end of the pricing spectrum are]…selling and all the junk and overpriced stuff in between is sitting. Very few lower priced sales matched by an equally few higher priced sales and voila; a rising median price in a declining market!
To those agents who point to rising median prices as evidence the market has turned or it is immune from what’s happening elsewhere [Don Kanare from Incline Village (InsideIncline.com) being one of the better examples I know (“if you are a buyer waiting for a significant price decline you are probably going to be disappointed”)], I would suggest they look a little deeper.
I think once you start seeing median prices dropping in tandem with sales volume, you will begin to be able to make some accurate assessments as to where this market really is and where it’s really going.
Reno Ignoramus
Smarten, many of us here have commented on the “rising” median, or at least a stable median (one month its up the next month its down), in the declining market. Thats why many of us asked Diane or Guy to post about price on a per sq. ft. basis. Diane’s post of just a couple of days ago shows what we all suspected. That price on a per sq. ft. basis is falling. Anybody paying even casual attention to the market knows that you can get much more house today than you could have a year ago for the same money. And with 8% of the resale inventory selling every month, the developers continuing to build and build and build on their paid for land, the short sales and foreclosures mounting, and now, so-called “auctions” coming to town, it seems fairly certain that you will be able to get much more house for the money a year from today than you can now.
Reno Ignoramus
The reference in Smarten’s post to Incline Village and Lake Tahoe made me curious. So I looked up how many listings there are in the MLS for Tahoe properties, which includes properties on the Nevada side.
Are you ready?
There are today 376 listings.
Guess how many have a pending offer?
Guess again.
Nine.
Yes, 9 out of 376.
That’s 2.3% of the listings with an offer.
I don’t have actual sales figures, but let’s just assume that all the pendings (ALL 9 of them) go to close.
That’s 163.47 months of inventory.
That’s 13.6 YEARS of inventory.
How would you like to be selling real estate at Tahoe?
Reno Ignoramus
Oops, sorry . Thats 3.5 YEARS of inventory. I guess everybody does want to live there.
BanteringBear
RI posted:
“I looked up how many listings there are in the MLS for Tahoe properties…There are today 376 listings…That’s 13.6 YEARS of inventory…How would you like to be selling real estate at Tahoe?”
I was looking at Tahoe properties a few weeks ago. That market is dead. Some of the fantasy prices are absolutely hysterical. It’s not hard to imagine little selling when someone is trying to get nearly $500k for a shoebox. I had a great time pulling flyers and laughing out loud while shaking my head as I got back into the vehicle.
A few weeks ago, while boating along the eastern shore of Lake Tahoe north of Incline Village, my poor eyes were drawn to a most unappealing, ostentatious eyesore protruding from the once beautiful granite bluff. I would guess it to be around 30,000 square feet. In all of my years on the lake, I had never noticed this dastardly behemoth. I won’t miss it should I never see it again.
Diane Cohn
Hmmmm… Tahoe in trouble? No way! Where’s the Kool-Aid? I need a drink.
Maybe that’s why I got the big volume award this quarter (Reno never gets this one because the lake people can sell one house and beat the pants off us.) Still, my brokerage as many of you know, has a huge lake presence. And in speaking to some of the agents up there, quite a few have some big ticket items pending, and big ticket properties often have longer closing periods. I guess we’ll know more in the next couple of months…
Reno Ignoramus
I have a house at Tahoe. Somebody always has a “big deal” in the works at Tahoe. “Big deals” at Tahoe go along with the pine needles and the the sap on your car. So maybe somebody buys a lakefront for $8 million. Of course that one wins the big volume award. How many Trianna condos you have to sell to get to $8 million?
376 listings. 9 pendings. Ain’t no way to spin that into jolly news.
BanteringBear
RI posted:
“Somebody always has a “big deal” in the works at Tahoe. So maybe somebody buys a lakefront for $8 million. Of course that one wins the big volume award.”
Exactly. These sorts of sales are completely irrelevant, IMO. What matters are the average homes, and they’re languishing. Unless those with deep pockets plan on buying a couple of ho hum cabins, along with the multi-million dollar monster, the market will continue it’s downward spiral. Median price at Tahoe can be very misleading because of the sales of these high end properties.
smarten
Bantering Bear is absolutely right! We lived in Tahoe City for nearly a year and scoured over ANYTHING available for rent or sale [several times a day for 6 or more months] anywhere from Tahoma through Incline Village . The market can be described as I’ve previously attempted to describe it insofar as what’s currently going on in Incline Village/Crystal Bay.
75% or more of the housing represents second/vacation homes – very, very few owner-occupants. The owners by-and-large don’t have to sell. According to Diane [according to Don Kanare (insideincline.com)], 2/3 of the residential properties in Incline Village/Crystal Bay DON’T have mortgages. There’s been such a run up in pricing that many owners have “big eyes;” they’d like to sell if they can realize million-dollar [plus] gains over night, but if they can’t, they’re not interested [nor motivated] in selling. In other words, since they’re not really sellers, all the rules that are premised upon the given sellers are in fact motivated to sell by days on the market, changes in mortgage interest rates, their job transfers, money or other needs to sell, etc., etc., simply don’t apply; it’s a new paradigm!
7,700 single family homes/condos/freestanding PUDS; now nearly 500 listed on the MLS [and many other FSBOs]; 131 sales in the first 6 months of the year; 220 or more houses currently on the MLS and 160 of them listed at more than $1M [one of them actually listed at $19.5M]; 66 or more free standing PUDS currently on the MLS and half of them listed at more than $1M [one of them listed at $2.495M]; 195 condos currently on the MLS [one of them listed at $4.295M]; a median sales price of $1.2M; a median sales price for the handful of pending sales in escrow of $1.65M [“in speaking to some of the agents up there, quite a few have some big ticket items pending”]; recent sales of $13.95M, $8.95M, $5M, etc.; and we’re supposed to conclude the market is going gang busters because the median sales price continues to increase while 90% or more of all properties being put up for sale aren’t being sold?
I don’t think so Diane.
Certainly the agent [a Chase agent, interestingly] who marketed the recent $13.95M sale for over a year and who has now been handsomely compensated for her efforts is understandably “giddy” over the market. But for the vast remainder spinning the real estate good times on the north shore of Lake Tahoe are concerned [why don’t you ask this same agent about her $3.495M listing which has been on the market since last Halloween; which she lost to Dickson because it hadn’t sold; which has now recently re-listed with Chase; and which for some unknown reason, was increased in sales price from $3.2M? Or why don’t you ask her about her listing a couple of doors down which has been on the market for nearly the same length of time at $5.49M? Or why don’t you ask the many agents of the hundreds and hundreds of listings in the $1.1M-$2.5M range which are going absolutely nowhere?], not only do they need a drink of Kool-Aid; they need the whole pitcher!
Diane, just because sellers are unrealistic in their asking prices doesn’t mean your colleagues need to walk in lockstep. 330 or more Incline Village/Crystal Bay realtors simply can’t survive on 25 sales/month – I don’t care what the median price is.
Reno Ignoramus
I happen to be a bit familiar with Lake Tahoe from Incline to Glenbrook. Glenbrook, all by itself, has about 20 listings. All of them well over $1 million. Many of them listed with Chase. You all should make up a story and get inside the gate and take a drive around. It’s a bit comical. Between Chase and Sotheby signs it looks like a realtors convention. The premier listing in Glenbrook is for $15 million, and yes it is a Chase listing, and yes it is pending. (I think it is the only listing with an offer.)
So yes a Chase agent, who might have Chase as a last name, is going to have a big payday. So perhaps the $15 million and above market at Tahoe is booming, and perhaps from that we all ought to conclude Lake Tahoe really is different.