After rocketing skyward for a couple years Notices of Default in Washoe County finally peaked in April of this year at 457 NODs. In the five months following April’s peak, NODs began trending downward slightly. For example, September’s 422 NODs represented an 8% decline from April’s peak.
Well, I suppose good things can’t last forever. Washoe County Notices of Defaults took a HUGE jump in October. The 582 NOD’s filed in October represented a month-over-month increase of 38%! …so much for flushing the foreclosures out of the inventory.
I took a quick look at the current inventory of homes listed for sale in Reno and Sparks, Nevada. Today 21% of listings are bank owned. Looks like this percentage is going to get a lot bigger.
On the resale front, resales held steady at 454 units. New home sales, however plummeted to only 114 for the month of October – the lowest level seen since I began tracking these numbers. This represents a 34% plunge from September’s new home sales, and a 49% drop year-over-year.
Click on the charts below to enlarge.
Thank you to our friends at Ticor Title for providing this data and these charts.
Steve
Oh Darn it! I hate that. Just when we thought that this was a great time to buy.
Sully
Wow!
Phil
That was one heck of a jump in the NOD’s.
Didn’t I hear somehwere that 48% of the homes in northern nevada where upside down, i.e. owe more than they are worth?
If that is the case I can only see one direction of the NOD’s….UP!
Maybe Harry will help us all out and reserve some of the 700 billion for Nevada!
Actaully I see all of this as a second home issue. Too many second homes for people here, and not enough jobs for families to live in them. You have to wonder what the cities where thinking what was causing the rapid growth here. How much of the jobs where created because of the growth in construction, real estate, …. Now that the flow has stopped the downward pressure on the market is huge.
Our politicians have got to think long term here. Jobs are the key.
The local comany (somewhere off of Rock as I recall) who are building wind turbines and are sending the manufacuring to Ohio is a big concern of mine.
I see no leadership to correct any of this mess at local, state, or the federal level. At least the biggest little city in america might still be appropriate.
Inclinejj
A lot of the servers cancelled a lot of the foreclosures and took them off the schedule. most of these houses are empty and the people are long gone.I expect them to pop up a few months from now..
I think this massive loan modification program will prolong the slump
Sully
I see no leadership to correct any of this mess at local, state, or the federal level.
Phil, I have never seen any leadership at these levels – period. 🙂
Phil
Just when I though our government is doing nothing I read in the RJG about a 1.4 million federal program to help Sparks become a city that does “Flip this house”.
Sully
Yeah, and it won’t cost the citizens of Sparks any money because it comes from the Federal Govt. Wow!
Does everyone in Sparks NOT pay federal income taxes?
DonC
Here in SoCal the bottom of the market appears to have hit bottom. There are a lot of foreclosures, and the price hit is extreme, in the 30% range, but there are tons of bidders. Last week I was talking to a mortgage broker who said that it was a huge pain because you had to qualify fifteen or twenty clients in order to find one who had their big accepted.
At the higher end sellers are just holding. So there just isn’t any activity. Zillow has this strange distinction between selling prices and value based on sharply reduced sales but not a pronounced drop in prices. I don’t fully understand the rationale but as a practical matter it means the prices on its web site are, shall we say, a tad overstated.
This seems to be the pattern in Reno as well. If these new NOD are for higher end homes perhaps we’ll see a new pattern.
CommercialLender
Not emperical, but if you look at the chart of NOD’s and draw in your mind’s eye a quick regression line, you’ll see the past few months might well have been the anomoly and assuming the recent Oct data is a tad overstated, you’d have otherwise expected to hit around 525-550 NODs/mo in Oct, en route in Nov to a solid 550-565. (Someone with time on their hands can figure out exactly…. and, when Nov’s data comes out, see if my eyeballing of this might prove accurate.)
What I surmise is happening or happened over the summer is that the lenders extended their timelines for NOD filings from say 90 days to say 180, or that the NODs themselves were backlogged during the summer months due to other forces (vacations, waiting gov’t bailouts, staffing at the county NOD offices?, borrowers begging for extensions, etc.).
Could it the banks were playing politics to see what bills would be passed, what the $700B bailout had in it, who was likely to be elected, etc? If so, then you are about to see a bunch more NODs hit now that the Feds are saying “nevermind” to buying the ‘troubled assets’ from banks and instead trying to buy banks en masse. The banks now will dump at ever lower prices their bad assets commensurate with how much money the Fed doles out to each of them.
And that, my friends, might signal the beginning of the bottom.
Sully
Credit ratings agency Moody’s Investors Services said late Monday that serious delinquencies on alt-A mortgages originated in 2006 and 2007 has increased sharply over the past six months.
Hmmm, they’re just not going away! 🙂
Inclinejj
DonC said, in November 18th, 2008 at 11:40 am Here in SoCal the bottom of the market appears to have hit bottom. There are a lot of foreclosures, and the price hit is extreme, in the 30% range, but there are tons of bidders. Last week I was talking to a mortgage broker who said that it was a huge pain because you had to qualify fifteen or twenty clients in order to find one who had their big accepted
DonC..Where in SoCal are you talking about..Some areas in Riverside County are down over 50%
greenNV
At least on the Fanny/Freddy/FHA loans, it looks like the only way to get a mortgage rework is to be a least 3 months past due. A lot of folks are weighing the FICO vs. reward equation, and I think many will sacrifice their credit scores to get in line for a principal reduction. That will mean escalating NODs.
Gross NODs went up from 587 in September to 752 in October, a 28% increase. But Net NODs increased 38% from 422 to 582 in October.
Excepting a few goofy filings, the difference between Gross and Net filings is the duplication caused by HOAs finally getting sick of waiting for payment, and filing NODs instead of just property liens. They represent about 28% of all NOD filings today, vs. about 3% a year and a half ago. That smells a lot like desperation and closed swimming pools and golf courses on the horizon to me.
Guy Johnson
I just learned from my contact at Ticor that the cause of the huge spike in October NODs was multiple lots in The Foothills at Wingfield Village, that were owned by Foothills Village Owner, LLC (aka Reynen & Bardis) going NOD all at the same time.
billddrummer
To Guy,
Your contact is spot on. There were more than 60 filings related to Foothills Village Owner LLC, dealing with the vacant lots left in the Foothills Village project that was foreclosed on by Nevada State Bank earlier this year. (If you recall, the project had 7 partly finished houses in it, and 100+ vacant lots.)
Most of those filings were by the HOA, and were amounts less than $2,000, in most cases. But then there were also 6 filings on Morros Construction, and a couple on other sagging builders.
I wonder how long it will take to untangle R & B’s stuff. It was beyond comprehension a couple of years ago, and it probably got worse.
Guy Johnson
billddrummer, your sixty filings is pretty close. My contact tells me it’s about 68 lots.