Reno/Sparks Homes and Real Estate Market Reports October 2011

Summary:

• October home sales in Washoe County are the fourth highest home sales for an October in history and outpaces October 2010 by 15 percent. This is the first month where the year-over-year comparison is not influenced by the tax credit incentives, thus a positive sign that sales remain healthy. Also, we have seen only moderate fluctuations in median price for the past seven months. With the majority of new listings entering the market at the under $150,000 and a majority of sales occuring in this same price range, we are cautiously optimistic that prices are at the bottom.

Reno/Sparks Median Sales Price

• October 2011 median price was down 1% to $148,500 compared to $150,000 in September 2011.
• Median price is defined as the mid-point, where, for the time period identified, the price for one-half of the sales are higher and one-half are lower.

Reno/Sparks Homes Price per Square Foot Solds

• Price per square foot is $89.65
• Price per square foot by area groups, as provided in the Detailed Report, is a good way to compare similar homes for current value.

Reno/Sparks Homes Sold

• October ended the month with 483 sold transactions, down 14.7% from the prior month.
• Sales are up 15.3% from the same period last year. For the first time in over a year, the October 2011 comparison of year-over-year figures is a comparison without the influence of tax incentives.

Average Days on Market

• The average days on market are 147 days, up 9% from September 2011.

Days on Market (DOM) by Special Conditions

• Short sales continue to influence the average days on market at 214 DOM.
• Properties with no special conditions, and Other show a range of between 131 and 149 DOM and have been trending up the last couple months.
• REO properties average days on market remain level at 97.

Reno/Sparks Homes New Listings

• 516 new listings were taken in October compared to 617 in September, a 17% decrease.
• Distressed New Listings by Special Conditions.
• 68% of new October listings were distressed - 39% (201) Short Sales; 28% (147) REO; No special conditions 32% (164) and Other less than 1% (4).

Status of Pending

• Active Pending - Short Sales represents 61.2% of the total active pendings; Active Pending Loan equals 17.7%; Pending No-show represents 16.2%; Active Pending call 4.5%; and Active Pending House less than 1%.

Reno/Sparks Homes Months Supply of Inventory (Unsold Inventory divided by Sales per Month)

• As of October 30, there was 6.5 months of unsold inventory based on the October sales rate.

Historical Months Supply of Inventory

• Historical Months Supply of Inventory show that October MSI is down to 6.5 months compared to September 2011 at 6, and down 25% from October 2010.
• Eight of the past twelve months, the market has been what is defined as balanced. In the past 24 months, the market has remained as primarily a buyer's market.
• The National Association of REALTORS® describes a balanced market as between 5 and 7 months supply.
• Unsold inventory includes Active Pendings. This method of reporting months supply of inventory follows the industry standard of including all pending sales remaining in active status in the active inventory.

Conclusion

• October home sales at 483 are the fourth highest home sales for a October in history. The number outpaces October 2010 sales by 15%. October 2010 was the final month of the tax incentivized period. This is the first month where the year-over-year comparison is not influenced by the tax credit incentives. Going forward, we will be comparing the year-over-year sales period without the artificial influence of a tax credit.
• Year-to-date 2011 home sales (4,862) numbers are up 8% over 2010 home sales (4,478). We are optimistic that the sales number will outpace 2010.
• October's median price of $148,500 was down less than 1% from September. The median price has traded in the 4% range for the past six months. Sales at under $150,00 represented 50% of the total sales for the month. With this trend, it's understandable why there is downward pressure on the median price.
• Freddie Mac reported that the 30-year fixed rate loan dropped to 4.07%, compared to 4.11% last month. This is the lowest rate reported since Freddie Mac began tracking rates in 1971. Sources report that mortgage interest rates should gradually rise from today's record lows and reach 4.5% by the middle of 2012.
• A qualified homebuyer purchasing a home priced at $150,000 with a 3.5% down payment, at 4.07% interest rate will have a monthly payment of approximately $700,000 principal and interest.
• According to Lawrence Yun, NAR Chief Economist, "Housing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year. Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. If credit restrictions ease, there is optimism that it will open the door for more home buyers to take advantage of current opportunities.

To read the complete October report, complete with charts, graphs and 5 year history.

To read RSAR Detailed Reports, Oct 2011 report and previous months and years.

Report courtesy of Reno/Sparks Association of Realtors® with date from NNRMLS.