Reno Foreclosure Blog

As a Real Estate Appraiser I am constantly completing a “Mini Market Analysis” on almost every Residential appraisal I complete. Every few months I spend a little extra time researching the market condition of 2 or 3 neighborhoods within Reno and every 6 months I do a detailed analysis of the entire Reno home market.

I recently completed a more detailed analysis on January 22, 2010. Here is what I discovered.

Prices in the Reno area have declined 25% to 60% in the last 3 years (I have known these statistics for about a year now). The declining values “appeared” to have stabilized this last summer of 2009, but that was mostly due to the Governments “first time homeowner tax credit of $8,000”, which expired in November 2009 and was then extended from December 2010 through June of 2010. This resulted in about a 2 month period when the program was not available and I started to see prices drop again, due to limited buyers. Other factors, as stated in my previous blogs, are shadow inventory, increasing foreclosure numbers and the high unemployment rate. I am not going to discuss the details of these three factors today; instead, I am just going to give you a brief overview of my market analysis.

I did a detailed research of 6 areas in the Reno Metropolitan Statistical Area (MSA).

1. Spanish Springs/North Sparks

2. Stead

3. Cold Springs

4. Reno NW Suburb

5. Reno SW, including the Caughlin Ranch area and Galena/Mt Rose area

6. Carson City

Spanish Springs/North Sparks

Values declined approximately 45% but now appear to be stable, however marketing periods have increased and the number of Listings for sale are higher than normal. In the last 12 months sales consisted of 39% bank owned foreclosures (REO’s), 33% Short Sale properties and 28% “arms length” properties (no special conditions). Current Listings consist of 8% REO, 72% Short Sale and 20% “Arms length” properties.

Stead

Values declined approximately 55% to 60% but now appear to be stable. Marketing periods have increased. Listings for sale are higher than normal. In the last 12 months sales consisted of 60% bank owned foreclosures (REO’s), 29% Short Sale properties and 11% “arms length” properties (no special conditions). Current Listings consist of 15% REO, 80% Short Sale and 5% “Arms length” properties.

Cold Springs

Values declined 45% to 55% and still appear to be declining. Marketing periods have increased recently. The number of Listings for sale are higher than normal. In the last 12 months sales consisted of 52% bank owned foreclosures (REO’s), 32% Short Sale properties and 16% “arms length” properties (no special conditions). Current Listings consist of 10% REO, 81% Short Sale and 9% “Arms length” properties

Reno NW

Values declined approximately 40% but now appear to be stable, however marketing periods have increased and the number of Listings for sale are higher than normal. In the last 12 months sales consisted of 33% bank owned foreclosures (REO’s), 33% Short Sale properties and 34% “arms length” properties (no special conditions). Current Listings consist of 9% REO, 71% Short Sale and 20% “Arms length” properties

Reno SW, Caughlin/Galena

Values declined approximately 25% to 50% but now appear to be stable. Marketing periods have increased. Listings for sale are higher than normal. In the last 12 months sales consisted of 24% bank owned foreclosures (REO’s), 22% Short Sale properties and 54% “arms length” properties (no special conditions). Current Listings consist of 7% REO, 31% Short Sale and 62% “Arms length” properties.

Carson City/all areas

Values declined approximately 25% to 45% but now appear to be stable, however marketing periods have increased and the number of Listings for sale are higher than normal. In the last 12 months sales consisted of 33% bank owned foreclosures (REO’s), 22% Short Sale properties and 45% “arms length” properties (no special conditions). Current Listings consist of 15% REO, 33% Short Sale and 52% “Arms length” properties

There presently are fewer bank owned foreclosed properties on the market for sale, but they are only being replaced by pre-foreclosed (Short Sale) properties. 2010 will be the year of the Short Sale (There is a reason for this that I will discuss in a future blog).

Home values in five of the six areas appear to have stabilized, but it is my opinion that Reno will experience continued declining values into year 2010. I predicted in 2006 that home values in Reno would crash downward and by 2007 I stated prices would be cut in ½ before the crash was over. I now say Reno home values will fall another 10% before a recovery begins, and it will be a slow recovery.

Data was obtained from the local MLS.