This post by Ben Tedore
The numbers are in, and here’s a look at how the housing market in and around the Reno area fared in 2007. Not surprisingly, it wasn’t pretty, but the year end numbers actually showed less of a drop in median sales prices than I’d feared, and most people who have owned a home for more than the last couple of years are still coming out ahead in terms of value, thanks to the unprecedented run up in values from 2002-2005.
Assessor’s Data on New and Existing Home Sales:
Single family home sales were down across the board in 2007 – both new and existing homes experienced price decreases coupled with reduced sales. New single family home sales were down 38% in 2007 and existing single family home sales were down 29% — those are some pretty significant decreases in units from 2006. The median price of new homes was down 13% last year, and existing homes sold for roughly 7% less. That’s more than the decrease we saw in 2006 compared to the peak year of 2005, but overall that’s a fairly moderate decline in value relative to the increases immediately preceding the fall.
Regionally, the “New Southwest” part of town actually saw a 7% increase in new home sales and the median sales price remained flat from the previous year – not bad at all in light of how the rest of the Truckee Meadows performed. The rest of the area mostly saw fewer sales of new and existing homes coupled with lower transaction prices than in 2006.
Condo sales were a mixed bag. Existing condo sales were up in the second half of 2007 with a slight increase in sales price. New condo sales, though, were down 31% in the 4th quarter with a median sales price 3 percent greater than the previous year. This is good news for the area because it demonstrates that there is at least some sign of life in the market. With several new condo and townhouse projects slated for 2008 and 2009, this segment of the market should do relatively well.
It’s interesting to note what’s going on up at Incline Village at Lake Tahoe – if you’ve ever wondered if sales of high end homes performed differently than the rest of the market, here’s your proof that the ultra-rich are largely above such petty concerns as “markets,” “mortgages,” and “foreclosures.” Last year, sales of single family homes in Incline Village were up 10% from 2006, and the median sales prices were up 11%! Those are really strong numbers when you consider just how poorly the rest of the market has been performing. Lake Tahoe real estate is certainly still in high demand, economy be damned!
You’ve all seen the headlines and, yes, there was a sharp increase in the number of foreclosures in Washoe County in 2007 – a 614% increase for the year – and the number of foreclosures has been steadily rising each month since the beginning of 2006. Regionally, the Truckee Meadows have seen increased foreclosures in all areas of town; even the higher end communities were not immune to the effects of the careless lending practices.
Still, it’s important to keep in mind that although foreclosures were up 600% last year, the actual number of foreclosed homes was only 750 (compared to 105 in 2006). Considering there are over 160,000 housing units in Washoe County, having 750 foreclosures isn’t that dramatic relative to the total number of units.
There were 225 foreclosed homes which sold in 2007, amounting to roughly 5% of the total number of MLS resales last year. As of December 2007, 14 percent of the active listings in the Reno-Sparks area were bank-owned homes…and this number is sure to grow in 2008.