Approximately two-thirds of active residential real estate listings in Reno as of the first week of July are foreclosed home listings and they are driving home prices down, according to local real estate sales records.
Currently, there are about 3,000 properties in foreclosed home listings in Reno, the county seat of Nevada’s Washoe County.
Out of all active residential real estate listings in Reno, around 23 percent have had their prices reduced by an average of 11.5 percent within the 12-month period ended June 2009. Home prices were reduced by an average of $45,206 from $393,811, the average home price prior to the reduction.
According to real estate sales data, Reno’s price performance hovered near the nationwide price performance. Across the U.S., 24.6 percent of active residential real estate listings were foreclosed home listings, slightly above the 23-percent level in Reno. Home prices nationwide were reduced by an average of 10.4 percent, slightly below the 11.5-percent decrease in Reno.
Las Vegas, meanwhile, was able to reduce the percentage of its foreclosed home listings in comparison to all active residential real estate listings. The percentage went down to 20 percent.
But Las Vegas is still struggling with home price declines. In the first week of July, home prices in the area decreased by an average of 16 percent despite a slowdown in the growth of foreclosed home listings.
Real estate analysts in Reno said home price declines are partly due to the bigger percentage of investors and first-time home buyers in the market. They said these types of buyers are looking for bargain-priced properties, with many of them considering only properties listed at or below $250,000.
This finding prompted many sellers to list their properties at a lower price to attract prospective home buyers, oftentimes successfully boosting the prices of the properties.
A realtor said she received a lot of purchase offers when she listed at $199,000 a home previously offered for sale at $210,000. Because of the multiple bids, she was able to sell the property at $219,000 as buyers tried to outbid each other.
In contrast, the move-up or second-home markets have been crawling, as homeowners planning to move up could not sell their homes at the price they want. Another factor is the lower conforming loan limit set by the Federal Housing Administration for Washoe County, which is only $403,750.
With the FHA loan limit and lack of jumbo loans, higher-priced properties in Reno foreclosed home listings have not been moving.
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