Earlier this year when the nation pressed pause on the economy and unemployment rates jumped up significantly, many homeowners were immediately concerned about being able to pay their mortgages, and understandably so. To assist in this challenging time, two protection plans were put into place to help support those in need.

First, there was a pause placed on initiating foreclosures for government-backed loans. This plan started on March 18, 2020, and it extends at least through December 31, 2020. Second, homeowners were able to obtain forbearance for up to 180 days, followed by a potential extension for up to another 180 days. This way, there is a relief period in which homeowners have the opportunity to halt payments on their mortgages for up to one year.

Not Everyone Understands Their Options

The challenge, according to Matt Hulstein, Staff Attorney at non-profit Chicago Volunteer Legal Services, is, “A lot of homeowners aren’t aware of this option.”

There’s definitely traction behind this statement. In a recent survey by The National Housing Resource Center, housing counselors from across the country noted that many homeowners really don’t know that there is help available. The following graph indicates the reasons why people who are in this challenging situation are not choosing to enter forbearance:

The Urban Institute explained “530,000 homeowners who became delinquent after the pandemic began did not take advantage of forbearance, despite being eligible to ask for the plan…These responses reflect a need to provide better information to all homeowners. (Lump-sum payment is not the only repayment option.)

Additionally, 205,000 homeowners who did not extend their forbearance after its term ended in June or July became delinquent on their loans. We need to examine who these people are and why are they not extending their option.”

Clearly, a more focused effort on education about forbearance and relief programs may make a big difference for many people, and a clear understanding of their options is mission-critical. Some communities, however, have been impacted by the economic challenges of the pandemic more so than others, further confirming the need to deliver education more widely. The Urban Institute also indicates:

“Black and Hispanic homeowners have been hit harder than white homeowners…nearly 21 percent of both Black and Hispanic homeowners missed or deferred the previous month’s mortgage payment, compared with 10 percent of white homeowners and about 13 percent of all homeowners with payments due.”

Options Available

It’s important to note that any homeowner experiencing financial hardship has the right to request forbearance. If you’re unfamiliar with the plans available, contact your mortgage provider (the company you send your mortgage payment to each month) to discuss your options. It is a necessary next step, as you may qualify for mortgage relief options or forbearance.

One option many homeowners may not realize they have is the ability to sell their house in this time of need. With the growing equity that homeowners have available today, making a move might be the best option to protect your financial future.

Bottom Line

If you need additional information on your options, you can review the Protect Your Investment guide from the National Association of Realtors (NAR) and the Homeowner’s Guide to Success from the Consumer Financial Protection Bureau (CFPB). For the majority of people, our home is the most important asset we have, and you should use all the help available right now to be able to preserve your investment.

** Data in this report reflect market activity from SEPTEMBER 2020 compared to the previous month and year.  Information is gathered from the Reno-Sparks Association of Realtors® (RSAR) for the Greater Reno-Sparks region via Northern Nevada Regional Multiple Listing Service (www.nnrmls.com).  Data accounts for single-family resale residences only, and excludes townhouses/condos, manufactured/modular and new construction.

• Median Sales Price, at $440,000 for single-family re-sale properties in Reno and Sparks held steady in September 2020, posting a mere 1% dip compared to August 2020, and has shown an increase of 11% year-over-year. 

• The Average Sold Price per Square Foot continues its upward trend we have been experiencing over the last several months.  Single-family residences sold in Reno-Sparks in September 2020 sold for an average of $249/sqft, a 5% increase month-over-month and an 10% increase year-over-year.

• Though the Average Sold Price per Square Foot is $249/sqft, once again, homes that sold in September 2020 for over $750k appear to be pulling this average upward.  Homes that sold between $1M and $1.5M averaged $327/sqft, and homes that sold for over $1.5M averaged $439/sqft!

• The # of Units Sold in September ticked up 4% month-over-month from 644 to 680.  The # of Units Sold is 12% higher than this same time last year.  Please note that homes closing in September likely went into contract in August 2020, accounting for a typical 30-day escrow.

• As seen in the graph above, the bulk of homes that closed escrow in September 2020 sold between $300k & $500K.  These sales accounted for 60% of the total market share.

• September’s Absorption Rate continued its downward trajectory and is at a new low of 0.7 Months Supply of Inventory. a staggering 71% drop year-over-year and a 25% decrease month-over-month.  MSI absorption rate represents the time it would take to “sell out” of the Reno-Sparks inventory at the current rate of sale if no new listings were added to the market.  A balanced market is around 5-6 months of supply, therefore, this is a profoundly “seller’s market.”

• As just mentioned, a “Balanced Market” sees about 5-6 months of inventory.  Even the high-end luxury market is realizing only 3.5 Months Supply of Inventory, and is very much a “Seller’s Market” as well, while the $300k-$500k inventory is less than 1/2 a month of supply!

• The # of Days from Listing to Contract since the COVID 19 economic shut-down in March has averaged 36 days.  In September 2020 the overall average Days to Contract followed this trend.  Single family residences are taking about 30% less time to receive and acceptable offer this year than in September 2019.  These averages account for all price ranges.

• While homes priced $300k-$400k received an accepted offer an average of only 16 days from listing, the upper price points of $$1M+ did take an average of a few months to accept an offer.

• Over the last 4 months, the # of New Contracts has lingered around 720 per month.  During the month of September 2020 we saw 34% more new contracts than the same month last year and 8% fewer new contracts than the previous month.

• The # of New Listings to hit the market dropped 8% month-over-month, while decreasing 10% compared to September 2019.

SUMMARY:

• So why are folks moving to Northern Nevada?  They have recently found that they can work from anywhere… They are moving here for the jobs that are being created here… Their companies are moving them here.  They are purchasing their retirement homes (both ahead of and after their retirement date)… They loathe the tax burdens of our neighboring state… They are threatened by wildfires and/or have devastatingly lost their home because of them.  Pick your reason… the mass influx of new Northern Nevadans is real.
• While the Median Sale Price in Reno-Sparks is holding steady, so too are low interest rates.  Sub-3% interest rates for many qualified buyers may be keeping those buyers in the market.
• The combination of historically low 0.7 Months Supply of Inventory and high buyer demand continue to add fuel to the very hot residential real estate market today.
• The Average Sold Price per Square Foot continues is upward trend, and appears to be driven by the high-end luxury market.
• Average days from listing to contract remains low at 36 days.
• The # of New Contracts in September 2020 continue to rise.
• If you are considering selling your home to upsize, downsize or relocate, I am here to assist you with experienced, professional services to make your transition as smooth as possible.  Email direct dhallerbach@intero.com or reach me by cell at 775-233-0682.  I am so happy to help!
• Buying a home in Northern Nevada?  Whether it’s your first home, second or third, vacation home or investment property, I have the knowledge and highest level of skill to navigate you through the process.  Call me at 775-233-0682.

If you’re thinking about moving, selling your house this fall might be the way to go. Here are four highlights in the housing market that may make your decision to sell this fall an easy one.

1. Buyers Are Actively in the Market

ShowingTime, a leading real estate showing software and market stat service provider, just reported that buyer traffic jumped 60.7% compared to this time last year. That’s a huge increase.

It’s clear that buyers are ready, willing, and able to purchase – and they’re in the market right now. In many regions of the country, multiple buyers are entering bidding wars to compete for the home they want. Take advantage of the buyer activity currently in the market so you can sell your house in the most favorable terms.

2. There Are Not Enough Homes for Sale

In the latest Existing Home Sales Report, the National Association of Realtors (NAR) announced that there were only 1.49 million units available for sale. That number was down 18.6% from one year ago. This means in the majority of the country, there aren’t enough homes for sale to satisfy the number of buyers.

Due to the health crisis, many homeowners were reluctant to list their homes earlier this year. That will change as the economy continues to recover. The choices buyers have will increase going into the new year. Don’t wait until additional sellers come to market before you decide to make a move.

3. The Process Is Going Quickly

Today’s ultra-competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to the latest Origination Insights Report from Ellie Mae, the time needed to close a loan is just 49 days.

4. There May Never Be a More Important Time to Move

You’ve likely spent much of the last six months in your current home. Perhaps you now realize how small it is, and you need more space. If you’re working from home, your children are doing virtual school, or you just need more space, your current floor plan may not work for your family’s changing needs.

Homebuilders are beginning to build houses again, so you can choose the exact floor plan to match what your family needs, and you can make sure the outdoor space is what you want too.

Bottom Line

The housing market is prime for sellers right now, so let’s connect to get the process started this fall. If the timing is right for you and your family, the market is calling your name.

Every day in the U.S., roughly 10,000 people turn 65. Prior to the health crisis that swept the nation in 2020, most people had to wait until they retired to make a move to the beach, the golf course, or the senior living community they were looking to settle into for their later years in life. This year, however, the game changed.

Many of today’s workers who are nearing the end of their professional careers, but maybe aren’t quite ready to retire, have a new choice to make: should I move before I retire? If the sand and sun are calling your name and you have the opportunity to work remotely for the foreseeable future, now may be a great time to purchase that beach bungalow you’ve always dreamed of or the single-story home in the sprawling countryside that might be a little further out of town. Whether it’s a second home or a future retirement home, spending the next few years in a place that truly makes you smile every day might be the best way to round out a long and meaningful career.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“The pandemic was unexpected, working from home was unexpected, but nonetheless many companies realized that workers can be just as productive working from home…We may begin to see a boost in people buying retirement homes before their retirement.”

According to the 20th Annual Transamerica Retirement Survey, 3 out of 4 retirees (75%) own their homes, and only 23% have mortgage debt (including any equity loans or lines of credit). Since entering retirement, almost 4 in 10 retirees (38%) have moved into a new home. They’re making a profit by selling their current homes in today’s low inventory market and using their equity to purchase their future retirement homes. It’s a win-win.

Why These Homeowners Are Making Moves Now

The health crisis this year made us all more aware of the importance of our family and friends, and many of us have not seen our extended families since the pandemic started. It’s no surprise, therefore, to see in the same report that 32% of those surveyed cited the top reason they’re making a move is that they want to be closer to family and friends (See graph here):

The survey also revealed that 73% percent of retirees currently live in single-family homes. With the overall number of homes for sale today hitting a historic low, and with the buyer demand for single-family homes skyrocketing, there’s never been a more ideal time to sell a single-family home and make a move toward retirement. Today’s market has the perfect combination of driving forces to make selling optimal, especially while buyers are looking to take advantage of low interest rates.

If you’re one of the 73% of retirees with a single-family home and want to move closer to your family, now is the time to put your house on the market. With the pace homes are selling today, you could essentially wrap up your move – start to finish – before the holidays.

Bottom Line 

Whether you’re looking to fully retire or to buy a second home with the intent to use it as your retirement home in the future, the 2020 fall housing market may very well work in your favor. Let’s connect today to discuss your options in our local market.

One of the best ways to build your family’s financial future is through homeownership. Recent data from the Federal Reserve indicates the net worth of a homeowner is actually over 40 times greater than that of a renter. Maybe it’s time to start thinking about buying a home, especially when interest rates are still historically low, increasing the purchase power of buyers today.

Every three years the Survey of Consumer Finances shows the breakdown of how owning a home helps build financial security. In the graph below, we see that the average net worth of homeowners continues to grow, while the net worth of renters tends to hold fairly steady and be significantly lower than that of homeowners. The gap between owning and renting just keeps getting wider over time, making homeownership more and more desirable for those who are ready.

Owning a home is a great way to build family wealth.

For many families, homeownership serves as a form of ‘forced savings.’ Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity you have in your home (See chart below):

The impact of home equity is part of why Gallup reports that Americans picked real estate as the best long-term investment for the seventh year in a row. According to this year’s survey, 35% of Americans chose real estate over stocks, savings accounts, gold, and bonds.

Today, there are great opportunities available for those planning to buy a home. The housing market has made a full recovery, and all-time low interest rates are giving homebuyers a big boost in purchasing power. If you’re ready, buying a home this fall can set you up to increase your net worth and create a safety net for your family’s future.

Bottom Line

To learn how you can use your monthly housing cost to build your family’s net worth, let’s connect so you have a trusted professional to guide you through the home-buying process.

Last Friday Sept 4, the Bureau for Labor Statistics released their Employment Report for August 2020. The big surprise was that the unemployment rate fell to 8.4%, a full percent lower than what many analysts had forecasted earlier in the week. Though it is tough to look at this as great news when millions of Americans are still without work, the number of unemployed is currently much lower than most experts had projected it would be just a few months ago.

Not Like the Great Depression or Even the Great Recession

Jason Furman, Professor of Practice at Harvard explained:

“An unemployment rate of 8.4% is much lower than most anyone would have thought it a few months ago. It is still a bad recession but not a historically unprecedented event or one we need to go back to the Great Depression for comparison.”

During the Great Depression, the unemployment rate was over 20% for four consecutive years (1932 – 1935). This April, the rate jumped to 14.7%, but has fallen each month since.

During and after the Great Recession (2007-2009), the unemployment rate was at 9% or greater for thirty consecutive months (April 2009 – October 2011). Most economists believe the current rate will continue to fall monthly as the economy regains its strength.

What Happens Going Forward?

The outcome will be determined by how quickly we can contain the virus. In their last Economic Forecasting Survey, the Wall Street Journal reported the economists surveyed believe the annual unemployment rates will be 6.6% in 2021 and 5.5% in 2022. Though that will still be greater than the 3.5% rate that we saw earlier this year, it is lower than the annual rate reported in 2011 (8.5%), 2012 (7.9%), and 2013 (6.7%).

Bottom LineU

There are still millions of Americans struggling through this economic downturn. There is, however, light at the end of the tunnel. The unemployment situation did not get as bad as many had predicted, and the recovery is taking place faster than most thought would happen.

The year 2020 will be remembered as one of the most challenging times of our lives. A worldwide pandemic, a recession causing historic unemployment, and a level of social unrest perhaps never seen before have all changed the way we live. Only the real estate market seems to be unaffected, as a new forecast projects there may be more homes purchased this year than last year.

As we come to the end of this tumultuous year, we’re preparing for perhaps the most contentious presidential election of the century. Today, it’s important to look at the impact past presidential election years have had on the real estate market.

Is there a drop-off in home sales during a presidential election year?

BTIG, a research and analysis company, looked at new home sales from 1963 through 2019 in their report titled One House, Two House, Red House, Blue House. They noted that in non-presidential years, there is a -9.8% decrease in November compared to October. This is the normal seasonality of the market, with a slowdown in activity that’s usually seen in fall and winter.

However, it also revealed that in presidential election years, the typical drop increases to -15%. The report explains why:

“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty.”

Are those sales lost forever?

No. BTIG determined:

“This caution is temporary, and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”

In a separate study done by Meyers Research & Zonda, Ali Wolf, Chief Economist, agrees that those purchases are just delayed until after the election:

“History suggests that the slowdown is largely concentrated in the month of November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year.”

Will it matter who is elected?

To some degree, but not in the overall number of home sales. As mentioned above, consumer confidence plays a significant role in a family’s desire to buy a home. How may consumer confidence impact the housing market post-election? The BTIG report covered that as well:

“A change in administration might benefit trailing blue county housing dynamics. The re-election of President Trump could continue to propel red county outperformance.”

Again, overall sales should not be impacted in a significant way.

Bottom Line

If mortgage rates remain near all-time lows, the economy continues to recover, and unemployment continues to decrease, the real estate market should remain strong up to and past the election.

Homebuying has been on the rise over the past few months, with record-breaking sales powering through the market in June, July and August. Buyers are actively purchasing homes, and the momentum is continuing into the fall. It is, however, becoming harder for buyers to find homes to purchase. If you’ve been thinking about selling your house, the coming weeks might just be the timing you’ve been waiting for.

According to the Pending Home Sales Report from the National Association of Realtors (NAR):

“Pending home sales in July achieved another month of positive contract activity, marking three consecutive months of growth.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 5.9% to 122.1 in July. Year-over-year, contract signings rose 15.5%. An index of 100 is equal to the level of contract activity in 2001.”

This means that for the past several months, buyers have signed an increasing number of contracts to purchase homes – well above where the market was at this time last year. Lawrence Yun, Chief Economist at NAR notes:

“We are witnessing a true V-shaped sales recovery as homebuyers continue their strong return to the housing market…Home sellers are seeing their homes go under contract in record time, with nine new contracts for every 10 new listings.”

Below is a graph that shows the impressive recovery of homes sales compared to previous years. The deep blue v marks the slowdown from this spring that turned into an exponential jump in sales that followed through the summer, skyrocketing above years past (see graph to right):

What Does This Mean for Sellers?

If you were thinking about putting your house on the market in the spring, but decided to wait due to the health crisis, it may be time to make your move. Buyers are in the market right now. With so few homes available to purchase, homeowners today are experiencing more bidding wars, creating an optimal time to sell.

Is This Trend Going to Continue?

As CNBC notes, there are no signs of slowing buyer demand this fall:

“The usual summer slowdown in the housing market is not happening this year. Buyers continue to show strong demand, spurred by the new stay-at-home world of the coronavirus and by record low mortgage rates.”

Danielle Hale, Chief Economist at realtor.com, concurred:

“In a typical year in the housing market, buyer interest begins to wane before seller interest causing the usual seasonal slowdown as we move into the fall. Due to a delayed spring season and low mortgage rates, we could see buyer interest extend longer than usual into the typically quieter fall. Whether this means more home sales will depend on whether sellers participate or decide to stay on the sidelines.”

As Hale mentioned, homeowners who are willing to sell their houses right now will play a big role in whether the trend continues. The market needs more homes to satisfy ongoing buyer demand. Maybe it’s time to leverage your equity and move up while eager home shoppers are ready to purchase a house just like yours.

Bottom Line

If your current home doesn’t meet your family’s changing needs, let’s connect to help you sell your house and make the move you’ve been waiting for all year.

** Data in this report reflect market activity from AUGUST 2020 compared to the previous month and year.  Information is gathered from the Reno-Sparks Association of Realtors® (RSAR) for the Greater Reno-Sparks region via Northern Nevada Regional Multiple Listing Service (www.nnrmls.com).  Data accounts for single-family resale residences only, and excludes townhouses/condos, manufactured/modular and new construction.

• In August 2020, the Median Sales Price for single-family re-sale properties in Reno and Sparks continues it’s upward trend for the 3rd straight month.  The Median Sales Price increased 2.5% month-over-month and 11.5% year-over-year to $444,900.

• The Average Sold Price per Square Foot has also been steadily rising over the last several months.  The average single-family residence sold in Reno-Sparks in August for $239/sqft, a 7% increase year-over-year.

• Though the Average Sold Price per Square Foot is $239/sqft, homes selling over $750k appear to be the reason the average is pulling upward.  Homes that sold between $750k and $1M averaged $259/sqft, homes that sold between $1M and $1.5M averaged $334/sqft, and homes that sold for over $1.5M averaged $375/sqft.

• The # of Units Sold dipped 13.4%, month-over-month from 744 to 644.  The # of Units Sold in August 2020 is 3.2% higher than August 2019.  Please note that sales closing in August likely went into contract in July 2020, accounting for a typical 30-day escrow.

• August’s Absorption Rate continued to steadily decline and is at a historic low of 0.8 Months Supply of Inventory. a significant 65% drop from August 2019 and a 14% decrease from July 2020.  MSI absorption rate represents the time it would take to “sell out” of the Reno-Sparks inventory at the current rate of sale if no new listings were to come to market.  A balanced market is around 5-6 months of supply, therefore, we are solidly in a “seller’s market.”

• The Average # of Days from Listing to Contract in August 2020 inched down one day compared to July 2020.  It took an average of 36 days from listing on MLS until acceptance of an offer.  Single family residences are taking about 18.3% less time to receive and acceptable offer this year than in August 2019.  These averages account for all price ranges.

• With competition among buyers in multiple offer situations, the average SFR in Reno-Sparks received 99.5% of asking price in August 2020.  Many homes are selling above asking price and buyers are waiving appraisal outcomes to secure the property today.

• The # of New Contracts popped up in August 2020 with 794 accepted offers in the pipeline to close escrow in September.  August 2020 saw 33% more new contracts than the same month last year and 15% more new contracts than the previous month.

• The # of New Listings to hit the market dipped 1% month-over-month, while decreasing 12.4% compared to August 2019.

SUMMARY:

• Californians continue to seek relief from a hostile tax environment, the destruction of wildfires, severe COVID-19 restrictions and ongoing congestion to find that Northern Nevada is their refuge.
• Low 0.8 months supply of inventory and high buyer demand is fueling the very hot residential real estate market today.
• The Median Sales Price and Average Sold Price per Square Foot are steadily rising.
• Average days from listing to contract continues to drop.
• Mortgage rates are still historically low, making home purchasing more affordable regardless of rising prices.
• The # of New Contracts in August 2020 continue to rise.
• If you are considering selling your home to upsize, downsize or relocate, I am here to assist you with experienced, professional services to make your transition as smooth as possible.  Email direct dhallerbach@intero.com or reach me by cell at 775-233-0682.  I am so happy to help!
• Buying a home in Northern Nevada?  Whether it’s your first home, second or third, vacation home or investment property, I have the knowledge and highest level of skill to navigate you through the process.  Call me at 775-233-0682.