According to the latest CoreLogic Home Price Insights Report, nationwide home values increased by 8.2% over the last twelve months. The dramatic rise was brought about as the inventory of homes for sale reached historic lows at the same time buyer demand was buoyed by record-low mortgage rates. As CoreLogic explained:
“Home price growth remained consistently elevated throughout 2020. Home sales for the year are expected to register above 2019 levels. Meanwhile, the availability of for-sale homes has dwindled as demand increased and coronavirus (COVID-19) outbreaks continued across the country, which delayed some sellers from putting their homes on the market.
While the pandemic left many in positions of financial insecurity, those who maintained employment and income stability are also incentivized to buy given the record-low mortgage rates available; this is increasing buyer demand while for-sale inventory is in short supply.”
Where will home values go in 2021?
Home price appreciation in 2021 will continue to be determined by this imbalance of supply and demand. If supply remains low and demand is high, prices will continue to increase.
According to the National Association of Realtors (NAR), the current number of single-family homes for sale is 1,080,000. At the same time last year, that number stood at 1,450,000. We are entering 2021 with approximately 270,000 fewer homes for sale than there were one year ago.
However, there is some speculation that the inventory crush will ease somewhat as we move through the new year for two reasons:
1. As the health crisis eases, more homeowners will be comfortable putting their houses on the market.
2. Some households impacted financially by the pandemic will be forced to sell.
Low mortgage rates have driven buyer demand over the last twelve months. According to Freddie Mac, rates stood at 3.72% at the beginning of 2020. Today, we’re starting 2021 with rates one full percentage point lower than that. Low rates create a great opportunity for homebuyers, which is one reason why demand is expected to remain high throughout the new year.
Taking into consideration these projections on housing supply and demand, real estate analysts forecast homes will continue to appreciate in 2021, but that appreciation may be at a steadier pace than last year. Here are their forecasts:
There’s still a very limited number of homes for sale for the great number of purchasers looking to buy them. As a result, the concept of “supply and demand” mandates that home values in the country will continue to appreciate.
Consistency is the name of the game when applying for a mortgage. Be sure to discuss any changes in income/employment, assets or credit with your lender. Open and honest communication with your loan officer is paramount so you don’t unintentionally jeopardize your application. See below for some of the key activities to avoid:
At the onset of the economic disruptions caused by the COVID pandemic, the government quickly put into place forbearance plans to allow homeowners to remain in their homes without making their monthly mortgage payments. Today, almost three million households are actively in a forbearance plan. Though 29.4% of those in forbearance have continued to stay current on their payments, many have not.
Yanling Mayer, Principal Economist at CoreLogic, recently revealed:
“A distributional analysis of forborne loans’ payment status reveals that more than one third (39.1%) of all forborne loans are now 150+ days behind payment, while as many as 1-in-4 (25.5%) are 180+ days past due.”
These homeowners have been given permission to not make their payments, but the question now is: how many of them will be able to catch up after their forbearance program ends? There’s speculation that a forthcoming wave of foreclosures could be the result, and that could lead to another crash in home values like we saw a decade ago.
However, today’s situation is different than the 2006-2008 housing crisis as many homeowners have tremendous amounts of equity in their homes.
What are the experts saying?
Over the last 30 days, several industry experts have weighed in on this subject.
“We may very well see a meaningful increase in the number of homes listed for sale as these borrowers choose to sell at what is arguably an intermediate top in the market and downsize to more affordable homes rather than face foreclosure.”
“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock. It is a lack of sufficient equity, the second component of the dual trigger, that causes a serious delinquency to become a foreclosure.”
“With a greater cushion of equity, troubled homeowners have dramatically improved options: a greater ability to access funding (e.g. home equity lines) to keep paying monthly expenses until family finances might recover, improved ability to qualify for and support a loan modification, and, if push comes to shove, the ability to sell the home and monetize their increased net worth while reducing monthly payment obligations. So, what should lenders and servicers expect: a large number of foreclosures or only a modest increase? I believe the latter.”
With today’s positive equity situation, many homeowners will be able to use a loan modification or refinance to stay in their homes. If not, some will go to foreclosure, but most will be able to sell and walk away with their equity.
Won’t the additional homes on the market impact prices?
Distressed properties (foreclosures and short sales) sell at a significant discount. If homeowners sell instead of going into foreclosure, the impact on the housing market will be much less severe.
We must also realize there is currently an unprecedented lack of inventory on the market. Just last week, realtor.com explained:
“Nationally, the number of homes for sale was down 39.6%, amounting to 449,000 fewer homes for sale than last December.”
The Months Supply of Inventory in Reno-Sparks was 74% lower in December 2020 compared to December 2019. It’s important to remember that there is a sever shortage of homes for sale in the last several months, and inventory remains extremely low.
Nationally, the market has the potential to absorb half a million homes this year without it causing home values to depreciate.
The pandemic has led to both personal and economic hardships for many American households. The overall residential real estate market, however, has weathered the storm and will continue to do so in 2021.
THE WEEKEND WARRIOR
** Data in this report reflect market activity from DECEMBER 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.
- For the second straight month, the Median Sales Price for single-family, re-sale properties in Reno and Sparks combined, held steady at $450,000. The Median Sales Price is 14% higher compared to the same time last year when it was $394,000.
- WOW! LOOK HOW FAR WE’VE COME? Over the last 5 years, the Median Sales Price for single family residences in just RENO alone has increased 70%, from $295,000 to $1/2 Million!
- The Average Sold Price per Square Foot has jumped 16.5% during December 2020 compared to December 2019, and has crawled up 3% month-over-month. This average represents properties sold over ALL price ranges. For a breakdown of the Average Sold Price per Square Foot by Price Range, refer to the chart below.
- Homes that sold in December 2020 under $1M averaged around $246/square foot, while the upper price ranges cashed-in at $340/square foot for the 24 homes that sold in the $1M to $1.5 M range, and $443/square foot for the 13 homes that sold over $1.5M.
- The # of Units Sold has steadily declined over the last 4 months, a common market trend that usually begins mid-fall and runs through mid-winter. We saw a slight increase in the number of single-family homes sold in Reno-Sparks (4% more) in December 2020 compared to December 2019.
- See above for the price distribution of single family homes that sold in Reno-Sparks during December 2020.
- Just when we thought the housing inventory could not get any more minimal, the Months Supply of Inventory dropped 32% month-over-month and is a staggering 74% lower than last year. MSI absorption rate represents the time it would take to completely “sell out” of the Reno-Sparks inventory at the current rate of sale if no new listings were added to the market. We currently have about a 2-week supply of inventory. A balanced market is around 5-6 months of supply, therefore, we are still very much in a “Seller’s Market.”
- The Absorption Rate across all all price-points is well-below a balanced market. The rate of sales in the high end luxury market over $1.5M is 3.1 months supply, also quick-moving in today’s fast-moving real estate market.
- Properties across all price points are accepting offers and going into contract an average of 31 days from listing to acceptance. Single Family Residences are receiving acceptable offers 60% more quickly than December 2019
- The number of days from Listing to Contract varied greatly amongst all price ranges in December 2020. Homes priced from $1M to $1.5M appeared to be a particularly attractive market to buyers this month, only spending an average of 38 days on market before accepting an offer.
- The # of New Contracts month-over-month decreased just 8% from 431 to 397. However, the number of New Contracts posted in December 2020 was 14% greater than last year… encouraging news!
- The # of New Listings available during December 2020 declined 20% since November 2020. however, 13% more New Listings hit the market this December compared to December 2019.
- Over the last several months, the Reno-Sparks real estate market has realized an extremely high absorption rate, meaning the turnover of listings to sales is rapid. In addition, the supply of homes for sale has shrunk drastically. We only have about 2 weeks supply of inventory.
- During a season when we can typically see a dip in prices, the Median Sales Prices for single family residences has held steady at $450,000 for 2 months straight. New construction, condominiums, and condos/townhouses are not included in this statistic.
- The Average Sold Price per Square Foot is 16.5% higher than November 2019 at $260/sqft.
- Single-family residences continue to move very quickly at an average of 31 days from listing to contract over all price ranges, 60% faster than this same month last year.
- 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. In a market that demands a level head to navigate you through a successful purchase or sale, I’m your girl… so happy to help! Email direct firstname.lastname@example.org or reach me by cell at 775-233-0682.
Black Friday and Cyber Monday are behind us, yet finding the perfect holiday gifts for friends and family is certainly still top of mind for many right now. This year, there’s another type of buyer that’s very active this holiday season – the home buyer.
Each month, ShowingTime releases their Showing Index which tracks the average number of appointments received on active U.S. house listings. The most recent index notes:
“The Showing Index reported a 60.9 percent jump in nationwide showing traffic year over year in October, the sixth consecutive month to see an increase over last year.”
Here’s the breakdown of the latest activity by region of the country compared to this time last year:
- The Northeast increased by 65.5%
- The West increased by 64.7%
- The Midwest increased by 55.7%
- The South increased by 54.7%
Why is the traffic so active?
The health crisis definitely put home-buying plans on pause for many earlier this year. Buyers, however, are in the market and making moves well past the typical busy home-buying seasons of spring and summer.
One of the main reasons buyer traffic has continued to soar in the second half of 2020 is how dramatically mortgage rates have fallen. According to Freddie Mac, the average mortgage rate last December was 3.72%. Today, the rate is a full percentage point lower.
There are first-time, move-up, and move-down buyers actively looking for the home of their dreams this winter. If you’re thinking of selling your house in 2021, you don’t need to wait until the spring to do it. Your potential buyer is very likely searching for a home in your neighborhood right now.
This year will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.
1. The Economy Is Expected to Continue Improving
Tim Duy from the University of Oregon puts it this way:
“There is nothing fundamentally ‘broken’ in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter…Don’t let the near-term challenges distract from the economic stage being set for next four years.”
2. Interest Rates Are Projected to Stay Low
In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing in 2021.
3. Future Home Sales Are Forecasted to Grow
While the economy improves and interest rates remain low, homes are also expected to continue appreciating as more people buy in the coming year. Danielle Hale, Chief Economist at realtor.com, says:
“We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”
Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Let’s connect to take the first step toward your new home today.
If you’re one of the many homeowners thinking about taking your house off the market for the holidays, hang on. You definitely don’t want to miss the great selling opportunity you have right now. Here’s why this month is the optimal time to make sure your house is available for holiday buyers.
The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale has dropped to an astonishing all-time low. It now sits at a 2.5-month supply at the current sales pace.
Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market, in which there are enough homes available for active buyers (See graph below):
When the supply of houses for sale is as low as it is today, it’s much harder for buyers to find homes to purchase. This means competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.
As this happens, prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. So, if your neighbors decide to remove their listings this season, your house may quickly rise to the top of a holiday buyer’s wish list if you stay on the market.
Today, there are many buyers who are ready, willing, and able to purchase. Record-low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live and to take action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.
Home prices are appreciating in today’s sellers’ market. Making your home available over the next few weeks will give you the most exposure to buyers who will be actively competing against each other to purchase it.
** Data in this report reflect market activity from NOVEMBER 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.
- For the second straight month, the Median Sales Price for single-family, re-sale properties in Reno and Sparks, held steady at $455,000. This represents a 13.8% increase compared to the same time last year.
- The Average Sold Price per Square Foot has leaped 14.5% during November 2020 compared to November 2019, and has inched up 1.5% month-over-month. This average represents properties sold over ALL price ranges. For a breakdown of the Average Sold Price per Square Foot by Price Range, refer to the chart below.
- Homes that sold in November 2020 under $1M averaged around $245/square foot, while the upper price ranges cashed-in at $327/square foot for the 25 homes that sold in the $1M to $1.5 M range, and $492/square foot for the 13 homes that sold over $1.5M.
- The # of Units Sold dropped 12% month-over-month from 616 to 551. However, 21% more units sold in November 2020 compared to November 2019. The inventory that sold in November most likely went into contract sometime in October.
- Sales in the $300k to $500k price range accounted for 55% of the total market share for the second straight month.
- The extremely low Absorption Rate in Reno/Sparks holds steady at 0.7% Months Supply of Inventory. The Absorption Rate has declined a massive 73% year-over-year. 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, we are still very much in a “Seller’s Market.”
- The Absorption Rate across all all price-points is well-below a balanced market. The rate of sales in the high end luxury market over $1.5M is 3.5 months supply, also quick-moving in today’s hot real estate market.
- Properties across all price points are accepting offers and going into contract an average of 34 days from listing to acceptance. Single Family Residences are receiving acceptable offers 45% more quickly than this same time last year.
- In November 2020, the fastest moving properties, again, were those priced between $300k and $500K, spending an average of only 18.5 days on market.
- The # of New Contracts month-over-month dropped a whopping 29% from 612 New Contracts to 434. However, the number of new contracts posted in November 2020 was only 5.5% less than last year.
- As typically experienced each winter, we are beginning to see a drop in the # of New Contracts. See the chart above that indicates this cyclical trend. Also, please note that a premature drop was noted in April, likely due to the economic shut related to COVID-19. We saw a significant drop of 29% for New Contracts month-over-month, and 5.5% fewer New Contracts in November 2020 compared to November 2019.
- The # of New Listings to come to market during November 2020 declined 35% since October 2020. There were also 12.5% fewer New Listings this November compared to November 2019.
- While the number of New Listings and New Contracts has dropped since October which is typical for this time of year, the rate of sales continues to be on-par with the activity we have seen in 2020. Much to the surprise of many, the real estate market has fared extremely well during this crazy pandemic.
- As a result of low inventory and high buyer demand, prices have held steady with the median sales price remaining at $455,000 for a single-family residences. New construction, condominiums, and condos/townhouses are not included in this statistic.
- The Average Sold Price per Square Foot is 14.5% higher than November 2019.
- Single-family residences continue to move very quickly at an average of 34 days from listing to contract over all price ranges.
- 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 email@example.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.
What You’ll Need:
- 6 large russet potatoes
- 1 c. sour cream
- 1/4 lb. soft butter
- 1 tsp salt, or to taste
- 1 tsp pepper, or to taste
- 1 tsp sugar, or to taste
- 1 Tbsp dry dill
- 1 pkg. frozen, chopped spinach
- 4 green onions, chopped
What You’ll Do:
- Peel and cut the potatoes into 1 to 1.5 inch pieces, boil in salted water until soft, and drain.
- Combine sour cream, butter and all dry ingredients and add to potatoes with hand mixer or potato masher until light and fluffy.
- Add green onions and spinach to sour cream mixture.
- Fill in well-greased casserole dish and let sit to come to room temperature.
- Bake at 350º F for 30 minutes or until piping hot!
*Can be made ahead and refrigerated overnight or frozen. Remember to bring to room temperature before baking.