The pandemic has caused consumers to re-examine the components that make up the “perfect home.” Many families are no longer comfortable with the locations and layouts of their existing homes. The allure of city life (more congested) seems to be giving way to either suburban or rural life (less congested). The fascination with an open floor plan seems to be fading as people are finding a need for more privacy while working from home.
Recently, news.com released a report that revealed how buyers’ views of listings are leaning heavily to more suburban and rural properties. Here are the year-over-year percentage increases in views per property type:
- Urban – 7%
- Suburban – 13%
- Rural – 16%
In the report, Javier Vivas, Director of Economic Research for realtor.com, gives these numbers some context:
“This migration to the suburbs is not a new trend, but it has become more pronounced. After several months of shelter-in-place orders, the desire to have more space and the potential for more people to work remotely are likely two of the factors contributing to the popularity of the burbs.”
Realtor Magazine also just reported that the desire to move is strongest in our city markets:
“Nearly 30% of respondents living in a high-density urban area say that the pandemic is prompting them to want to move by the end of the year…This is more than double the rate of those living in rural parts of the country, where residents are much more likely to stay put rather than to relocate.”
New Construction Also Seeing a Surge in Views
Since the pandemic has altered how consumers think about floor plans, builders are anticipating how future homes will change. In a recent press release by Zillow, it was explained that:
- Builders believe as people spend more time at home during the pandemic, buyers are realizing which features of their homes are working and not working.
- Homebuilders predict open-concept floor plans will be a thing of the past, as people now value more walls, doors, and overall privacy.
- New construction, which offers the chance to personalize home features, saw its listing page views grow by 73% over last May.
The Virus is Even Impacting the Luxury Second-Home Market
“Stay at home orders and social distancing have put a new value on the extra space. We’re seeing this in the luxury market as well, which could mean there is renewed interest from high-end buyers to find a second-home that is within driving distance from their primary residence.
Much like the suburbs are gaining favor with home shoppers, second home markets are seeing increased interest from luxury buyers…Views of luxury properties accelerated 56% in The Hamptons, 28% in Palm Springs and 24% in Greenwich compared to January trends.”
It appears that a percentage of people are preparing to leave many American cities. Some of these moves will be permanent, while others will be temporary (such as a getaway to a second home). In either case, many consumers are on the move. Real estate professionals are ready and willing to help in any way they can.
The # of New Listings brought to market (116 listings) dropped again, with 18.3% fewer homes being listed the week ending May 30 compared to the week ending May 23. There were nearly 31.4% fewer homes listed this week than during the same week in 2019.
Summing It Up…
- Overall, the Sales Volume and # of New Listings on the market remains low, especially this time of year.
- With New Contracts on the rise over the last several weeks, we should start seeing a subsequent increase in number of Units Sold in the weeks to come as well.
- Sellers are receiving a high percentage of their list price and the Median Sales Price has ticked up to $420k again, likely due to the low-inventory market and steady buyer demand.
- Mortgage interest rates are still extremely low, and many Buyers are taking advantage. Email me today for a highly skilled and knowledgable lender recommendation.
- For more information about the ins and outs of buying &/or selling real estate in today’s market, please do not hesitate to call me at 775-233-0682 or email firstname.lastname@example.org.
All eyes are on the American economy. As it goes, so does the world economy. With states beginning to reopen, the question becomes: Which sectors of the economy will drive its recovery? There seems to be a growing consensus that the housing market is positioned to be that driving force, the tailwind that is necessary. Some may question that assertion as they look back on the last recession in 2008 when housing was the anchor to the economy – holding it back from sailing forward. But even then, the overall economy did not begin to recover until the real estate market started to regain its strength. This time, the housing market was in great shape when the virus hit. As Mark Fleming, Chief Economist of First American, recently explained:
“Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”
Fleming is not the only economist who believes this. Last week, Dr. Frank Nothaft, Chief Economist for CoreLogic, (@DrFrankNothaft) tweeted:
“For the first 6 decades after WWII, the housing sector led the rest of the economy out of each recession. Expect it to do so this time as well.”
And, Robert Dietz, Chief Economist for the National Association of Home Builders, in an economic update last week explained:
“As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt… Based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.”
Every time a home is sold it has a tremendous financial impact on local economies. As the real estate market continues its recovery, it will act as a strong tailwind to the overall national economy.
** Data in this report reflect market activity from April 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.
Here is the market overview:
And here is the breakdown for a couple of interesting statistics from April 2020:
- At $416,500, the April 2020 Median Sales Price for single-family re-sale properties in Reno-Sparks combined for the month was $416,500, a slight 0.4% increase from March 2020, and up 10.5% April last year.
- As seen in the chart above, the # of Closed Sales at dropped from 507 in March 2020 to 374 in April. This marks a 26% decline in closed sales month-over-month, and nearly 30% fewer closed sales compared to last year.
Months Supply of Inventory (MSI) in April 2020 jumped back up 31% compared to March, recording 2.2 months supply. This measure of inventory is also about 6% higher than in April 2019. MSI accounts for the time it would take to “sell out” of the Reno-Sparks inventory at the current rate of sale. A balanced market is around 5-6 months of supply. Therefore, this the low 2.2 months supply, we are still very much considered to be in a Seller’s Market.
The average # of Days from Listing to Contract in April 2020 was 39 days. This is still quite a short period of time when looking back over the last few years. The # of Days to Contract is about 7% lower than April 2019. These averages account for all price ranges.
With Seller’s receiving an average of 98.9% of asking in April 2020, we have continued to see no significant change for this statistic overall.
One may wonder if coronavirus is having an effect on the percentage of distressed sales in Reno-Sparks. At this time, the answer appears to be “no.” In April 2020, Distressed Sales (short-sales and foreclosures) are nearly 50% lower than the same time last year.
Here is what is happening now… The Week Ending May 9, 2020:
After 4 straight weeks of an increase in New Contracts, the week ending May 9 saw a relative leveling out of New Contracts, with just a slight 2.2% decrease from the previous week. Overall, the number of new Contracts for this week last year is down about 10%.
# of New Listings to hit the market the week ending May 9 increased 25% compared to the previous week. The Reno-Sparks real estate market saw nearly 42% fewer new listings than the week ending May 11, 2019.
- Real Estate in Nevada continues to be an “essential service.” Governor Sisolak’s mandate to eliminate in-person open houses for all properties, and in-person showings of tenant/renter-occupied properties has been extended to May 30, 2020. All owner-occupied and vacant properties may still be shown to prospective buyers with practice of social distancing, use of personal protective equipment and frequent 20-second hand-washing &/or hand-sanitizing.
- Starting May 4, California Bay Area agents were allowed to show occupied properties and to stage vacant properties once again. The allowance for such activities could potentially mean an increase of activity in Nevada, a place where many Californias are expected to call their “new home.”
- Lending qualification parameters have tightened, but the Mortgage Interest Rates are staying low! For a super reputable, local lender recommendation, contact me. I will be happy to connect you with the best!
- Looking more closely at the last full week of activity (ending May 9) the # of New Contracts has leveled week-over-week, and the # of New Listings rose slightly.
- While the sales volume took a hit in April, the Median Sales Price has held steady, largely due to buyer-demand keeping pace fairly stable rate of sale and continued low inventory.
- Nationally acclaimed economist and author of the Blog “ECON 70” Elliot Eisenberg, PhD checked in again with the Reno-Sparks Association of Realtors. This month, Elliot stands by last month’s assertion that the current recession is very different from previous recessions, and that it will be deep but relatively short. Click HERE to watch the April 2020 “Monthly Economic Minute.”