THE WEEKEND WARRIOR
The Weekend Warrior is your guide for the best events happening around the Reno/Sparks/Lake Tahoe region brought to you by Intero Real Estate Services Reno! Our hugely popular Artown during the month of July is keeping us entertained, both virtually and in-person. Check out the happenings this weekend!
ALL OF JULY
ONLINE AND VARIOUS LOCATIONS AROUND NORTHERN NEVADA
THURSDAY, JULY 9 (5-9 pm)
BUENOS GRILL (3892 Mayberry Dr. Ste. A, Reno)
FRIDAY, JULY 10 (9-11 pm)
WEST WIND EL RANCHO DRIVE-IN, SPARKS, NV
THURS, JULY 9 / FRIDAY, JULY 10 / SATURDAY, JULY 11 ( 8 am)
LIMITED TIME ACCESS
SATURDAY, JULY 10 (11 am-1 pm)
CRISSIE CAUGHLIN PARK (3415 Idlewild Dr, Reno)
THURS, JULY 9 (6 pm) SAT, JULY 11 (9 am) & SUN, JULY 12 (2 pm)
Artown 2020 invites you to explore Reno’s history one neighborhood at a time. Here is the lineup of tours happening virtually this weekend and beyond:Thursday, July 9 (6 pm): CULTURAL CROSSROADS WEST. Chinese herbal shops, Judaism’s early days and a rich African-American heritage come alive in this presentation. Includes a visit inside the Lear Theater and the historic Bethel AME Church.Saturday, July 10 (9 am): BRICKS & STONES. Get to know the Humboldt and Lander Streets Neighborhood. Discover the architectural treasures of this area… a mix of bungalows, period revivals and cottage styles.Tuesday, July 14 (6 pm): MANSIONS ON THE BLUFF / COURT STREET. Learn the story of Reno’s most treasured historic neighborhood. Many of early Reno’s prominent families built generous homes on this once treeless bluff overlooking the Truckee River with panoramic views of Peavine Mountain and the Sierra. Imagine the beauty and charm of this coveted neighborhood, largely developed by U.S. Senator Francis Newlands.
Wednesday, July 15 (6 pm): LITERARY RENO. Reno continues to be a mythical magnet for ‘outsider’ writers and characters. The misfits, outcasts and seekers. Let your imagination roam as you travel downtown streets encountered by traditional writers like Will James, Robert Laxalt and Joanne de Longchamps, then learn the haunts of contemporary writers such as Bernie Schopen, Willy Vlautin and Susan Palwick.
TAHOE RIM TRAIL
SATURDAY, JULY 11 / SUNDAY, JULY 12 / TUESDAY, JULY 14 (6 pm)
WILD RIVER GRILLE (17 S. Virginia St)
Summer evenings in Northern Nevada are my absolute favorite. And Wild River Grille, located steps from the Truckee River, is the perfect place to soak up the warm air, enjoy a beautiful dinner and listen to the evening’s local musical performances at the Summer Dinner Concert Series. Here is the lineup of artists sharing their talents this weekend:Saturday, July 11 (6-9 pm): Tany Jane. A local acoustic duo who that nails popular covers and originals. Visit YouTube.com for a great sample of their vibe (skip to 2:11).Sunday, July 12 (6-9 pm): Colin Ross. Talented pianist, guitarist, singer/songwriter brings a soulful, throw-back feeling to his performances. Visit Facebook.com for one of his quarantine concerts.Tuesday, July 14 (6-9 pm): Eric Andersen. “Piano-Rocker” Eric Andersen fills the patio with his “fresh approach to pop music.” Catch a sample of his music as he performs with The Novelists at YouTube.com.
SATURDAY, JULY 11 (9 am-1 pm)
WILBUR D. MAY ARBORETUM at RANCHO SAN RAFAEL PARK
EVERY WEDNESDAY (Begins at 5 pm)
McKINLEY PARK (925 Riverside Dr, Reno)
The Bureau of Labor Statistics (BLS) released their latest Employment Situation Summary last Thursday, and it again beat analysts’ expectations in a big way. The consensus was for 3,074,000 jobs to be added in June. The report revealed that 4,800,000 jobs were added. The unemployment rate fell to 11.1% from 13.3% last month. Again, excellent news as the unemployment rate fell for the second consecutive month. However, there’s still a long way to go before the economy fully recovers as 17.8 million Americans remain unemployed.
Here are two interesting insights on the report:
What about a supposed misclassification?
The BLS addressed this at length in a blog post last week, and concluded by saying:
“Regardless of the assumptions we might make about misclassification, the trend in the unemployment rate over the period in question is the same; the rate increased in March & April and eased in May.”
They specifically noted the issue in the latest report by explaining that if they adjusted the rate for the potential miscalculation, it would increase from 11.1% to 12.1% (which is lower than the adjusted rate of 16.4% last month). They went on to say:
“However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.”
Does the shutdown of parts of the economy skew the unemployment numbers?
Because the uniqueness of 2020 impacts the employment situation in so many ways, each jobs report is now examined with a microscope to make sure the headlines generated by the report accurately convey what’s happening in the job market.
One such analysis is done by Jed Kolko, Chief Economist at Indeed. He believes the extraordinary number of people in the “temporary” unemployed category confuses the broader issue of how many people have permanently lost their job. He adjusts for this when calculating his “core unemployment rate” (which subtracts temporary layoffs and adds unemployed who didn’t search for a job recently).
The bad news is that his analysis reveals that the number of permanently unemployed is still rising (from 4.6% in April to 5.9% last month). The good news, however, is when you use his methodology to look back at the Great Recession, today’s “core unemployment rate” is significantly lower (5.9% versus 10.5% in April 2010).
Last week’s jobs report was much better than most expected. However, we should remain cautious in our optimism. As the Wall Street Journal explained in their analysis of the jobs report:
“U.S. job growth surged last month, underscoring the economy’s capacity for a quick rebound if businesses continue to reopen and consumers regain confidence. A recent coronavirus spike, however, could undermine trends captured in the latest jobs report.”
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.
Pending Home Sales increased by 44.3% in May, registering the highest month-over-month gain in the index since the National Association of Realtors (NAR) started tracking this metric in January 2001. So, what exactly are pending home sales, and why is this rebound so important?
According to NAR, the Pending Home Sales Index (PHS) is:
“A leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.”
In real estate, pending home sales is a key indicator in determining the strength of the housing market. As mentioned before, it measures how many existing homes went into contract in a specific month. When a buyer goes through the steps to purchase a home, the final one is the closing. On average, that happens about two months after the contract is signed, depending on how fast or slow the process takes in each state.
Why is this rebound important?
With the COVID-19 pandemic and a shutdown of the economy, we saw a steep two-month decline in the number of houses that went into contract. In May, however, that number increased dramatically (See graph here):
This jump means buyers are back in the market and purchasing homes right now. Lawrence Yun, Chief Economist at NAR mentioned:
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
But in order to continue with this trend, we need more houses for sale on the market. Yun continues to say:
“More listings are continuously appearing as the economy reopens, helping with inventory choices…Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
As we move through the year, we’ll see an increase in the number of houses being built. This will help combat a small portion of the inventory deficit. The lack of overall inventory, however, is still a challenge, and it is creating an opportunity for homeowners who are ready to sell. As the graph below shows, during the last 12 months, the supply of homes for sale has been decreasing year-over-year and is not keeping up with the demand from homebuyers.
If you decided not to sell this spring due to the health crisis, maybe it’s time to jump back into the market while buyers are actively looking for homes. Let’s connect today to determine your best move forward.
** Data in this report reflect market activity from MAY 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 are a more detailed look at the stats for May 2020 compared to the previous month and year:
- In May 2020, the Median Sales Price for single-family re-sale properties in Reno-Sparks combined was $399,900, a 3.6% decrease from April 2020, and a 2.5% increase from May 2019. As seen in the graph above, the median sales price has hugged the $400k price point over the last year and appears to be steady at this time.
- # of Units Sold inched up 387 to 396 from April to May 2020. The sales volume is down 42% compared to the same month last year. This volume is representative of properties that likely went under contract for sale in April and were in escrow for about 30 days.
Months Supply of Inventory (MSI) decreased 11.8% month over month from 2.4 to 2.1 months supply. This measure of inventory is also about 5% higher than last year. MSI accounts for the time it would take to “sell out” of the Reno-Sparks inventory at the current rate of sale if no new listings came to market. A balanced market is around 5-6 months of supply. Therefore, with a low 2.1 months supply, we are still very much considered to be in a “Seller’s Market.”
The Average # of Days from Listing to Contract in May 2020 was 39 days. Single family residences are taking 20% longer to sell this year than in May 2019, and only 1.6% longer than the previous month. These averages account for all price ranges.
As seen in the graph above, homes that sold in the $200k to $700k range during May 2020 received acceptable offers significantly more quickly than the rest of the market. The $1M to $1.5M range went into contract fairly quickly (66 days) compared to the $750k to $1M range and the $1.5M+ range (108 days).
With Seller’s receiving an average of 99% of asking in May 2020, we continued to see no significant change for this statistic overall. Please note that price reductions may have occurred prior to receiving 99% of asking.
Is the economic impact of COVID-19 pandemic causing foreclosures and short sales in Reno-Sparks at this time? So far, homeowners appear to be hanging in through the highest unemployment rate most of us have ever seen. The percentage of distressed sales on the market did increase 7% month over month, but is still down 30% from May 2019. Only 1.7% of homes listed on multiple listing service were considered “distressed,” meaning a bank-owned/foreclosure or short sale.
The last several weeks of real estate activity have brought a significant increase in the # of New Contracts. Month over month, we saw a 635 New Contracts for sale, a 63.7% leap from April 2020 and a 3.9% increase from last year.
# of New Listings to hit the market the week ending in May 2020 increased slightly by 3.8% compared to April 2020. Our # of New Listings are still down nearly 40% from the same period of time last year.
- Inventory is still low, but what IS on the market is moving, as indicated by the significant increase in New Contracts, which should lead to an increase in sales volume in the coming months.
- The Median Sales Price at $399,900 appears to be fairly steady at this time. Over the last year, the $400k Median has been a benchmark the market has hovered around during the last 13 months.
- The consensus among many real estate professionals is that “summer is the new spring.” The typical influx of activity that happens in March, April and May is beginning happening now. My colleagues and I have been extremely active over the last couple of months.
- With low inventory, however, we’ll need to see if buyer demand for fewer homes listed will continue, and ultimately put more upward pressure on prices again. Will the Median Sales Price start moving up again in the near future? We shall see…
- Buyer activity in Reno-Sparks comes largely from out-of-state, particularly California. While many of our relocation clients are looking to escape the crowds, traffic and high taxes of California during COVID-19 uncertainty, they are finding more reasons now than ever to make that move. We call them “California Refugees,” and we are here to help. Email me at firstname.lastname@example.org to learn more about the many benefits of moving to Reno-Sparks.
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 email@example.com.
There are numerous reasons why owning a home is beneficial. We’ve quickly summed up the Top 8 Reasons to Own Your Home and here they are…
- Privacy. Creating space that is solely your own means no landlord visits. It’s not your landlord’s house… It’s yours, so nobody should be stopping by to “check in on things.”
- Accomplishment. Buying your own home is a reflection of your efforts and successes. Give yourself a pat on the back and be proud of what you acquire.
- Family. Purchasing and living in a home that is dedicated to your family brings them together and is your special place to make lasting memories.
- Community. Owning your home ties to you the community and neighborhood, giving you a sense of belonging (if you so desire).
- Comfort. Having a place to call your own allows you to surround yourself with enhanced experiences… Construct a home gym, design a hobby room, create a killer home office and enjoy!
- Stability. Investing in and controlling your future direction and security could prove to be beneficial in the long-run.
- Personal Expression. Painting rooms your favorite colors and hanging art are just a couple benefits to putting your own style into your abode.
- Financial Investment. Investing in the real estate puts you in a position to grow your assets and wealth.
- June is National Homeownership Month, and it’s a great time to consider the benefits of owning your own home.
- If you’re in a position to buy, homeownership might help you find the stability, community, and comfort you’ve been searching for this year.
- Let’s connect today to determine if homeownership is the right next step for you and your family.
The # of New Listings brought to market dipped slightly, with 6.6% fewer homes being listed the week ending May 23 compared to the week ending May 16. There were nearly 45% fewer homes listed this week than during the same week in 2019.
Summing It Up…
- Buyer demand continues to keep pace with the level of active inventory, resulting in continued steadying of the Median Sales Price that has hovered around the $400k mark for months.
- Sales Volume, Active Inventory and # of New Listings are still down significantly from the same week last year. However, with Buyers staying on track with purchases, our activity appears stable.
- Mortgage applications rose for the 6th straight week, as they were fueled by historically low mortgage rates and pent-up demand. The Mortgage Bankers Association reports that mortgage applications are up 9% year over year. Refinancing applications have doubled since the same week last year as well. If you are in need of a qualified loan officer, contact me now and I will refer you to the best in our industry.
- 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.
There are many benefits to working with a real estate professional when selling your house. During challenging times like the one we face today, it becomes even more important to have an expert help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale By Owner or FSBO, please consider the following:
1. Your Safety Is a Priority
During this pandemic, your family’s safety comes first. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings, but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, agents are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.
2. A Powerful Online Strategy Is a Must to Attract a Buyer
Recent studies have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumped to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?
3. There Are Too Many Negotiations
Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:
- The buyer, who wants the best deal possible
- The buyer’s agent, who solely represents the best interest of the buyer
- The inspection companies, which work for the buyer and will almost always find challenges with the house
- The appraiser, if there is a question of value
As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.
4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage
Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress that’s being made toward a purchaser’s mortgage commitment. Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was there yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.
5. FSBOing Has Become More Difficult from a Legal Standpoint
The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
6. You Net More Money When Using an Agent
Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission. A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
The more buyers that view a home, the greater the chance a bidding war will take place.
Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.
With stay-at-home orders starting to gradually lift throughout parts of the country, data indicates homebuyers are jumping back into the market. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the “busy spring real estate season” is shifting into the “summer real estate season.” In 2020, summer is the new spring for real estate.
Joel Kan, Economist at The Mortgage Bankers Association (MBA) notes:
“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks…Government purchase applications, which include FHA, VA, and USDA loans, are now 5 percent higher than a year ago, which is an encouraging turnaround after the weakness seen over the past two months.”
Additionally, according to Google Trends, which scores search terms online, searches for real estate increased from 68 points the week of March 15th to 92 points last week. As we can see, more potential homebuyers are looking for homes virtually.
What’s the Opportunity for Buyers?
Another reason buyers are coming back to the market, even with forced unemployment and stay-at-home orders, is historically low mortgage rates. Sam Khater, Chief Economist at Freddie Mac indicates:
“For the fourth consecutive week, the 30-year fixed-rate mortgage has been below 3.30%, giving potential buyers a good reason to continue shopping even amid the pandemic… As states reopen, we’re seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.”
With mortgage rates at such low levels and states gradually beginning to reopen, there’s more incentive than ever to buy a home this summer.
What’s the Opportunity for Sellers?
Finding a home to buy, however, is still a challenge, as this spring sellers removed many listings from the market. Though more people are now listing their homes for sale this month as compared to last month, current inventory is still well below last year’s level.
According to last week’s Weekly Economic and Housing Market Update from Realtor.com:
“Weekly Housing Inventory showed continued tightening. New Listings declined 28% compared with a year ago, as sellers grappled with uncertainty and hesitated bringing homes to market. Total Listings dropped 20% YoY, a faster rate than in prior weeks, leaving very few homes available for sale. As Time on Market was 15 days slower YoY, asking prices moved up 1.5% YoY.”
If you’re thinking of selling your house this summer, now may be your best opportunity. With so few homes on the market for buyers to purchase, this season may be the time for your house enjoy limited competing properties. Buyers are looking, and your house may be at the top of that short list. Your trusted real estate professionals can help you list safely and effectively, keeping your family’s needs top of mind.
If you’re thinking of selling, many buyers may be eager to find a home just like yours. Let’s connect today to make sure you can get your house in on the action this summer.