November 2019 Market Report

 

** Data in this report reflect market activity from October 2019 compared to September 2019 and October 2019 compared to October 2018.  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 and new construction.

  • October 2019 Median Sales Price for single-family re-sale properties in Reno-Sparks (excluding condominiums/townhouses) rose slightly by 1.3% from September 2019 to October 2019 ($395,000 to $399,995).  The Median Sales Price is up about 4% from this same time last year.

  • # of Units Sold single-family residences dipped from 573 to 546 (-4.7%) from September to October 2019.  However, unit sales were up about 16.7% from the same time last year.

  • Average # Days to Contract has risen sharply, both from September to October 2019 and from the same time last year.

  • The market saw a minor decrease in the Average Sold $/Sqft, dropping just 1.5% from September to October 2019, and a mini increase of 1.2% from October of last year.

CONCLUSIONS:

  • The above statistics are extremely consistent with typical market trends this time of year.
  • Though the unit sales are down from the previous month, they were significantly more sold this year compared to last year.
  • Average $/square foot sold is holding fairly steady at $223/sqft.
  • Data for inventory and property status is missing from RSAR reports this month and will be updated when available.
  • Each neighborhood/area in Northern Nevada Regional MLS has its own micro-market.  For specific information about YOUR neighborhood, contact me at 775.233.0682 or email me at     dhallerbach@intero.com.
Posted on November 14, 2019 at 4:11 am
Denise Hallerbach | Category: Reno-Sparks Market Report | Tagged , , ,

3 Reasons This is NOT the 2008 Real Estate Market

No one knows for sure when the next recession will occur. What is known, however, is that the “talked about” upcoming economic slowdown will not be caused by a housing market crash, as was the case in 2008. There are those who disagree and are comparing today’s real estate market to the market in 2005-2006, which preceded the crash. In many ways, however, the market is very different now. Here are three suppositions promoted by some, and why they don’t hold up.

SUPPOSITION #1 : A critical warning sign last time was the surging gap between the growth in home prices and household income. Today, home values have also outpaced wage gains. As in 2006, a lack of affordability will kill the market.

COUNTERPOINT #1:  The “gap” between wages and home price growth has existed since 2012. If that is a sign of a recession, why didn’t we have one sometime in the last seven years? Also, a buyer’s purchasing power is MUCH GREATER today than it was thirteen years ago. The equation to determine affordability has three elements:  home prices, wages, AND MORTGAGE INTEREST RATES. Today, the mortgage rate is about 3.5% versus 6.41% in 2006.

SUPPOSITION #2:  In 2018, as in 2005, housing-price growth began slowing, with significant price drops occurring in some major markets. Look at Manhattan where home prices are in a “near free-fall.”

COUNTERPOINT #2:  The only major market showing true depreciation is Seattle, and it looks like home values in that city are about to reverse and start appreciating again. CoreLogic is projecting home price appreciation to reaccelerate across the country over the next twelve months.

Regarding Manhattan, home prices are dropping because the city’s new “mansion tax” is sapping demand. Additionally, the new federal tax code that went into effect last year continues to impact the market, capping deductions for state and local taxes, known as SALT, at $10,000. That had the effect of making it more expensive to own homes in states like New York.

SUPPOSITION #3:  Prices will crash because that is what happened during the last recession.

COUNTERPOINT #3:  It is true that home values sank by almost 20% during the 2008 recession. However, it is also true that in the 4 previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6%.

Price is determined by supply and demand. In 2008, there was an overabundance of housing inventory (a 9-month supply). Today, the national housing inventory is less than half of that (a 4-month supply).

THE BOTTOM LINE:  We need to realize that today’s real estate market is nothing like the 2008 market. Therefore, when a recession does eventually occur, it will very likely NOT resemble the last one.

Posted on October 23, 2019 at 5:58 am
Denise Hallerbach | Category: Real Estate News | Tagged , , ,

September 2019 Market Report

** Data in this report reflect market activity from August 2019 compared to July 2019 and August 2019 compared to August 2018.  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 and new construction.

HIGHLIGHTS:

  • August 2019 Median Sales Price for single-family re-sale properties in Reno-Sparks (excluding condominiums/townhouses) dipped slightly by 1.5% from July 2019 to August 2019 ($405,000 to $399,000).  The Median Sales Price is up 7.6% from this same time last year.
  • # of Units Sold at 601 single-family homes held fairly steady from July to August 2019.  Unit sales are up about 5.1% from the same time last year.
  • # Days to Contract continues to increase and are up significantly from the same time last year. It is now taking an average of 34% more days to receive an accepted offer on a single family home.
  • The New Listings count was down about 4% from July 2019 and 10% higher than the same time last year.
  • Months Supply of Inventory (MSI) for August 2019 was 2.3.  “Months Supply of Inventory” is defined as the time it would take for the current inventory to be completely sold out if sales remained at their current rate.  But do remember that this inventory supply does not factor in NEW home construction that is offered throughout the region.  A “balanced inventory market” is about 6 MSI.

CONCLUSIONS:

  • How do we account for the 7.6% increase in the Reno-Sparks median sales price from the same time last year?  Check out the distribution of unit sales by price point in the graphs below.  It appears as though a slight increase in sales at the $400k-$500k price range may be the reason.

  • Sales activity continued to slow at the end of summer.  This is a typical seasonal trend, as illustrated in the graph below.  However, we experienced a 5-year low of only 353 single family homes sold in January of this year.  The number of units sold in a month peaked at 851 in June of 2017.

  • Sellers are advised to be patient.  It’s taking a bit longer to get a buyer into contract than in the spring and early summer.  However, as seen in the graph below, this is also a typical seasonal trend as well.  Competitive pricing and home preparation and maintenance are the key to selling your home most quickly.

  • Policy changes should help with the condominium market.  Last month, the National Association of Realtors announce that the Department of Housing and Urban Development is implementing changes in policy and regulations October 15, 2019 that will likely help boost condominium sales.  Currently, only 6.5% of the condo projects in the U.S. are eligible for the FHA mortgage insurance program. But the coming new policies should result in more condos available for purchase with FHA financing and have a positive impact on buying opportunities for many first-time home buyers.   For more information on the topic, click HERE for the September 2019 RSAR “To The Point” video.
  • If you need an experienced real estate professional to assist with purchasing a home or preparing, staging and marketing your home to sell, please don’t hesitate to contact me directly at dhallerbach@intero.com or 775-233-0682.  
Posted on September 18, 2019 at 8:40 pm
Denise Hallerbach | Category: Reno-Sparks Market Report | Tagged , , ,

August 2019 Market Report

** Data in this report reflect market activity from July 2019 compared to June 2019 and July 2019 compared to July 2018.  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 and new construction.

HIGHLIGHTS:

  • July 2019 Median Sales Price for single-family re-sale properties in Reno-Sparks (excluding condominiums/townhouses) increased 1.3% from June 2019 to July 2019 ($400,000 to $405,000).  The Median Sales Price jumped 5.2% from this same time last year.
  • # of Units Sold in July 2019 increased 4.2% from the previous month to 746 units.  Unit sales are also up about 4% from the same time last year.
  • # Days to Contract continues to increase and are up significantly from the same time last year. It is now taking an average of 30% more days to receive an accepted offer on a single family home.
  • # New Listings is down 5% from June 2019 and up just 3.6% since last year.
  • Months Supply of Inventory (MSI) has increased about 6% since June 2019, and increased 10.4% since the same time last year.  This is still considered to be a “Seller’s Market.”  “Months Supply of Inventory” is defined as the time it would take for the current inventory to be completely sold out if sales remained at their current rate.  A “balanced inventory market” is about 6 MSI.

CONCLUSIONS:

  • Curious about the median sales price in Reno, apart from Sparks?  Though the median in Reno dipped 2.5% from May to June this year, it rallied 2% from June to July.  Sparks also experienced and increase of 1.6% in the median sales price in the last month.  In general, the median is up in BOTH cities 4.5-5% year-over-year.

  

  • We are seeing a slow down in activity here at the end of summer.  This is a typical seasonal phenomenon.  With buyers and potential sellers wrapping up their travels and getting their children back in school, this may account for the increase in number of “days to contract” at this time.
  • Ever wonder how buyers are making their purchases in Northern Nevada these days?  We took a look at sales by price range over the last 3 months.  Below is the breakdown of financing vs. cash purchases. Pretty interesting…

        

        

     

  • Mortgage interest rates continue to stay low.  Borrowers with good credit are seeing rates sub-4%.  Visit MortgageNewsDaily.com for today’s prevailing rates.  Though remember, that a borrower’s actual interest rate is directly related to his/her financial and credit standings, and can vary by loan program.  Need a lender?   Contact me today for an awesome local referral!
  • If you need an experienced real estate professional to assist with preparing, staging and marketing your home to sell, please don’t hesitate to contact me directly at dhallerbach@intero.com or 775-233-0682.
Posted on August 14, 2019 at 3:09 pm
Denise Hallerbach | Category: Reno-Sparks Market Report | Tagged , , ,

March 2019 Market Report

** Data in this report reflect market activity from Feb 2019 compared to Jan 2019 and Feb 2019 compared to Feb 2018.  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 and new construction.

HIGHLIGHTS:

  • February 2019 Median Sales Price for single-family re-sale properties (excluding condominiums/townhouses) is up 2.8% from compared to January 2019.  The Median Sales Price appear stable from the same time last year.
  • Unit Sales in February 2019 were significantly lower than the same month last year.  The number of single family homes sold at 344 homes dropped 22.5 % compared to February 2018.
  • # of Days to Contract in Feb 2019 has dropped about 7% from the previous month, so homes are going under contract to sell more quickly than we’ve been experiencing lately.  However, it is taking nearly twice as long as it did in Feb 2018, on the average.
  • Active Inventory has improved since Feb 2018, increasing 35.5% to 932 active listings in Feb 2019.  However, even though Months Supply of Inventory has increased 75% from last year to 2.7 MSI this year, we are still technically in a Seller’s Market.  “Months Supply of Inventory” is defined as the time it would take for the current inventory to be completely sold out if sales remained at their current state.  A “balanced inventory market” is about 6 MSI.
  • # of New Listings from last year to this year are down 27%, and down 8.7% from the previous month.

CONCLUSIONS:

  • Longer days to contract… why?  Have you been outside lately?  This has been one of the most consistently wet and snowy winters in recent history.  Weather has slow or eliminated travel for buyers, many of whom are traveling from California.
  • Increase in median sales price… why?  We are personally starting to see that when houses are priced close to market value, multiple offers are happening again.  This may have played a role in the medial sales price increasing from Jan to Feb 2019.
  • Drop in unit sales from last year to this year… why?  Perhaps weather played a part in this as well.
  • Mortgage interest rates have recovered since being raised 4 times last year. They are back down to a 12 month low.  This should help with affordability to a degree.
  • Consumer confidence is up, despite domestic and global political distractions.  Buyers appear to be getting off the fence and moving toward real estate investment in Northern Nevada.
  • What else is affecting the resale market?  Reno-Sparks Association of Realtors does not currently include new construction in the market statistics (having pulled data from Northern Nevada Regional MLS).  Currently, there are several large scale developments in the Great Reno-Sparks Region.  Our theory is that these projects absorbing many of the buyers who are purchasing in Reno-Sparks who would have otherwise purchase an existing home.  The new construction activity could very likely be playing a part in the decline of the rate and volume of sales of re-sale properties in our region.
  • All this being said…  A slowing of the real estate market during the last year may very well me a blessing, as affordability for the future of Reno-Sparks is a concern.
  • For market stats in your specific neighborhood, contact me now!
Posted on March 14, 2019 at 6:40 am
Denise Hallerbach | Category: Reno-Sparks Market Report | Tagged , , , ,