April 2020 Market Report

** Data in this report reflect market activity from March 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:

MEDIAN SALES PRICE

At $415,000, the March 2020 Median Sales Price for single-family re-sale properties in Reno-Sparks combined is recorded as 12.5% higher than March of last year, and up 6% from February 2020.

# OF UNITS SOLD

As seen in the chart above, the # of Closed Sales at 502 increased from February approximately 10% and increased 9.6% from March 2019.

MONTHS SUPPLY OF INVENTORY

Months Supply of Inventory (MSI) in March 2020 was substantially lower than March of 2019, a drop of 31.1%. 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. March 2020 posted MSI of 1.5 months, suggesting we are still in a Seller’s Market.

# OF NEW CONTRACTS

The number of listed homes that have gone int0 contract (accepted offer) has decreased about 7% since February 2020. This statistic is also down 13% from the same time last year, and is likely due to the shutdown of many of our industries in the US due to COVID-19. Spring is typically the beginning of the “selling season” with new contracts increasing into June-July each year.

#OF NEW LISTINGS

The biggest surprise… # of New Listings actually rose 19.4% from February to March 2020. There was no significant change in the # of New Listings compared to March 2019, indicating that in March, Sellers were still needing to list in order to sell, even during the pandemic.

WHAT’S HAPPENING NOW??

CLOSED SALES THE WEEK ENDING APRIL 11, 2020

Let’s take a closer look at what is happening more recently … As a result of the drop in new contracts about 1 month ago, and some cancelled escrows (likely many due to Coronavirus), the # of Closed Sales the week ending April 11 took a nose-dive 50% since the week ending March 28. Only 66 single family residences in the Greater Reno-Sparks region closed escrow the week ending April 11.

NEW CONTRACTS THE WEEK ENDING APRIL 11, 2020

Though sales volume overall was down the week ending April 11, 88 single-family homes went into contract, an increase of 6% from the previous week.

NEW LISTINGS THE WEEK ENDING APRIL 11, 2020

The # of New Listings has been bouncing around the last several weeks. From the week ending April 4 to the week ending April 11, volume of New Listings has dropped roughly 21%.

SUMMARY:

Real Estate in Nevada is an “essential business.” Though Governor Sisolak has mandated that open houses and showings of tenant/renter-occupied properties cease, owner-occupied and vacant properties may still be shown to prospective buyers. Social distancing, along with use of face masks/coverings, hand sanitizing wipes, gloves, 20-second hand-washing and removal of shoes/use of painter booties are being exercised by Realtors and their clients.
Santa Clara County, and other Bay Area counties have imposed additional tighter restrictions such as no showings of ANY occupied properties. This is significantly impacting the real estate market in these areas, resulting in a drop in home sales volume there. Many prospective CA sellers are Nevada’s buyers. We look forward to when CA government lightens the restrictions on the real estate industry, allowing more completion of transactions that then flow into Nevada as purchases.
Though Mortgage Interest Rates are the lowest they have been in the last year, mortgage lenders have tightened their qualification parameters. New purchase and refinance conditions have changed through the course of the pandemic due to economic and employment issues, and jumbo loans (those valued above the conforming loan limit of $510,400.) have been pulled back. Learn more at CNBC.com.
A decline in the # of New Contracts in March is an indicator of decrease sales volume in the next couple of months. As the number of new coronavirus infections decreases, the economy and employment recover, and we return to more “normal” activity, many economists predict that the housing market will make a quick recovery and housing prices may not be affected.
CLICK HERE to hear nationally acclaimed economist and author of the Blog “ECON 70” Elliot Eisenberg, PhD. Elliot shares his thoughts about the current recession, the recovery of the economy and what should happen in real estate.