Reno-Sparks Market Report September 11, 2022

September 2022 Market Report

** Data in this the September 2022 Market Report reflect market activity from AUGUST 2022 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.

  • The Median Sales Price (MSP) in Reno-Sparks dropped slightly for the third consecutive month, down 1.5% from $574,510 to $565,686. However, the MSP is still 6.7% higher than in August 2021.

  • While the Median Sales Price (MSP) in Reno ticked up 0.7% month-over-month, the MSP in Sparks fell 4.1% to $524,901 compared to last month.  The MSI is still 8.4% and 5.6% higher respectively compared to August last year.

  • Closed Sales inched up about 2% compared to July 2022 and are down 22.2% compared to August last year. 

  • Median Sold Price per Square Foot was $311/SF, down 2.8% compared to July 2022 and up 3.3% compared to last year.

  •  The Months Supply of Inventory is the number of months it would take to sell through the available inventory at the current rate of sales.  Though the Months Supply of Inventory (MSI) shifted from 0.8 MSI to 3.2 MSI over the last several months, August’s MSI was nearly 10% lower that July’s MSI.  During August of 2021, the MSI was 0.8 MSI representing a market that was a 180% higher rate of sales compared to August 2022.  Bear in mind, that a true “balanced market” is approximately 5-7 months supply, so though the market has shifted toward a “Seller’s Market,” we are still not at a fully balanced market.

  • As observed in the chart above, the faster pace of the $200k to $999k price ranges explains how the Months Supply of Inventory has hovered at about 3 MSI despite thte MSI in the Luxury Market leaping to over 10 MSI.

  • Median Days to Contract has increased from 25 to 32, a 28% increase month-over-month, and a whopping 433.3% increase year-over-year. However… let’s take a look over the last several years… The median Days to Contract is still WELL below the peaks of 2013, 2016, 2018, & 2019.

  • The Luxury Market showed properties taking about 62 days from listing to receiving an acceptable offer.  This is approximately double the Median of all price points and likely the reason that we saw a 28% increase month-over-month and a 433.3% increase in Days to Contract year-over-year.

  • New Pending Sales increased 29.2% from July to August 2022.  There are 13% fewer New Pending Sales compared to last year.

  • 15.8% fewer New Listings hit the market in August 2022 compared to July 2022.  We saw a 20.2% decline in New Listings compared to last year as well.

OTHER INTERESTING STATS TO KEEP AN EYE ON:

  • Keeping an eye on the distressed sale market, at this point, we are still NOT seeing that recent market activity is causing more properties to be sold as foreclosures.  Short-sales are few and far between due to the great amount of equity many home owners currently have in their properties.

  • The % of Cash Purchases has increased 3.6% month-over-month for all single family sales in Reno-Sparks and are 2.5% higher than last year. 26.1% of all sales in August 2022 were cash.

  • August 2022 saw 32.3% more Withdrawn and Expired Listings compared to the previous month, and a staggering 203.4% more compared to August last year. This is an indication that many Sellers are fatigued and frustrated with not receiving an acceptable offer during their listing period.

  • With Pending Sales jumping up in August, we naturally experienced a slight decrease in the number of Active Listings, posting 8.1% fewer compared to July 2022.  The active inventory was 117.4% higher than August 2021.

  • 15.6% of all sales during August 2022 resulted in closing prices above list price.  Historically, statistic is actually more normal compared to the market madness and overbidding we experienced during the first 2 years of the COVID-19 pandemic.

SUMMARY:

    • Over the last several months, the real estate market globally has shifted, with more days to contract, price reductions and cash incentives for Buyers.
    • The rapid appreciation experienced during the first 2 years of the pandemic appears to have ceased, but the market is not dead.
    • On the bright side, Buyers have more opportunities to place offers with little to no competition and potentially receive cash from Sellers to exercise as credits toward closing costs or mortgage rate buy-downs.
    • Mortgages rates have popped back up to around 6% for qualified buyers.  Though this does seem high compared to the historic low rates in 2020 and 2021, Buyers can be thankful that rates are not 18.63%, the peak back in 1981.  It could be much worse!
    • More important than ever, Sellers must not over-price their properties when listing them for sale. Overpriced properties tend to sit longer and lose more value in the long-run due to the need for eventual significant price drops. Maintenance and proper preparation & staging are critical for successful sales as well.

Do you need expert guidance for your next real estate purchase or sale?  As a Buyer, you have more negotiating power than you have in many years, so this may be the time to leverage your next purchase.  Sellers… Let’s meet to strategize about how to professionally prepare and price your property strategically in our marketplace.  I am here for you, whatever your real estate needs are.  Email me at dhallerbach@intero.com or reach by cell at 775-233-0682 so we can discuss the best plan for YOU!

~Denise Hallerbach, Broker-Owner, INTERO RENO.

 

 

Reno-Sparks Market Report August 14, 2022

August 2022 Market Report

** Data in this the August Market Report reflect market activity from JULY 2022 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.

  • The Median Sales Price (MSP) in Reno-Sparks dipped for the second consecutive month, down 4.2% from $600,000 to $574,510. However, the MSP is still 9.4% higher than in July 2021.

  • While the Median Sales Price (MSP) in Reno dropped 6.3% month-over-month, the MSP in Sparks inched down 0.5% to $547,480 compared to last month.  The MSI is still 8.2% and 9.5% higher respectively compared to July last year.

  • Closed Sales are down 7.2% compared to June 2022 and down 34% compared to July 2021. 

  • Month-over-month, the Sold Price per Square Foot in July 2022 dropped 2.1% month-over-month and is 11.1% higher than July last year.

  • Not surprisingly, the $1.5M+ priced homes led the pack with a Sold Price per Square Foot of $535, while the Median Price per Square Foot all price-points in July 2022 was $320.

  •  One of the biggest changes Sellers have been facing in today’s shifting market is the “Months Supply of Inventory (MSI).” Over the last few months, MSI shifted from 0.8 MSI to 3.2 MSI.  Month-over-month, the MSI increase by 17.6% and year-over-year it increased 291%.  A true “balanced market” is approximately 5-7 months supply.

  • Properties priced in the $1M to $1.5M range have inched into the balanced market while $200k-$300k and $1.5M+ priced properties were officially in the Buyer’s Market range in July 2022.

  • Naturally, with the rate of sales declining (as seen in the MSI numbers), the median Days to Contract is a contributing factor of that slow-down we are experiencing.  The median number of days to contract for sale has increased from 14 to 25, a 78.6% increase month-over-month, and a 316.7% leap year-over-year. However… take a look over the last several years… the Median Days to Contract is still WELL below the peaks of 2013, 2016, 2018, & 2019.

  • The graph above illustrates the breakdown of median Days to Contract by price range.

  • New Pending Sales increased 11.3% from June to July 2022.  There are 24.4% fewer New Pending Sales compared to last year.

  • We saw 20.7% fewer New Listings month-over-month and 7.9% fewer New Listings compared to last year.

OTHER INTERESTING STATS TO KEEP AN EYE ON:

  • Keeping an eye on the distressed sale market, at this point, we are still NOT seeing that recent market activity is causing more properties to be sold as foreclosures.  Short-sales are few and far between due to the great amount of equity many home owners currently have in their properties.

  • The % of Cash Purchases has declined 7.8% month-over-month for all single family sales in Reno-Sparks and are 11.1% higher than last year. 25.2% of all sales in July 2022 were cash.

  • Expired and Withdrawn Listings are on the rise! We saw a 235% increase in these occurrences compared to last year.

 

SUMMARY:

    • The Median Sales Price (MSP) in July 2022 was $574,510 in Reno-Sparks, NV, a decreased 4.2% month-over-month.  The MSP is 9.4% higher than July last year.  While the Sparks market did not realize a significant drop in its MSP, Reno’s MSP dropped 8.3% month-over-month.
    • And while New Pending Sales increased in July 2022, New Listings declined.
    • Days to Contract continue to rise, and are now 25 Median days from listing to accepted offer.
    • While the market feels significantly slower that it has been over the last couple of years, looking at graphs over past years of sales, it is clear that we are swinging the pendulum back to what is more “normal” activity. The effects that COVID-Times and historically low interest rates had on real estate were most definitely abnormal and could not be sustained. This correction is exactly what the market was bound to do and SHOULD do.
    • News for Sellers!! Though the market is slower, it is not dead. Buyers are out there, you just need to professionally present your well-maintained property, price it well and possibly get a little creative with potential incentives for your Buyer.
    • Good news for Buyers!!  According to Forbes.com, today (Aug 16, 2022), the average rate on a 30-year fixed mortgage is 5.50%, according to Bankrate.com. On a 15-year fixed mortgage, the average rate is 4.94%.  This does not seem out of control.  Multiple offer scenarios, though not completely eliminated for extremely desirable and well-priced homes, are not as common as they have been during our recent 2-year boom.

Do you need expert guidance for your next real estate purchase or sale?  As a Buyer, you have more negotiating power than you have in many years, so this may be the time to leverage your next purchase.  Sellers… Let’s meet to strategize about how to price your property strategically in our marketplace and present it professionally.  I am here for you, whatever your real estate needs are.  Email me at dhallerbach@intero.com or reach by cell at 775-233-0682 so we can discuss the best plan for YOU!

~Denise Hallerbach, Broker-Owner, INTERO RENO.

Reno-Sparks Market Report October 14, 2021

October 2021 Market Report

** Data in this report reflect market activity from SEPTEMBER 2021 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.

  • The Median Sales Price (MSP) in Reno-Sparks held steady from August to September, at roughly $530,000 for roughly the last 4 months.  The MSP is 20.5% higher than September 2020, and 34% higher than September 2019.  The MSP sits at the very middle of a data set, with exactly half of the houses priced for less and half priced for more.  Will we continue to see a leveling off Median Sale Price as we move into winter? Stay tuned!

  • Up only 3.7% from the previous month, 582 Single Family Homes sold in September 2021. 16.7% fewer homes sold in September 2021 compared to September 2020.

  • Above is the breakdown of Single Family Homes sold in Reno and Sparks by price point, with the 1/2 of all the homes selling in the $400k to $599k ranges.

  • The Average Sold Price per Square Foot over all price ranges ticked up slightly from $301/SF to $302/SF month-over-month.  The Average Sold Price per Square Foot is 26% higher than last year and 38.5% higher than two years ago.

  • For the second straight month, the Months Supply of Inventory (MSI) in September 2021 was .90 MSI.  This means that if the rate of sales in September continued at the same pace through that month, the entire inventory of single family homes would be “sold out” in one month.  A balanced market is approximately 5-6 months supply.

  • MSI by price shows the change of the rate of sales most significantly increased in the luxury market from August and July to September 2021.
  • Please note that the Days to Contract reporting has changed this month.  The Reno-Sparks Association of Realtors is now reporting the MEDIAN Days to Contract instead of the AVERAGE Days to Contract.  This reporting reveals a more realistic picture of what Realtors are experiencing on a daily basis.  That being said, the Median Days from Public Listing to Acceptance of Offers was only 8 days in September 2021.

  • The # of New Contracts (homes with accepted offers) dipped only 3% month-over-month and is 10% more than September last year.  The # of New Contracts is up 16% compared to two years ago.

  • The # of New Listings at 687, dipped 6.3% compared to August 2021 and is 7.2% higher than September last year22% more New Listings hit the market in September 2021 compared to two years ago.

SUMMARY:

    • The Median Sales Price is holding steady at $530,000 in Reno and Sparks combined.
    • The Number of Units Sold increased slightly in September compared to August.
    • The rate of accepted offers and sales continues to favor most Sellers.  While a balanced market sees 5-6 Months Supply (MSI), the MSI over all price points is still 1 month.
    • The appropriate pricing of listings continues to be a critical factor for determining Days to Contract.  Homes priced significantly above market value tend to not receive offers, and therefore sit on the market longer than homes prices competitively.
    • We have seen a slightly higher volume of New Listings now and we did two years ago.  And looking at both the New Contracts and New Listings graphs, the trends over the last couple of years are nearly identical.
    • The biggest shift in inventory movement was observed in the luxury market, now at 4.2 Months Supply of Inventory, as this selection of homes inches closer to a balanced market.
  • Predictions for what is to come?
    • Chief economists in the real estate industry predict that our enjoyment of sub-3% mortgage rates are behind us at the moment,  and that rates will inch closer to approximately 3.5% by the year’s end. The threat of higher rates may put more pressure on Buyers to take action now.
    • Incentive to purchase with rates before they increase, continued low inventory, and steady flow of relocation buyers into Nevada appear to keep the Median Sales Price steady at the moment.
    • As with any market, Supply and Demand will continue to dictate price movement.  As long as inventory is low and demand remains constant, prices will most likely continue to increase… perhaps more after the fall and winter months?
  • Are you in need of guidance for your next real estate purchase or sale?  I am here for you.  Email direct dhallerbach@intero.com or reach by cell at 775-233-0682 so we can discuss the best plan for YOU!  Thank you, ~Denise Hallerbach, Broker-Owner, INTERO RENO.
Reno-Sparks Market Report June 10, 2021

June 2021 Market Report

** Data in this report reflect market activity from MAY 2021 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.

  • May 2021’s Median Sales Price in Reno-Sparks has breached the $1/2 Million mark, now at $502,000.  This represents another slight increase of 1.5% month-over-month, and a 25.5% increase year-over year and is a major milestone in market history. The Median Sales Price sits at the very middle of a data set, with exactly half of the houses priced for less and half priced for more.

  • 535 single family homes sold in May 2021.  This represents about an 8% decrease compared to April 2021 and a 32.4% increase compared to May last year.

  • The chart above illustrates a shift in volume of single family homes sold in Reno-Sparks.  As seen over the last few months, this shift has taken place with the number of units sold from the $300k-$400k range, and into the $400k-$500k range.  We are seeing that the homes our buyers were searching for last year in the $300k-$400k range, are now priced and selling in the $400k-$500k range.  This is causing these buyers to lower their standards in the homes they are able to purchase OR become creative in their structuring of their loan (for example, lowering their down payment and exercising private mortgage insurance).

  • Once again, the Average Sold Price per Square Feet continues to tick up!  Over all price-points, the single family homes in Reno-Sparks are selling for an average of $295/sqft.

  • Please refer to the chart above for a breakdown of the Average Sold Price per Square Foot by Price Range in March and May 2021.  Sold Price per Square Foot has increased in 7 of 8 price-ranges over the last few months.

  • The Months Supply of Inventory (MSI) in May 2021 sits at 0.6 MSI.  May 2021’s MSI is a 75.6% lower than in May 2020. This means that what little active inventory we have would “sell out” in only 3 weeks if sales continue at the current rate.  A balanced market is more like 5-6 months supply.

  • Observe the chart above, the Months Supply of Inventory (MSI) by Price.  With all price levels well-below the balanced market of 5-6 months, Buyers are continue to find themselves in multiple offer situations, resulting in overbidding to secure their home.

  • Just what effect has our low inventory had on the playing field of real estate? Over all price-points, the average Percentage of List Price Received in May 2021 was 103.6%!!  Remember, this is an average!!  I personally sold a home in Sparks last month that sold 109.4% over appraised value!

  • The graph above shows the recent spike in % of List Price Received.  Indeed, it has been an extremely competitive market here in Reno-Sparks over the last several months.

  • The average Number of Days, Listing to Contract, over all price points in May 2021 was only 14!  Check out the graph below for the breakdown at each price-point.

  • Here is the breakdown by price-point over the last few months for the Average Number of Days from Listing to Contract.  The quick-moving market does not appear to discriminate against home value or pricing.

  • 606 single family homes when into contract in May 2021, up 7.6% month-over-month and up 12% year-over-year.

  • May 2021 saw 9% fewer New Listings come to market than the previous month, and 5% fewer New Listings compared to May 2020.

SUMMARY:

  • In general, the real estate market in Reno-Sparks, Nevada continues to move at rapid pace.
  • Sellers enjoy a market with multiple offers that are over asking price, and often waive or commit to some value over appraisal if an appraisal is required by the Buyer’s lender.
  • Both the Reno-Sparks Median Sales Price and the Average Sold Price per Square Foot continue to steadily climb… $502,000 and $295/sqft up 1.5% and 1.7% respectively month-over-month.
  • For the fifth consecutive week, mortgage interest rates have lingered below 3% for qualified borrowers, according to FoxBusiness.com. This appears to continue to incentivize Buyers in this highly competitive market.  However, experts predict that interest rates will edge closer to 4% later this year… Finance.yahoo.com.
  • What are YOUR real estate needs? If you need to buy and/or sell, I’m here to guide you through every step of the way. Sell your current home while purchasing your next home?  My clients have experienced great success at doing just this with the plans we have implemented!!  Email direct dhallerbach@intero.com or reach me by cell at 775-233-0682 so we can discuss the best plan for YOU!  Thank you, ~Denise Hallerbach, Broker-Owner, INTERO RENO.

 

Reno-Sparks Market Report February 25, 2021

February 2021 Market Report

** Data in this report reflect market activity from JANUARY 2021 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.

  • In the Reno-Sparks market, the Median Sales Price has been lingering near $450K for the last several months.  But don’t let that statistic fool you.  Remember, the median sales price represents the very middle of a data set, with exactly half of the houses priced for less and half priced for more.  A higher number of homes sold in one end of the data set can make it appear that the market is cooling, but other aspects of the market say otherwise.

  • With only 370 single family homes selling in Reno AND Sparks during Jan 2021, the “non-movement” of the median sales price could largely be a factor of more homes selling in the lower price-range.  As seen in the chart below, the circled portion (homes under $500k) represents 62% of the sold inventory in January 2021. This explains why we did not see an increase this month in the Median Sales Price.

  • The graph above represents the distribution of sold properties by price-point.  62% of the units sold were under $500k.  This distribution of sold properties is a large reason why the Median Sales Price is still hovering around $450k.

  • Overall, the Average Sold Price per Square Foot has leaped again, up 18.4% compared to the beginning of 2020, and has inched up .6% month-over-month.  This average represents properties sold over ALL price ranges.

  • Refer to the chart above for a breakdown of the Average Sold Price per Square Foot by Price Range,

  • You’ve been hearing about our region’s housing shortage, right?  The graph above illustrates what has been happening with the rate and supply of sales in Reno and Sparks over the last year.  The Months Supply of Inventory is  down a staggering 73% compared to January 2020.  It held steady at 2 weeks of supply over all price points. 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.  A balanced market is around 5-6 months of supply, therefore, we are still very much in a “Seller’s Market.”

  • Once again, 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 2.6 months supply, also quick-moving in today’s fast-moving real estate market.  In the past, several years, the high-end market would typically over 7 months supply.

  • Single family residential properties are going into contract even more rapidly than the already hot market we have been experiencing over the last several months.  Since the pandemic began truly shaking the wold, the real estate market has been fast-moving.  In January 2021, it took only an average of 26 days to receive an accepted offer.  This accounts for ALL price points in the Reno-Sparks market and is 61% quicker than January 2020.

  • The Average Days to Contract for homes priced under $600k was only 18 days.  The $1-1.5M price range saw homes on the market for an average of 116 days before going into contract.  Perhaps initial overpricing played a part in this particular set of homes?

  • The market saw 20% fewer contracts in January 2021 compared to January 2020, yet rose 10% from the previous month.  This is the time of the year when we start seeing a turn upwards in general activity.
  • As seen in the last two graphs, the count for New Listings has been a near mirror of the New Contracts count.  January 2021 saw 22% more new listings year-over-year and 19% more New Listings month-over-month.

SUMMARY:

  • These days, when “dialed-in” and “move-in-ready” homes come to market, they are often snatched up in about 1 to 3 days, with back-to-back showing appointments during those only days on the market.  Multiple competing offers flood the inboxes of listing agents, allowing Sellers to capitalize on the hot market, and resulting in the highest possible net to those Sellers.
  • While the average 30-year fixed rate mortgage was sub-3% in January, as of February 24, 2021, Bankrate.com reports, “The average rate for a 30-year fixed-rate mortgage is 3.13 percent, an increase of 19 basis points over the last week.” Though on the surface, this appears to be bad news, 3.13% is still very low.  In addition, BusinessInsider.com projects, “As the US continues to face the economic fallout of the COVID-19 pandemic, mortgage rates will likely stay low. ”  This is good news for buyers who are struggling to get their offers accepted today in this fiercely competitive market.  Buyers need all the help they can get right now, and more inventory in the spring months would help too.
  • The market is absorbing new listings at an extremely fast rate, with only an average 2-weeks supply of inventory in Jan 2021.
  • The Median Sales Price, the mid sales-point for sold homes of all price-ranges, is 10% higher than last year.
  • The Average Sold Price per Square Foot continues to steadily rise and is now $261/square feet in Reno-Sparks.
  • Single-family residences continue to move very quickly at an average of 26 days from listing to contract, 61% faster than this same month last year.
  • Today’s fast paced sales beg for Realtors who think on their feet and have the experience and skills to handle the demands of this hot market.  Buyers and Sellers benefit from choosing a professional to handle every detail to navigate them through a successful purchase or sale.  If you need me, I’m there. Email direct dhallerbach@intero.com or reach me by cell at 775-233-0682.  Thank you, ~Denise Hallerbach, Broker-Owner, INTERO Reno
In-The-Know Real Estate Blog January 30, 2021

What Happens When Homeowners Leave Their Forbearance Plans?

According to the latest report from Black Knight, Inc., a well-respected provider of data and analytics for mortgage companies, 6.48 million households have entered a forbearance plan as a result of financial concerns brought on by the COVID-19 pandemic. Here’s where these homeowners stand right now:

  • 2,543,000 (39%) are current on their payments and have left the program
  • 625,000 (9%) have paid off their mortgages
  • 434,000 (7%) have negotiated a repayment plan and have left the program
  • 2,254,000 (35%) have extended their original forbearance plan
  • 512,000 (8%) are still in their original forbearance plan
  • 116,000 (2%) have left the program and are still behind on payments

This shows that of the almost 3.72 million homeowners who have left the program, only 116,000 (2%) exited while they were still behind on their payments. There are still 2.77 million borrowers in a forbearance program. No one knows for sure how many of those will become foreclosures. There are, however, three major reasons why most experts believe there will not be a tsunami of foreclosures as we saw during the housing crash over a decade ago:

  1. Almost 30% of borrowers in forbearance are still current on their mortgage payments.
  2. Banks likely don’t want to repeat the mistakes of 2008-2012 when they put large numbers of foreclosures on their books. This time, many will instead negotiate a modification plan with the borrower, which will enable households to maintain ownership of the home.
  3. With the significant equity homeowners have today, many will be able to sell instead of going into foreclosure.

Will there be foreclosures coming to the market? Yes. There are hundreds of thousands of foreclosures in this country each year. People experience economic hardships, and in some cases, are not able to meet their mortgage obligations.

Here’s the breakdown of new foreclosures over the last three years, prior to the pandemic:

  • 2017: 314,220
  • 2018: 279,040
  • 2019: 277,520

Through the first three quarters of 2020 (the latest data available), there were only 114,780 new foreclosures. If 10% of those currently in forbearance go to foreclosure, 275,000 foreclosures would be added to the market in 2021. That would be an average year as the numbers above show.

What happens if the number is more than 10%?

If we do experience a higher foreclosure rate from those in forbearance, most experts believe the current housing market will easily absorb the excess inventory. We entered 2020 with 1,210,000 single-family homes available for purchase. At the time, that was low and problematic. The market was experiencing high buyer demand, and we needed more houses to meet that demand. We’re now entering 2021 with 320,000 fewer homes for sale, while buyer demand remains extremely strong. This means the housing market has the capacity to soak up a lot of inventory.

Bottom Line

There will be more foreclosures entering the market later this year, especially compared to the record-low numbers in 2020. However, the market will be able to handle the increase as buyer demand remains strong.

In-The-Know Real Estate Blog January 15, 2021

Will Forbearance Plans Lead to a Tsunami of Foreclosures?

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.

Michael Sklarz, President at Collateral Analytics:

“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.”

Odeta Kushi, Deputy Chief Economist at First American:

“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.”

Don Layton, Senior Industry Fellow at the Joint Center for Housing Studies of Harvard University:

“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.

Bottom Line

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.

Reno-Sparks Market Report November 17, 2020

November 2020 Market Report

** Data in this report reflect market activity from OCTOBER 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.

  • Median Sales Price, at $455,000 for single-family re-sale properties in Reno and Sparks jumped up again 3.4% month-over-month, and is 13.8% higher than October 2019.

  • The Average Sold Price per Square Foot held fairly steady month-over-month at $250/square foot.  This average represents properties sold over ALL price ranges.  For a breakdown of the Average Sold Price per Square Foot, refer to the chart below.  The October 2020 Average Sold Price per Square Foot is 11.7% greater than October 2019.

  • Homes that sold in October 2020 under $600,000 averaged around $235/square foot.  While the upper price ranges pulled in bigger numbers at $312/square foot for the $1M to $1.5 M range, and $414/square foot for homes that sold over $1.5M.

  • The # of Units Sold in September dropped 11.5% month-over-month from 680 to 6169.5% more properties sold in October this year compared to October 2019.  The inventory that sold in October most likely went into contract in September.

  • As seen in the graph above, much like the activity the previous month, the bulk of homes that closed escrow in October 2020 sold between $300k & $500K.  These sales accounted for 55% of the total market share.

  • The Absorption Rate in Reno/Sparks continues to plummet to only 0.6 Months Supply of Inventory. a significant 71% drop year-over-year and a 17% decrease month-over-month.  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 continue to experience a major “seller’s market.”

  • The Absorption Rate across all all price-points is well-below a balanced market.  Even high-end, luxury  properties priced over $1.5M saw only 2.3 months supply of inventory during October 2020.

  • Properties continue to spend a very short period of time on-market before going under contract.  Over all price-points, the average days from listing to accepted offer in October 2020 was 34 days.  Properties are moving 41% more quickly into contract than October 2019. 

  • In October 2020, the fastest moving properties were those priced between $300k and $500K, spending an average of only 18.5 days on market.

  • The # of New Contracts over the last several months has held fairly steady.  During the month of October 2020 we saw 21% more new contracts compared to October 2019.  No significant change was noted in the # of New Contracts month-over-month.  

  • The # of New Listings to come to market during October 2020 dropped another 8.5% month-over-month, while increasing 11.5% compared to October 2019.

SUMMARY:

  • While the weather in Northern Nevada has cooled, the real estate market has most certainly NOT!  Inventory remains staggeringly low at 0.6 month supply of inventory and indicates continued high buyer-demand and a rapid rate of sale.
  • Low inventory and high buyer demand continue to place heavy upward pressure on prices, as seen in another jump in the Median Sales price.  At $455,000, the Median Sales Price is 3.4% higher month-over-month and 13.5% greater year-over-year.
  • The Average Sold Price per Square Foot is 11.7% higher than October 2019.
  • Average days from List-To-Contract remains low at 34 days.
  • The # of New Contracts in October 2020 held steady month-over-month.  The New Contract count in October was 21% higher than the same time 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.  Email direct dhallerbach@intero.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.
Reno-Sparks Market Report October 15, 2020

October 2020 Market Report

** Data in this report reflect market activity from SEPTEMBER 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.

  • Median Sales Price, at $440,000 for single-family re-sale properties in Reno and Sparks held steady in September 2020, posting a mere 1% dip compared to August 2020, and has shown an increase of 11% year-over-year. 

  • The Average Sold Price per Square Foot continues its upward trend we have been experiencing over the last several months.  Single-family residences sold in Reno-Sparks in September 2020 sold for an average of $249/sqft, a 5% increase month-over-month and an 10% increase year-over-year.

  • Though the Average Sold Price per Square Foot is $249/sqft, once again, homes that sold in September 2020 for over $750k appear to be pulling this average upward.  Homes that sold between $1M and $1.5M averaged $327/sqft, and homes that sold for over $1.5M averaged $439/sqft!

  • The # of Units Sold in September ticked up 4% month-over-month from 644 to 680.  The # of Units Sold is 12% higher than this same time last year.  Please note that homes closing in September likely went into contract in August 2020, accounting for a typical 30-day escrow.

  • As seen in the graph above, the bulk of homes that closed escrow in September 2020 sold between $300k & $500K.  These sales accounted for 60% of the total market share.

  • September’s Absorption Rate continued its downward trajectory and is at a new low of 0.7 Months Supply of Inventory. a staggering 71% drop year-over-year and a 25% decrease month-over-month.  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, this is a profoundly “seller’s market.”

  • As just mentioned, a “Balanced Market” sees about 5-6 months of inventory.  Even the high-end luxury market is realizing only 3.5 Months Supply of Inventory, and is very much a “Seller’s Market” as well, while the $300k-$500k inventory is less than 1/2 a month of supply!

  • The # of Days from Listing to Contract since the COVID 19 economic shut-down in March has averaged 36 days.  In September 2020 the overall average Days to Contract followed this trend.  Single family residences are taking about 30% less time to receive and acceptable offer this year than in September 2019.  These averages account for all price ranges.

  • While homes priced $300k-$400k received an accepted offer an average of only 16 days from listing, the upper price points of $$1M+ did take an average of a few months to accept an offer.

  • Over the last 4 months, the # of New Contracts has lingered around 720 per month.  During the month of September 2020 we saw 34% more new contracts than the same month last year and 8% fewer new contracts than the previous month.

  • The # of New Listings to hit the market dropped 8% month-over-month, while decreasing 10% compared to September 2019.

SUMMARY:

  • So why are folks moving to Northern Nevada?  They have recently found that they can work from anywhere… They are moving here for the jobs that are being created here… Their companies are moving them here.  They are purchasing their retirement homes (both ahead of and after their retirement date)… They loathe the tax burdens of our neighboring state… They are threatened by wildfires and/or have devastatingly lost their home because of them.  Pick your reason… the mass influx of new Northern Nevadans is real.
  • While the Median Sale Price in Reno-Sparks is holding steady, so too are low interest rates.  Sub-3% interest rates for many qualified buyers may be keeping those buyers in the market.
  • The combination of historically low 0.7 Months Supply of Inventory and high buyer demand continue to add fuel to the very hot residential real estate market today.
  • The Average Sold Price per Square Foot continues is upward trend, and appears to be driven by the high-end luxury market.
  • Average days from listing to contract remains low at 36 days.
  • The # of New Contracts in September 2020 continue to rise.
  • 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 dhallerbach@intero.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.
In-The-Know Real Estate Blog September 10, 2020

How Will the Presidential Election Impact Real Estate?

The year 2020 will be remembered as one of the most challenging times of our lives. A worldwide pandemic, a recession causing historic unemployment, and a level of social unrest perhaps never seen before have all changed the way we live. Only the real estate market seems to be unaffected, as a new forecast projects there may be more homes purchased this year than last year.

As we come to the end of this tumultuous year, we’re preparing for perhaps the most contentious presidential election of the century. Today, it’s important to look at the impact past presidential election years have had on the real estate market.

Is there a drop-off in home sales during a presidential election year?

BTIG, a research and analysis company, looked at new home sales from 1963 through 2019 in their report titled One House, Two House, Red House, Blue House. They noted that in non-presidential years, there is a -9.8% decrease in November compared to October. This is the normal seasonality of the market, with a slowdown in activity that’s usually seen in fall and winter.

However, it also revealed that in presidential election years, the typical drop increases to -15%. The report explains why:

“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty.”

Are those sales lost forever?

No. BTIG determined:

“This caution is temporary, and ultimately results in deferred sales, as the economy, jobs, interest rates and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”

In a separate study done by Meyers Research & Zonda, Ali Wolf, Chief Economist, agrees that those purchases are just delayed until after the election:

“History suggests that the slowdown is largely concentrated in the month of November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year.”

Will it matter who is elected?

To some degree, but not in the overall number of home sales. As mentioned above, consumer confidence plays a significant role in a family’s desire to buy a home. How may consumer confidence impact the housing market post-election? The BTIG report covered that as well:

“A change in administration might benefit trailing blue county housing dynamics. The re-election of President Trump could continue to propel red county outperformance.”

Again, overall sales should not be impacted in a significant way.

Bottom Line

If mortgage rates remain near all-time lows, the economy continues to recover, and unemployment continues to decrease, the real estate market should remain strong up to and past the election.