Housing market forecast 2020 for Incline Village, Carson City and other norther Nevada markets

According to the latest CoreLogic Home Price Index (HPI®) Report: National home prices increased 3.7% year over year in November 2019 and are forecast to increase 5.3% from November 2019 to November 2020,

Recently I published a blog post where I attempted to forecast where Reno-Sparks home prices would be at the end of this year (2020). See Reno housing market forecast 2020

My methodology consisted of applying CoreLogic’s 2020 forecast for home prices nationally to the current median sales price for the Reno-Sparks market after adjusting for the relative difference in home price appreciation for Reno-Sparks compared to that of the U.S. [Again, see Reno housing market forecast 2020 for additional detail.]

Because many readers of this blog are also interested in home prices in other Northern Nevada housing markets, I employed the same methodology to other area housing markets in order to derive 2020 forecasts for those markets.

The table below shows the results of that exercise (click on the table to enlarge).


Methodology

The table above contains data for housing markets surrounding the Reno-Sparks metro area. These markets include: Carson City, Dayton, Fernley, Minden/Gardnerville, and Incline Village. I also separated Reno from Sparks and included data for each in the table.

For each market I reported the median sales price for the 12-month periods: December 2017 – November 2018; and December 2018 – November 2019. I chose time periods ending on the month of November in order to correspond with the time period reported on in the aforementioned CoreLogic.

After determining the median sales price for each of the 12-month periods I calculated the percent increase in median sales price appreciation for each of the markets in the table.

Given the rate of home price appreciation, I then calculated two home price forecasts for 2020 [See the last two columns in the table] — one forecast assumed a market’s identical rate of growth as observed in 2019; the other forecast utilized a revised (upward) rate of home price appreciation that was based off of CoreLogic’s projection for home prices nationally after adjusting for the relative difference in home price appreciation for Reno-Sparks compared to that of the U.S.

Forecasts / Findings

While the two forecasts [see the last two columns in the table] provide a range where the 2020 median home price for each market may land, it is the differences in home price appreciation observed across markets that is particularly noteworthy.

Dayton, Nev. saw the largest home price appreciation with a 10.2 percent increase in the median homes price in 2019 over 2018. After Dayton was Carson City with an 8.1 percent increase in the median homes price in 2019 over 2018, followed by Fernley, Nev. with a 6.0 percent increase during the same time period. Each of these markets saw substantially higher rates of increase over Reno and Sparks 3.7 and 3.6 percent increases, respectively.

At the lower end of the appreciation scale was the Gardnerville/Minden market, which saw a 3.1 percent growth in home prices — below the national home price year-over-year appreciation of 3.7 percent for the same time period.


Is there a northern Nevada market in which you’re interested that I did not include? If so, let me know in the comments below.

Thank you for reading the Reno Realty Blog. – Guy

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

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RSAR Market Reports for Reno, Sparks, and Fernley, Nevada – December 2019

The Reno/Sparks Association of REALTORS® (RSAR) has released December’s Market Reports for Reno, Sparks, and Fernley, Nevada.

The following infographics highlight each market’s housing numbers. Click on the infographics below to access the entire reports.

Reno infographic

Sparks infographic

Fernley infographic

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Is Reno, Nevada’s home price appreciation uniform across all price segments?

Earlier this week I published Reno-Sparks’ monthly housing market numbers for December 2019. In that blog post, I noted that December’s median sales price of $394,000 was up a healthy 7.95 percent year over year (YOY). I described the YOY price appreciation as “healthy” because that number was higher than the annual increase observed a year ago. [For context, December 2018’s YOY price growth was 5.79 percent. Therefore 2019’s home price appreciation was more than 37 precent higher than 2018’s. That’s remarkable.]

Reno’s appreciation compared to the nation

Providing additional context, from the latest CoreLogic Home Price Index (HPI®) Report: “National home prices increased 3.7% year over year in November 2019…” So, Reno-Sparks’ median home price annual gain of 7.9% in 2019 was more than double the rate of home prices nationally. Wow!

In fact, after ranking all fifty states in order of home price appreciation, only two states had annual increases in home prices greater than that of the Reno-Sparks market. Idaho had a 10.2 percent annual increase and Maine had an 8.6 percent annual increase. [Incidentally, as a whole, the state of Nevada saw home prices increase by 3.2 percent year over year in November — less than the national average.]

What market segments are seeing the biggest gains?

We know the Reno-Sparks’ market as a whole is doing well, but are these gains uniform across all price segments? The short answer is No.

If we drill down a bit deeper, some interesting observations are made.

I began the analysis by splitting December 2019 sales into quartiles (four equal parts) based off of closed sold price — with quartile 1 being the lowest prices sales and then progressing to quartile 4, the highest priced home sales.

I then did the same with December 2018’s sales data. Once I had both data sets split into their respective quartiles, I was able to calculate the sold price increase (or decrease) for the year for each quartile. The results are in the table below [click on the table to enlarge].

I found the data in this table to be very interesting. Looking at the last column, the median sales price of quartile 1 (the lowest priced home sales) actually saw a slight decline from a year earlier. The other three quartile each saw annual increases to their respective median sales prices.

While quartiles 2 and 3 each saw robust annual gains, it is quartile 4 (the highest priced home sales) that really skyrocketed. The median sales price of the homes in quartile 4 exhibited an annual increase of more than 16 percent!

Should we be surprised?

Upon observing the larger gains in the highest-priced homes segment, I was reminded that one year ago I published a blog post entitled Reno-Sparks luxury home prices skyrocket in 2018.

In that January 2019 blog post I wrote, “The luxury home segment is the fastest growing segment in the Reno-Sparks market.”

The data compiled above shows the 2019 luxury home market outperformed as well. Is this a precursor to 2020? I believe so.

Reno-Sparks Median Home Price Appreciation by Quartile (December 2019)


As always, I thank you for reading and I welcome your comments below.

Posted in Agent Insights, Luxury, Reno, Sparks | Tagged , , , | 2 Comments

Reno housing market forecast 2020

As a REALTOR®, “How’s the market?” is probably the question I get asked most frequently. And, “Where are home prices heading?”, is the second most frequently asked question.

Though the first question is always easily answered, the second question presents more of a challenge. There are so many factors to consider (e.g. the economy, job growth, mortgage rates, housing inventory, buyer demand, seller demand, and many more) in formulating an answer that it becomes difficult to predict.

When answering, I utilize a trusted source’s prediction for the nation’s housing market and then apply it to the Reno-Sparks housing market in order to derive a forecast for 2020.

Yesterday, I read CoreLogic’s latest Home Price Index (HPI®) Report. In their report, CoreLogic stated, “National home prices increased 3.7% year over year in November 2019 and are forecast to increase 5.3% from November 2019 to November 2020.” This statement provided me a starting point for my analysis.

Why CoreLogic?

From CoreLogic’s website, the firm has national property data spanning 50+ years, and they tout a 99.5% accuracy standard (see the screenshot below). Frequent readers of this blog know that I often link to CoreLogic’s reports.

Deriving a 2020 forecast Reno, NV

My methodology for applying CoreLogic’s 2020 prediction to the Reno real estate market is to first look at our market’s median home price year-over-year gain during the same period reported on in the CoreLogic report – specifically, from November 2018 to November 2019. So, let’s begin…

November 2018’s median closed sales price for the Reno-Sparks’ market was $377,250. One year later, November’s median home price has risen to $400,000 — representing an annual increase of 6.0 percent.

Comparing that increase to the nation’s average home price appreciation (3.7%) for the same time period shows that Reno’s increase was 63 percent greater than the national average. That’s remarkable!

Assumption

For 2020, CoreLogic predicts national home prices to spike 5.3% from November 2019 to November 2020. If we make the assumption that Reno home prices will again outpace the national average by the same degree that they did in 2019, we can then increase CoreLogic’s prediction by 63 percent when applying theirs to the Reno housing market. Doing so yields an 8.64 percent (5.3% X 1.63) appreciation.

As stated previously, November 2019’s median sales price for Reno-Sparks was $400,000. Applying a projected price appreciation of 8.64 percent to that median price yields $434,556.

So, if this methodology is correct, then Reno-Sparks median sales price should increase to $434,556 by November 2020.

Thoughts?

What do you think? Is a $434,000 median sales price in 2020 realistic?

I would love to hear your thoughts on what you think the median sales price will be at the end of this year. Please leave your comments below.


Thank you for reading the blog. Much appreciated!

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December median sales price and other market metrics

Reno-Sparks unit home sales climb in December; median sales price recedes; inventory plummets

Median Sales Price

December’s median sold home price for Reno-Sparks was $394,000 for the month — a 1.5 percent drop from November’s median sales price of $400,000.

Year-over-year, December’s median closed sales price was up a healthy 7.95 percent.

December’s median sold price per square foot (PPSF) was essentially unchanged — coming in at $216.61, or $0.05 below November’s $216.66/sq.ft.

Year-over-year, December’s median sold PPSF is up 3.2 percent.

Homes Sold

Home sales rose to a robust 503 units sold in December — representing an 11.0 percent increase over November’s 453 homes sold. However, it should be noted that unit sales typically pop in December as many home buyers desire to close prior to the end of the tax year.

Year-over-year, December’s number of homes sold was up a whopping 30.6 percent over the 385 homes sold in December 2018.

For the 2019 calendar year, home sales were up a healthy 4.5 percent compared to the same period last year — 6,258 vs. 5,990, respectively.

Inventory

Currently 776 homes are available for purchase in the Reno-Sparks market. This number is down a staggering 18.8 percent from the 956 homes available for sale this time last month. Year-over-year, current available inventory is down a sobering 27.8 percent.

Pending sales also fell in December. Presently, 541 homes are pending sale in the Reno-Sparks market. That number is down 20.8 percent from the 683 homes pending sale this time last month. As pendings continue to decline, expect unit sales to decline as well.

Despite its monthly decline, year-over-year, current pending sales are unchanged from the number of pending sales this time last year.

Days on Market

December’s median days on market (DOM) clocked in at 81 days — a increase of 8 days over November’s median DOM. Year-over-year, December’s DOM number is up 4 days over December 2018’s number.

Sales by Type

December sales by type, break out as follows:

  • REO sales: 1.0% – up over November’s 0.9%
  • Short sales: 1.0% – up over November’s 0%
  • Subject to Court Approval sales: 1.2% – down from November’s 1.6%
  • Relocation sales: 0.6% – up from November’s 0%
  • Equity sales: 96.0% – down from November’s 97.5%

Sales by Price

December sales by price band, break out as follows in the table below…

Sales by Price Segment
sales price ($000’s) units sold cumulative % of sales
0 – 99 0 0%
100 – 199 6 1.2%
200 – 299 97 20.5%
300 – 399 163 52.9%
400 – 499 113 75.3%
500 – 599 41 83.5%
600 – 699 26 88.7%
700 – 799 18 92.2%
800 – 899 12 94.6%
900 – 999 7 96.0%
1M+ 20 100%
total 503

December’s median sold price for houses and condos combined was $370,000 — a 0.3 percent decrease from November’s median sold price of $371,000 for combined sales of houses and condos.

The table below contains the past 13 months of data[1]

Past 13 Months of Home Sales Data
Month Year # Sold Median Sold Price Sold Price per Sq Ft Median DOM # of Actives # of Pendings
Dec 2019 503 $394,000 $216.61 81 779 541
Nov 2019 453 $400,000 $216.66 73 956 683
Oct 2019 561 $399,995 $216.67 76 1,090 773
Sep 2019 578 $395,000 $218.87 68 1,283 814
Aug 2019 623 $399,000 $213.78 64 1,342 898
Jul 2019 605 $406,000 $217.39 60 1,367 906
Jun 2019 570 $400,000 $219.78 55 1,252 915
May 2019 680 $390,000 $220.27 54 1,163 911
Apr 2019 531 $375,000 $213.73 65 996 923
Mar 2019 458 $369,000 $207.92 78 867 815
Feb 2019 362 $372,150 $208.84 89 888 774
Jan 2019 325 $362,000 $210.44 86 961 655
Dec 2018 385 $365,000 $209.82 77 1,079 541

Thank you for taking the time to read this market report. As always, your comments and questions are welcomed.


1. The medians table above is updated on a monthly basis. The median home price data reported covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. Residential data includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – January 7, 2020. Note: This information is deemed reliable, but not guaranteed.

For historical home sale data dating back to 1998 click here.

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

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About the weather


Courtesy of the National Weather Service…

  • Reno’s highest temperature in 2019 was 100° — set on August 15, 2019
  • Reno’s lowest temperature in 2019 was 10° — set on February 11, 2019
  • Total calendar year precipitation in 2019 was 11.14” — 3.74” above normal

If you’re curious about other Reno, NV annual climate stats, go to the National Weather Service Forecast Office for Reno, NV and select “annual climate report” for Reno and “most recent” for the time frame. Lots of good data there.

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