At the start of 2020 most housing market forecasts were all about 2020 home sales exceeding those of 2019 — itself a very good year for the housing market.
A few examples:
- “A strong job market and low mortgage rates should sustain the housing market in 2020.” — from Experts predict what the 2020 housing market will bring [January 6, 2020]
- “…some housing markets are poised to see more explosive growth in 2020, including Boise, Idaho, and Tuscon, Ariz.” – from Will 2020 be a good year to buy a home? Here’s what the experts say [January 21, 2020]
- “…the market is on better footing than it was a year ago, when economic uncertainty caused by global trade tensions, stock market volatility and a partial government shutdown, along with rising mortgage rates and home prices, put a damper on sales.” — from Experts predict what the 2020 housing market will bring [January 6, 2020]
- “New-home sales are expected to rise to 750,000, an 11 percent increase that puts them at a 13-year high. Existing-home sales will continue to be held down by lack of supply, rising modestly to 5.6 million, a 4 percent increase. The national median sale price of an existing home is expected to grow to $270,400, an increase of 4.3 percent from 2019.” – from the National Association of REALTORS® 2020 Annual Residential Forecast [November 8, 2019]
- “The U.S. housing market is off to a strong start in 2020 as a deepening shortage of homes for sale and surging homebuyer demand are set to push prices up at the fastest rate in years.” — from 2020 Housing Market Forecast: More Buyers, Fewer Homes for Sale [January 29, 2020]
Indeed, the housing market, both nationally and locally, started 2020 with higher year-over-year sales numbers. A look at 1st quarter monthly units sold in the Reno-Sparks, Nevada market shows January, February, and March home sales greatly exceeding year-over-year numbers.
- January sales up 20.1%
- February sales up 26.7%
- March sales up 12.7%
Locally, 2020 began the year with cumulative 1st-quarter sales 19.4 percent ahead of 2019 1st-quarter sales. 2020 was looking to be a great year for the housing market.
But then the Coronavirus Pandemic exploded
As the impact of the Coronavirus Pandemic spread across the world and the economy the housing market was one of the areas hardest hit. Stay-at-home restrictions were imposed. People were laid off. Buyer activity screeched to a halt. Viewings of homes were restricted, or disallowed altogether. And homes already in contract were falling out of escrow.
All of these things drastically depressed home sales in what normally would have been the robust spring home buying season.
Below are 2020 2nd-quarter monthly units sold in the Reno-Sparks market compared to to 2019 home sales.
- April sales down 26.3%
- May sales down 40.9%
- June sales down 1.2%
Fewer homes were sold in the 2nd quarter of 2020 than were sold in the 1st quarter — a phenomenon not observed in any year previously.
In fact, 2020 2nd-quarter sales were so depressed (down 23.9 percent) that they wiped out any gains observed in the 1st quarter. The number of homes sold in the 1st half of 2020 was off 7.0 percent from the same time period in 2019.
Any hopes of 2020 being a breakout year for the housing market were now dashed.
But then things changed
As people began to come to terms with the Coronavirus Pandemic, and restrictions were lifted, buyer activity resumed — in a BIG way!
Fueled by record low interest rates, pent-up buyer demand, and the need for larger homes in order to accommodate the new work-from-home world, homes sales took off. Also contributing to the surge in home sales was the influx of out-of-area buyers leaving large urban areas and seeking less dense locales such as Reno, Nevada.
It was as if the flood gates had opened.
July sales in the Reno-Sparks market set a monthly high for the year — coming in at 748 homes sold — up a whopping percent from July 2019.
3rd-quarter monthly sales numbers saw large year-over-year increases for each of the months.
- July sales up 23.0%
- August sales up 5.1%
- September sales up 18.6%
In fact, 3rd-quarter sales were so high that something remarkable occurred. On September 21, 2020 year-to-date sales in the Reno-Sparks market surpassed the number of sales for the same time period in 2019.
- 9/21/20 year-to-date home sales: 4,542
- 9/21/19 year-to-date home sales: 4,539
How will 2020 finish?
With just 2½ months remaining in 2020; cumulative year-to-date home sales [as of October 18, 2020] now a comfortable 1.6 percent ahead of 2019 sales for the same period; and buyer demand showing no signs of receding; it is safe to assume that 2020 home sales in the Reno-Sparks market will exceed the number of homes sold in 2019.
The intense buyer demand coupled with the extremely low inventory of homes for sale has also had a similar effect home prices. In fact, monthly median sale prices have set record highs four times in 2020. And October is on track to set a 5th.
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Note: 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 – October 18, 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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