How is the coronavirus pandemic impacting the Reno-Sparks housing market? [Update for the week of April 19th – 25th]

Note: This post is the third in a series of weekly updates on the impact of the coronavirus pandemic on the Reno-Sparks housing market.


April 29, 2020 Update: Why the surge in “withdrawn” listings?

One of the metrics reported on in the post below is the very large spike in listings being taken off the market last week. In the post I report that for the week of April 19th – 25th, “…the number homes taken off the market surged to 84. This number is up 171 percent from the previous week, and is nearly 7 times that of the pre-coronavirus weekly average.”

So what happened to cause this surge? The answer is a team in our market with a substantial number of active listings changed brokerages last week. And along with the team’s move, so did the team’s listings move as well. In order to transfer the team’s listings from one brokerage to another each listing had to be withdrawn from the MLS and then re-added under the new brokerage. This team’s move accounted for ~71 listings being withdrawn and re-entered. If not for this team’s move, the number of “withdrawn” listings would have been 13 for the week. 13 withdrawn listings represents a 58 percent decrease from the week prior, and is almost back to pre-coronavirus weekly levels. A very positive sign.

A flip side to not counting these 71 transferred listings in the number of “withdrawns” is that they also should not be included in the number of new listings for the week. That is because when these listings were re-entered into the MLS under the new brokerage, they appeared as “new” listings when in actuality they were pre-existing listings that were simply transferred.

Removing these 71 listings from the number of new listings reported in the video reduces the number of actual new listings for the week of April 19th – 25th from 187 to 116. 116 new listings for the week represents a healthy 26 percent increase over the week prior — another positive sign.


April 27, 2020 Update: Let’s begin with some positive news!

New Listings

New listings hitting the market saw an impressive comeback this past week. After slowing down to a rate that was more than 53 percent off of year-over-year numbers two weeks ago, last week’s new listings staged a massive rally with 187 new listings hitting the market. That number was not only up 103 percent over the previous week, but also is up 1.6 percent over 2019’s weekly number of new listings.

Could the worst of the coronavirus pandemic’s impact on the new listings be behind us?

Back on Market

Last week saw a substantial drop in the number of properties returning to market. Recall, these “back on market” properties represent transactions that were in escrow and scheduled to close, but for some reason fell out of escrow, and returned to the MLS.

Prior to last week, since mid-March, back-on-markets have been averaging 37 properties a week. Last week only 14 properties came back to market. This number represent a 56 percent drop from the previous week.

Though still higher than the historical (pre-coronavirus pandemic) weekly average, last week’s number is getting closer to “normal”. Another good sign!

New Pendings

Perhaps the most positive indication of the lessening of the coronavirus pandemic’s impacts on our local housing market is the number of new pending sales. Last week saw 123 homes put into contract as pending sales. This number is up 8.8 percent from the number of new pendings the week prior. But more remarkable is that last week’s new pendings is equal to the number of new pending sales for the corresponding week in 2019. Very good news!

Since bottoming during the week of March 22nd – 28th, new pending sales have continued to climb. This trend will positively impact forthcoming closed home sales. Pending sales typically take 30 – 45 days to result in a closed sale, so look for future home sales to rise accordingly.

Withdrawns

So while new listings, pendings and back on markets all showed encouraging signs last week, one metric did not. That is “withdrawns” — or homes removed from the market by the home seller.

Last week the number homes taken off the market surged to 84. This number is up 171 percent from the previous week, and is nearly 7 times that of the pre-coronavirus weekly average.

Fortunately, with the robust number of new listings that entered the market simultaneously, the overall impact of the surge in withdrawns is somewhat tempered.

Homes Sold

For the past three weeks I’ve been reporting on how the unprecedented low number of pending sales would result in an unprecedented number of homes sold. Well, that result is starting to show in our market.

Last week saw 67 homes sold. That number is down 20 percent from the previous week’s, and is off more than 44 percent where it was for the corresponding week last year.

Month-to-date home sales currently total 291. With four more business days remaining in the month, April’s number of homes sold will probably come in around 350. Compare that estimate to the 533 hoes sold in April 2019. If the 350 home sales estimate is accurate, April sales will be off by more than one-third, year-over-year.

It will be interesting to watch how current pending sales result in May sales.

Home Prices

Despite the relatively low number of sales, home prices remain stable, and even may be continuing to rise. Whereas March’s median sales price was $415,000, which set a record high, month-to-date April sales are showing a median sales price of approximately $425,000 at the moment.

Home buying demand still exists — as can be seen from the increasing number of new pending sales above. This increasing demand, in conjunction with relatively lower inventory at the moment, appears to be putting upward pricing pressure on the median sales price.

———

I will continue to track the data and update you on a weekly basis.

As always, thank you for reading the blog, and stay well.

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How is the coronavirus pandemic impacting the housing market? [Update for the week of April 12th – 18th]

Note: The following is a follow-up post to a post I published last week reporting on the impacts that the coronavirus pandemic is having on the Reno-Sparks housing market. See Is Reno’s Housing Market Slowing Down? [April 12, 2020]

As promised, I am tracking Reno-Sparks housing market data daily and then compiling it weekly in order to provide up-to-date market metrics on a weekly basis on this blog.

As I mentioned in last week’s post, relying on monthly market reports that focus on home sales and sales price does not necessarily provide a picture of the housing market’s current state. That is because home sales and sales price are lagging indicators — as these sales went into contract 30 – 60 days prior to closing.

Looking at current weekly leading indicators, such as new pending sales, provides a more timely picture – especially in this ever-changing environment. So, let’s begin with pending sales (under contract)…

Pending Sales

In a bit of positive news, new pending sales rose for the week of April 12 – April 18 — climbing 22.8 percent from the week prior. And though an increase in pending sales is welcome news, the 113 pending home sales for the week still remains well below, 25.7 percent below, where they were for the corresponding week in 2019. See table below.

Let’s hope pending sales continue to rise.

Withdrawn Listings

As we saw in last week’s blog post, the number of listings being taken off the market by home sellers spiked during the third week of March and has remained at weekly levels two- to three-times the pre-pandemic weekly average.


For the week of April 12 – April 18, total withdrawn listings (either temporarily or indefinitely) rose to 31 — up 29 percent from the preceding week.

Back on Market Homes

As we observed in last week’s blog post, the number of under contract transactions falling out of escrow also surged during the third week of March and has remained at weekly levels four-times the pre-pandemic weekly average.

For the week of April 12 – April 18, back on market homes pulled back to 32, representing a welcomed 15.8 percent decrease from the week before. However, the weekly total is still roughly three times the pre-pandemic average.

New Listings

It is the number of new listings hitting the market where we are seeing some of the most dramatic impacts of the pandemic.


91 new listings came to market the week of April 12 – April 18. This number was not only down 18 percent from the prior week, but also is down a staggering 54 percent from where we would expect them to be during a typical spring home buying market. See the chart below.


Homes Sold

Given the trends in the metrics above (especially the decline in pending sales), it should come as no surprise that home sales would eventually be impacted. The downturn in homes began to be observed during the first week of April.

The week of April 5 – April 11 saw the number of weekly home sales down 26 percent, year-over-year. The week of April 12 – April 18 saw the number of sales down 24 percent, year-over-year. And the rate of declining home sales appears to be accelerating.


I will continue to track the metrics on daily basis and report back here weekly. In the meantime, I welcome your comments and questions below.

As always, thank you for reading. And stay safe, healthy and happy!

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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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Is Reno’s Housing Market Slowing Down?

[Update 4/15/2020: Weekly “back on market” data has been added to the post.]

[Update 4/16/2020: Weekly unit sales data has been added to the post.]

“Is the Reno housing market slowing down?” That is a question I get asked daily in the midst of the current COVID-19 pandemic.

To answer the question let’s take a look at some recent trends.

Median Sales Price

Looking only at home prices, the answer would seem to be No. Last week I reported that the median sold home price for the Reno-Sparks’ market jumped nearly 6 percent in March — coming in at $415,000, and setting a new record high for home prices in Reno and Sparks, Nevada. [See March median sales price and other market metrics]

Certainly, there seems to be no slowdown in home sale prices. However, sales price is but one metric and does not tell the whole story.

Homes Sold

The number of homes sold is the most telling metric of the housing market’s strength and velocity. And looking at the number of homes sold in March we see that home sales were up an impressive 10.3 percent over February’s homes sold, and up 9.8 percent over March 2019. Not too shabby.

However, “home sales” is a lagging economic indicator. Keep in mind the majority of those homes sold in March went into contract in February, and some even in January — well before Nevada’s stay-at-home order went into effect.

That is why March’s home sales number exhibited little or no impact from the COVID-19 pandemic — and actually appeared quite healthy.

It would be April’s home sales that will exhibit an impact. And to get a picture of April sales, we can look at…

Pending Sales

Unlike homes sold, “pending sales” is a leading indicator of housing activity. So how are current pending sales looking?

With “social distancing” guidelines and Nevada’s stay-at-home order in place, home showings have been drastically negatively impacted (and, in some cases, have been prohibited altogether). And with no home showings happening, placing a home into contract becomes very difficult.

Let’s take a look at weekly pending home sales for the Reno-Sparks market over the post ten weeks.

As can be seen in the chart above, pending sales began trending downward in late February as news of the Novel Coronavirus pandemic become more prevalent in the media. Then the second week of March saw pending sales drop nearly 14 percent from the previous week as the Governor of Nevada declared a state of emergency and closed all schools. (See Emergency Order Timeline below).

By the fourth week of March pending sales were off 38 percent from their February highs — this coming after the Governor’s declarations: closing all non-essential businesses; suspending public meetings; and prohibiting gatherings of groups of ten or more. (Again, see Emergency Order Timeline below).

April has seen a slight uptick in pending sales — despite the stay-at-home order issued on April 1st — but don’t be mistaken in thinking that home sales are on the rebound.

Take a look at year-over-year weekly pending sales below.

In the chart above we can clearly see the dramatic effect the COVID-19 pandemic has had on pending sales.

Weekly pending sales this year were initially outpacing those of the corresponding weeks of 2019 — see the first three weeks of February. In the fourth week of February, however, pending sales for 2020 and 2019 were essentially equal.

March is where we see pending sales really begin to nosedive relative to where they were in 2019. The relative year-over-year differences can be seen in the table below.

As of last week, pending sales are off a staggering 46 percent year-over-year! This drop does not bode well for May and June closed sales.

Homes taken off the market

While many homeowners continue to list and attempt to sell their homes during these uncertain times, other have decided to take their homes off the market — either temporarily or indefinitely.

As can be seen in the chart above, the third week of March witnessed quite a spike in the number of homes being taken off the market temporarily as home owners likely wanted to assess the situation. Again, this spike coincided with the closure of all non-essential businesses and schools.

The chart above shows the number of weekly listings that have been withdrawn altogether from the MLS. Again we see an upward trend.

New Listings

The “temporarily off market” and withdrawn listings discussed above pertain to those homes that had already been listed. What about homeowners who had been planning to list during the typically busy spring season? To answer this, we take a look at weekly new listings compared to last year.

Again, the dramatic impact of the COVID-19 pandemic can clearly be observed in the chart above.

Prior to the Novel Coronavirus outbreak, 2020 was forecasted to be a record-breaking year for home sales. And things were looking good earlier this year. A look at the weeks of February and early March in the chart above shows weekly new listings clearly outpacing new listings from the prior year’s.

However as the effects of the COVID-19 pandemic began to unfold, the number of weekly new listings did an about-face and began to decline sharply in the third week of March.

In the table below, we can see that last week new listings were off nearly 45 percent from this time last year.

BOMKs (Back on Market)

Another metric not often reported on is that of “Back on Market”. Back on Market refers those homes that were pending sale, and in escrow to close, but for some reason failed to close, thereby causing the home seller to place the property back on the market.

Pending home sales can fail to close for many reasons — for example:

  • the property does not appraise at the purchase price (and buyer and seller are unable to come to an agreeable solution)
  • something insurmountable was revealed during inspections
  • a different property, on which the subject sale was contingent, failed to sell
  • buyer no longer qualifies for financing

Fortunately, pending transactions do not fall out of escrow often.

However, the coronavirus pandemic seems to changing the status quo. Below is a chart showing the weekly number of back-on-market listings (BOMKs) over the last ten weeks.

As can bee seen in the table above, in February BOMKs were average less than ten per week. The month of March began with an uptick. And then the third week of March saw a dramatic spike in BOMKs — with more than 40 BOMKs in one week. As observed with the other metrics above, this spike followed the declaration of the State of Emergency in Nevada, and subsequent emergency directives.

So what happened? Though I do not have direct evidence and data to provide specific reasons, anecdotally I have been hearing that many of these recent BOMKs are due to causes related to the coronavirus pandemic and the subsequent closing of many business. Some of these include:

  • Buyers losing their employment, and thusly, no longer qualifying for a mortgage
  • Buyers losing other sources of purchase funds (e.g. investment accounts no longer having sufficient funds to complete the purchase)
  • Mortgage brokers no longer possessing the ability to lend
  • Properties on which the subject sale was contingent failed to sell

BOMKs will be another metric I will continue to monitor and report.

Summary

To the question posed at the beginning of this blog post, Yes, the Reno-Sparks housing market is slowing down. As of last week (April 5th – 11th):

  • Pending sales are down 46.2 percent, year-over-year
  • New listings are down 44.8 percent, year-over-year
  • The number of home sales falling out of escrow is up four-fold
  • The number of homes being taken off the market is increasing weekly

Each of these items has the capability to decrease the number of forthcoming home sales. However, taken collectively, these factors will definitely depress the number of homes sold. How much so?

Taking a look at recent weekly home sales in the table below, we see that for the week of April 5th – 11th the number of homes sold is down more than 28% compared to the corresponding week a year ago. And keep in mind units sold are just beginning to see the effects of the coronavirus pandemic.

With aforementioned pending sales (a leading indicator) down 46 percent, one can expect subsequent home sales (30 – 60 days out) to be impacted accordingly.

March monthly sales came in at 506 homes sold — this number was up an impressive 9.5 percent, year-over-year. However, again, as mentioned at the top of this post, these homes were already in contract/escrow well before the impact of COVID-19 and the coronavirus pandemic. Given the data presented in this post, it is not inconceivable that our market could expect home sales for the month of April to be down as much as 25 percent, year-over-year. And if the trends above continue, May’s home sales could be depressed by as much as 50 percent.

Another question I get asked frequently is what will happen to home prices. Home prices are impacted by so many variables — buyer demand, seller motivation, available inventory, financing availability, future market expectations, buyer/seller fears/uncertainties, etc. — that predicting what home prices are going to do becomes guesswork — especially given the unchartered waters in which we now find ourselves.

That being said, I don’t believe that a decreasing number of homes sold, by itself, will necessarily cause home prices to drop. With already low inventory (both existing and new to market) trending downward, if Buyer demand is sufficient enough, then prices may remain relatively stable. But again, many factors will ultimately come into play. I will continue to monitor and report home sale price trends, as well.

In closing, presently there are no signs of the trends reported above reversing. I will continue to monitor the numbers and report to the readers of this blog.

In the meantime, stay well, thank you for reading, and please leave a comment below.


Governor of Nevada Emergency Order Timeline

See all COVID-19 Emergency Orders here


The housing data reported on above 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 – April 12-16, 2020. Note: This information is deemed reliable, but not guaranteed.

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March median sales price and other market metrics

Reno-Sparks median sales price up nearly 6% in March — sets new all-time high; March home sales up nearly 10 percent; Pending sales portend weak April and May

March’s median sold home price for Reno-Sparks jumped 5.9 percent for the month to come in at $415,000 — setting a new record high home price for the Reno and Sparks’ markets.

Year-over-year, March’s median closed sales price was up a whopping 12.5 percent.

March’s median sold price per square foot (PPSF) also rose — coming in at $221.57, or 4.1 percent over February’s $212.80/sq.ft.

Year-over-year, March’s median sold PPSF is up 6.6 percent.

Homes Sold

Home sales rose to 503 units sold in March — representing an impressive 10.3 percent increase over February’s 456 homes sold.

Year-over-year, March’s number of homes sold was up 9.8 percent over the 458 homes sold in March 2019.

Inventory

Currently 774 homes are available for purchase in the Reno-Sparks market. This number is up a whopping 31.9 percent over the 587 homes available for sale this time last month. Despite the monthly increase, current available inventory is down 10.7 percent, year-over-year.

Pending sales are dramatically down. Presently, 658 homes are pending sale in the Reno-Sparks market. That number is down a staggering 19.4 percent from the 816 homes pending sale this time last month. This large decrease is likely due to decreased home buying activity caused by the corona virus pandemic, and portends much fewer home sales for April and May.

Current pending sales are down 19.3 percent from the number of pending sales this time last year.

Days on Market and Days to Contract

March’s median days on market (DOM) came in 56 days — a substantial decrease of 23 days (more than three weeks) from February’s median DOM. Year-over-year, March’s DOM number is down 22 days from March 2019’s number.

March’s median days to contract (DTC) fell to 5 days — a substantial decrease of 11 days from February’s median 16 DTC. Year-over-year, March’s DTC number is down 13 days from March 2019’s number.

Expect both DOM and DTC numbers to increase as the effects of the stay-at-home guidelines impact the home buying process.

Sales by Type

March sales by type, break out as follows:

  • REO sales: 0.8% – down from February’s 0.9%
  • Short sales: 0% – down February’s 0.7%
  • Subject to Court Approval sales: 1.2% – down from February’s 1.6%
  • Relocation sales: 0.4% – unchanged from February’s 0.4%
  • Equity sales: 97.7% – up over February’s 96.4%

Sales by Price

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

Sales by Price Segment
sales price ($000’s) units sold % of sales cumulative % of sales
0 – 99 0 0.0% 0.0%
100 – 199 6 1.2% 1.2%
200 – 299 47 9.3% 10.5%
300 – 399 174 34.6% 45.1%
400 – 499 135 26.8% 72.0%
500 – 599 63 12.5% 84.5%
600 – 699 47 9.3% 93.8%
700 – 799 5 1.0% 94.8%
800 – 899 4 0.8% 95.6%
900 – 999 3 0.6% 96.2%
1M+ 19 3.8% 100%
total 503 100%

March’s median sold price for houses and condos combined was $389,000 — a 6.1 percent increase over February’s median sold price of $366,585 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
Mar 2020 503 $415,000 $221.57 56 774 658
Feb 2020 456 $391,975 $212.80 79 587 816
Jan 2020 391 $405,000 $216.01 88 621 712
Dec 2019 518 $393,500 $216.29 81 779 541
Nov 2019 455 $400,000 $216.54 72 956 683
Oct 2019 563 $399,999 $216.61 76 1,090 773
Sep 2019 579 $395,000 $218.24 68 1,283 814
Aug 2019 623 $399,000 $213.78 64 1,342 898
Jul 2019 606 $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

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


1. The “Past 13 Months of Home Sales Data” 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 – April 7, 2020. Note: This information is deemed reliable, but not guaranteed.

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

Click here to see Reno Homes for Sale.

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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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This week’s real estate headlines

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

Posted in headlines, News | Tagged , | Leave a comment

RSAR Market Reports for Reno, Sparks, and Fernley, Nevada – February 2020

The Reno/Sparks Association of REALTORS® (RSAR) has released February’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 Market Report

Sparks Market Report

Fernley Market Report

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