Reno-Sparks median price hits record $415K in March, but how long will it last?
RENO — Since the Great Recession, the real estate market in Northern Nevada has grown strong and steady. Thanks to a booming economy and swelling population, housing prices and demand have surged across greater Reno-Sparks over the last decade.
As the first quarter of 2020 wound to a close, however, the COVID-19 pandemic had shut down the state’s non-essential businesses, left many area residents jobless, and forced Nevadans to stay quarantined at home.
In other words, like nearly every sector of the Silver State’s economy, the COVID-19 crisis could threaten to put the housing market on shaky ground.
The size of the impacts and when they’ll emerge, however, is yet to be determined, according to real estate industry leaders who spoke with the NNBW.
Erika Lamb, president of the Reno/Sparks Association of Realtors, said the “market is holding steady” despite the pandemic.
“Even though the coronavirus is here, there are still properties that are selling,” Lamb said. “We’re still filling houses. More than ever, people want to get into their own house. If they are quarantined, they want to be quarantined in a place they want to be.”
According to an April 8 report from RSAR, the greater Reno-Sparks region (which includes North Valleys and Spanish Springs) had 502 sales of existing single-family homes in March — a 10% increase from February and nearly a 10% jump from March 2019.
The median sales price for an existing single-family home in March was $415,000, which was not only a 12.5% increase from last year, but also a record-high, Lamb said.
“Inventory may eventually be reduced as some sellers choose to wait until a time when they feel more comfortable with relocating,” Lamb told the NNBW. “We’ve not seen any indication of prices coming down, just the opposite. It could be due to low inventory.”
Breaking it down by region, when looking only at Reno (which includes sales in the North Valleys), the median price in March was $430,000 — a 6 percent increase from February ($405,373) and a 10 percent increase from March 2019.
In Sparks (including Spanish Springs), the median home price was $389,000, an increase of 11 percent from last year and up 5 percent from the previous month.
Also, Fernley posted a median price of $278,000, up 7 percent from March 2019 and up 1 percent from February 2020.
Nancy Fennell, CEO of Dickson Realty, said they have seen “a few” sellers remove their listings, but “not many.”
Over the last few weeks, though, Fennell said she’s been dealing with more and more current and future homeowners worried about selling and buying their homes during this uncertain time.
“We are being asked frequently, ‘Should we put our home on the market as we planned to?’” Fennell said. “Our answer to that is they have to evaluate their circumstances, their health and their needs.
“I do believe as the numbers spike more cases in Washoe County, we will see more sellers and more buyers taking a break. Some buyers are seeing this as an opportunity to reset their offers.”
In the greater Carson City-Sierra region, 46% of buyers who were looking to purchase before the crisis are still actively searching for homes, according to a recent survey of 55 Realtors conducted by Sierra Nevada Realtors.
SNAR says another 46% have paused their home search, with plans to start again when the crisis is over. Meanwhile, 8% have decided not to buy at all.
Zooming out, the national housing market is beginning to see the impact of the COVID-19 pandemic.
According to a new report from Realtor.com, in the weeks ending March 21 and March 28, the number of newly listed properties fell by 13% and 34%, respectively, when compared with the same period a year ago.
The decline may indicate home sellers are holding off on listing their properties right now.
In the report, Danielle Hale, a chief economist with Realtor.com, said: “Our inventory and listing data can provide some early insight into how housing markets may be impacted by COVID-19, but the situation and reactions to it are still rapidly evolving.”
The most significant impact of the pandemic so far across greater Reno-Sparks, Lamb said, is the change in how real estate business is being done.
After all, with Nevadans quarantined until at least May and coronavirus cases continuing to rise, Realtors and agents are relying on technology more than ever to serve clients, offering virtual tours and live-streaming open houses.
As of April 8, Lamb noted there are 457 active listings in the Reno-Sparks area providing virtual tours to potential buyers. She added that RSAR is encouraging more Realtors to do virtual tours versus in-person appointments.
“A buyer can pretty much purchase a home today without ever leaving their living room,” said Lamb, noting that all Realtors are following the Centers for Disease Control and Prevention’s guidelines if showings are done in person. “RSAR also just placed an order for face masks that we will distribute to our members to use in the event of in-person showings, and booties and gloves and masks are being provided for buyers when entering a house.”
IMPACT ON OFFICE PROPERTIES
For Melissa Molyneaux, senior vice president with Colliers International, who works exclusively on office properties, the inability to meet in person amid the pandemic is “making deals difficult.”
“Mostly,” she continued, “it’s from the inability to tour spaces and deploy resources — contractors, architects, designers, furniture, etc. — that are not possible virtually.”
Molyneaux noted that most deals “in process and far enough along” are still in motion. Moreover, she has not had any sellers pull their properties.
However, she expects the market to start stalling in the coming months.
“I anticipate the true slow-down will be felt in May and June as the velocity of new deals catches up to us,” she said. “I think the hardest part is that until we know when workers can return to offices, firms may be hesitant to relocate or expand.”
In terms of pricing, Molyneaux believes tenants will have the “upper hand” in negotiations, either through favorable rent, concessions or tenant improvement allowance until “the world returns to business as usual.”
The impact on inventory, she said, is harder to predict.
“I would imagine that as all firms evaluate how to save costs, the layout of square footage of their office space will be taken into consideration,” she said. “But, at this point, I think most are hoping that they can return to their offices once things return to normal.”