May, 2020 provided the first opportunity to comprehensively evaluate the impact COVID-19 is having on the Reno-Tahoe real estate market. After years of solid, consistent growth, shelter-in-place orders have had an immediate impact on the local economy and housing market. Previously months have reflected conditions prior to quarantine when deals were consummated even if closing occurred within current conditions.
Understandably, transaction volume has taken a meaningful fall, dropping by 40% year-over-year. However, pricing has remained remarkably stable with median price rising 4.4% year-over-year and remaining fundamentally even with recent months. This reflects a dramatic change from the last economic downturn during which excessive leverage resulted in panic selling and sent values into free fall. The constrains on showing real estate, particularly tenant occupied properties for which a complete prohibition remains in place, have inevitably stymied new transactions. The lack of distress is a refreshing validation of just how fundamentally strong the local job market has become. These are not only strong indicators of the present state of local real estate but beacons of optimism for a healthy recovery.
With urban communities hardest hit by the virus and stay-at-home restrictions, many are considering moves to less dense regions where cost of living may be lower and quality of life much higher. Reno has been benefitting from an outflow from San Francisco Bay Area communities for some time. The current situation may accelerate this trend, particular as remote gains widespread acceptance.
The resilience of this community can be seen far beyond real estate sales. Businesses and citizens alike have rallied to support those in need. These funds have been established to help those whose employment has been curtailed as well as small businesses in need of support to make it through this challenging time. Notably, several groups have coordinated efforts to locate and purchase protective equipment for our frontline health care providers. Stories of private companies donating their goods and services to the greater good abound throughout the region.
Stay safe and well.