Impacts of Coronavirus on the Nevada County Market

It’s been almost two months since a National Emergency was declared because of the Coronavirus pandemic and the effects are being seen nationwide. Most Americans have been under some sort of stay-at-home guideline for 6+ weeks and weekly unemployment numbers continue to be the worst we’ve seen since the Great Depression.

Real estate markets can be extremely difficult to track. For the Nevada County market I typically track monthly statistics, concentrating on volume, prices, marketing times, and supply-and-demand. Shortly into the pandemic, I began to realize change was happening on a daily, if not hourly basis, and I was going to need to rethink my analysis. I settled on focusing on a few factors on a bi-monthly basis; from the first to the fifteenth of the month and from the fifteenth of the month to the end of the month.. I also realized because the market in Nevada County changes so drastically throughout the seasons, it would be best to analyze the current time period within years past. Lets take a look at a few different categories and how Coronavirus has impacted 2020.

New Listings

New listings have decreased dramatically. A National Emergency was declared on March 13 and the California stay-at-home order was issued on March 19. Sellers began to be impacted immediately as new listings went down down 54% from March 16 - April 30 comparing 2020 to 2019. Prices of these new listings have stayed stable throughout the pandemic and are slightly up (2.1) vs 2019. Would you list your home during a pandemic?

Pending Sales

Pending sales also saw a dramatic decline at the beginning of the pandemic. From March 16 - April 15, pending sales were drastically lower than the same time periods in 2019. From April 16-30, buyers appear to have gotten a little more comfortable making offers during the pandemic. Overall, from March 16 - April 30, pending sales were down 31%. Prices of these pending sales appear to be slightly lower (-5%) than prices in 2019. Would you purchase a home during a pandemic?

Listings Taken Off Market

Listings that were taken off the market immediately spiked from March 16 - 31 and were up 228% vs 2019. Gradually there have been fewer new listings and fewer listings taken off the market. From March 16 - April 30, listings taken off the market were up 57% vs what they were in 2019.

Closed Sales

New listings are down, pending sales are down, listings taken off the market are up … we are starting to see a trend. Closed sales were actually up at the beginning of the pandemic. This could be a sign that Nevada County was on schedule to have a much larger volume in 2020 or it could have been a rush to close as many sales before the pandemic started to affect things. The volume of quickly closed sales dramatically decreased. From March 16-April 30 closed sales were down 15% vs 2019. Prices continue to be strong with the average sale price up 6.8% in 2020 vs 2019.

Conclusions

Comparing the current pandemic period (March 16 - April 30) vs 2019, new listings are down 54%, pending sales are down 31%, listings taken off the market are up 57%, and closed sales are down 15%. The pandemic is having a major effect on real estate in Nevada County. Prices really haven’t been affected … yet. Prices are a reflection of supply and demand. The supply of houses available are down, but so is demand. Prices will only be affected if the supply dramatically increases over demand.

Other Thoughts

Mortgage Forbearance is when a mortgage servicer allows you to suspend your mortgage payment for a limited period of time. The overall share of home loans in forbearance rose to 7.54% in the last week of April according to this Housing Wire article.

Unemployment continues to rise. In Nevada County, unemployment rose to 4.6% in March. I’d expect April to be dramatically higher.

The front page of the NY Times on Sat May 9th says it all. It compared the change in jobs since the end of World War II.