Market Trends 3rd Quarter 2020 Market Report for the Reno/Sparks Region
For more information about the real estate market, or to search for homes, visit DicksonRealty.com.
Rď?Ľď?Žď?Ż/Sď?°ď?Ąď?˛ď?Ťď?łÂRď?Ľď?§ď?Šď?Żď?Žď?Ąď?ŹÂPď?˛ď?Šď?Łď?ĽÂMď?Ąď?° Reno/Sparks Regional Price Map 3rd Quarter 2020, as of October 13, 2020 3rd Quarter 2020, as of October 1, 2020 (Data source: NNRMLS)
Median Sales $$ Median Sales $$ Year to year change +7.91% Year to year change +2.86% Average Price/SF Average Price/SF
Median Sales $$ Median Sales $$ Year to year change +8.49 Year to year change +7.56%
Median Sales $$ Median Sales $$ Year to year change +8.98 Year to year change +8.04% Average Price/SF Average Price/SF
Median Sales $$ Year to year change Â Â?Â?
Median Sales $$ Year to year change Â?Â? Â Â?
Median Sales $$ Median Sales $$ Year to year change +7.35 Year to year change -24.46% Average Price/SF Average Price/SF
Median Sales $$ Median Sales $$ Year to year change +4.85 Year to year change +37.57% Average Price/SF
Median Sales $$ Median Sales $$ Year to year change +0.44 Year to year change Â?Â? Â?Â?
Median Sales $$ Year to year change +3.72%
Median Sales $$ Year to year change -
Median Sales $$ Median Sales $$ Year to year change +6.45 Year to year change Â?Â? Average Price/SF
Reno/Sparks Market Overview Cooler autumn temperatures are in the air and thoughts of the holidays are right around the corner. The real estate market in our region however, is not cooling down and continues to be at the forefront of many conversations, with record low inventory, median prices exceeding expectations and fast market times. Below is a summary of the recent trends. There were 425 homes active on the market and available for purchase (not in contract or escrow) at the end of September, which was an 8% decrease from August and a staggering 67% decrease from September 2019. Our market has had a steady decline in inventory since April, which is contributing to higher prices and hurting affordability. Fortunately, mortgage rates are remaining at near all time lows, which brings some relief to buyers. Reno/Sparks area REALTORS sold 681 single family homes in September, which was a 4% increase from August, and a 17% increase from last year at this time. The median sold price for single family homes in Reno/Sparks was $440,000 in September which represents a very small 1% decrease from August. The better measure is year-over-year, and here the regional median price is up by 11%. “Median” means “in the middle”, so half of homes sold for less and half sold for more. The Average Days on Market decreased again from 75 days in August to 71 days in September. Days on Market has decreased every month since January 2020. Last year at this time, the days on market was 15 days higher, at 86 days. We are in a very fast paced market, so it is more important than ever to be pre-qualified with a lender before looking at homes to buy, and to have an expert assist you with navigating the negotiations when making a home purchase If you have any questions about this report or would like to take a deeper look into the market conditions of your neighborhood, please reach out. It would be a pleasure to assist you. Data Source: Northern Nevada Regional Multiple Listing Service (NNRMLS), all Reno/Sparks areas (area 100).
University of Nevada Reno Dean Talks About Why Arts Education Matters
Chris Galli, the Vice President of Relocation at Dickson Realty and Broker/Manager in our Downtown Reno office, recently became a member of the University of Nevada, Reno College of Liberal Arts board, and the experience has been quite an educational one. As a board member, he has an up-close view of how the college and university are adapting to changes brought by the global pandemic. He sat down with Debra Moddelmog, the college’s dean, to discuss the challenges that 2020 poses and a path forward for liberal arts education. Here’s a snapshot of their conversation:
Can you talk about what educating students in a constant state of ambiguity looks like at the University of Nevada, Reno, from your perspective? We’ve had centuries to think about how to build a functioning, effective university. Most of us who have built our careers as instructors or faculty have had a long time to think about how to teach effectively and reach all of our students. We’re kind of having to reinvent a lot of that right now and in a very short time. I think there are some growing pains on both sides, but we are also developing new and creative ways to teach, which will likely affect what higher education looks like long after this pandemic is under control.
What are the different ways that classes are being taught? We cover subjects in the arts, humanities, and social sciences, so we have a range of ways in which we are teaching classes during this challenging time. The University of Nevada, Reno offers five modes of delivery, and Liberal Arts classes are being taught in all five modes. One is online, but that’s not the majority of our classes. Those are the classes traditionally taught online, so these courses were designed for the online environment. The second mode is called Alternative Remote. It’s not a fully online class because it hasn’t been designed specifically for the online environment, but it uses online tools to connect with students. We teach quite a few classes using this mode (everyone has become an expert at Zooming!). The third is Alternative HyFlex, where half of the students are in class in the actual physical classroom, and then half are on Zoom, and they can then switch places. I’ve talked to some students about their experience with this mode, and they’ve generally been positive since they feel that this form of delivery provides more of a community. It’s not the same as being in person all the time, but they feel like it gives them more opportunity to form a community of learners than an all-remote class can. We also have some classes that are taught in mixed-mode, where students are learning online, but they come in for an in-person lab or to do something that they can’t do online. Finally, we have a few fully in-person classes for subjects that require that level of interaction, especially in the arts—for example, beginning dance classes—or our anthropology classes with labs.
How do you teach visual and performing arts in a time like this? This is a very critical time for the arts. It’s not just at the University of Nevada, Reno—it’s everywhere. There’s a legitimate fear that we will lose artists and venues, and that it will be tough for the arts to come back in the way that we’re used to them. There’s a cascading effect of the impact of the loss of the arts on the local community and the national and global community. What’s unique about the University of Nevada, Reno’s teachers and professors is that they’re not only artists, musicians, actors, dancers, and directors themselves, but they also train the next generation of musicians, artists, performers, and actors. Everybody is trying to think creatively about how we do the arts differently in a time when we can’t be in intimate spaces or assemble large audiences. We will have our very popular performing arts series this year, but we’re going to have it virtually rather than in person. We’re trying to figure out how we stay creative at this time and contribute to maintaining a local arts and culture scene since the arts not only entertain but also give us meaning and understanding, including in regard to our current changes and challenges. So, we’re seeing our faculty and students do some very creative things right now, for example staging performances outdoors and transforming our annual fall dance festival into a digital format.
What’s the best way to support the University of Nevada, Reno’s College of Liberal Arts and its students, faculty, and staff through this challenging time? We started a fundraising campaign called Arts Forward to build up some funding to do arts differently and provide scholarships or other support for students who may be struggling to stay in school. Donors’ support is more important than ever right now because the University of Nevada, Reno has had its budget cut and it’s a way for us to maintain programming and student support. We’ve lost $800,000 The School of the Arts Church Fine in ticket revenue for this year. These losses will restrict scholarship funding, Arts Building at the University of likely reduce the number of students in our arts programs, and limit opportunities Nevada, Reno. for students and faculty to hone their craft and build their reputation through participation in masterclasses, performances, and exhibitions. The donations from our Arts Forward campaign will fund student scholarships, enhance virtual programming, and expand access to the arts.
What would you say to someone who says, “Oh, who cares if people dance ballet? We have a global pandemic to cure!”
David R. Harper’s “My Own Personal Ghost” is on exhibit at The Lilley Museum of Art at the University of Nevada, Reno through December 19, 2020
That perspective undervalues the research that we do and the contribution of the arts, humanities, and social sciences to our society. In our college, faculty are exploring vital subjects such as the effects of the pandemic on human behavior, how to address social and racial injustices, how to cope with water scarcity in the West, and the ethics of genetic modification. We need people who think creatively and are problem solvers. Our faculty not only excel at teaching these habits of mind but they exhibit them in the research they do and their work with our communities. To learn more about the University of Nevada, Reno’s College of Liberal Arts, visit unr.edu/ liberal-arts. For more information and to donate to Arts Forward, visit unr.scalefunder.com/cfund/project/21822.
Debra Moddelmog, Dean of the College of Liberal Arts at the University of Nevada, Reno
Chris Galli, Dickson Realty Vice President of Relocation and Broker/Manager, Downtown office
Keys to Tax Deferred Exchanging The tax deferred exchange of your property completed pursuant to Internal Revenue Code Section 1031 doesn’t have to be difficult. However, when dealing with the transfer of multiple properties and their associated transactional logistics, understanding the 1031 process and having access to a trusted exchanging expert represents the best strategy for a painless and successful exchange. To be sure, there are a few key ‘rules of the road’ and some select pitfalls which experienced Exchangers always avoid. What are they? THE PROPERTIES YOU EXPECT TO EXCHANGE MUST BE LIKE-KIND The Internal Revenue Service requires that the property you sell, as well as the property you buy must be like-kind. And, like kind means one of two things. Either property held for investment, or property held for income. And definitely not your personal residence. YOU MUST UTILIZE THE SERVICES OF A QUALIFIED INTERMEDIARY The IRS requires that your exchange be completed with the assistance of a Qualified Intermediary or Facilitator. Also, this should be a well-established firm like FYNTEX, so you know your exchange documentation will be correct and that your exchange funds will be safe between the time you buy and the time you sell. Dickson Realty has partnered with FYNTEX as a trusted intermediary and as a resource to our agents and clients. YOU HAVE A TOTAL OF 180 DAYS TO COMPLETE YOUR EXCHANGE You must complete your sale and purchase within a total of 180 days or whenever your tax return is due. The tax return qualifier means that if you start your exchange late in the year, you might have to file for an extension in order to receive your full 180 days. YOU MUST IDENTIFY CANDIDATE REPLACEMENT PROPERTIES WITHIN THE FIRST 45 DAYS While you have a total of 180 days to complete your exchange, and the IRS requires that you identify some candidate or target Replacement Properties within the first 45 days of your exchange period. Usually this identification is made to your Qualified Intermediary by completing a form which is kept in your exchange file. THERE ARE DIFFERENT TYPES OF EXCHANGES, DEPENDING UPON YOUR CIRCUMSTANCES While a majority of tax deferred exchanges are delayed or deferred exchanges, there are other types of exchanges which may better suit your situation. For instance, if your circumstances require that you must buy before you sell, you should consider a reverse exchange. Likewise, if your Replacement Property needs some improvement or full on construction to meet your need, you can complete an improvement or construction exchange. And lastly, if your construction exchange must exceed the 180 day Safe Harbor timing requirement, you should inquire about a Non Safe Harbor exchange. And a quick caveat, if you are considering something other than a deferred exchange, only use an experienced Facilitator like FYNTEX. THERE ARE SPECIFIC RULES FOR IDENTIFYING THE PROPERTY YOU EXPECT TO ACQUIRE The IRS requires the use of two rules or one exception for identifying potential Replacement Properties. The first is the three property rule, meaning you may identify up to three properties of any value. The second rule is the two hundred percent rule, meaning you may identify more than three properties provided all the properties you identify do not exceed two hundred percent of the value of the property you sold. And the one exception is known as the ninety-five percent exception. Essentially, you may identify more than three properties and more than two hundred percent of total identified property value, provided you acquire at least ninety-five percent of everything you identified.
THERE ARE THREE THINGS YOU MUST DO TO HAVE A 100% TAX DEFERRED EXCHANGE If you want a completely tax deferred transaction you must do these three things. First, buy Replacement Property which is equal or greater than the net selling price of what you sold. Two, move all your equity from the old property into the new property. And three, replace your debt. AVOID THESE TWO CRITICAL 1031 PITFALLS What are the two biggest 1031 pitfalls which experienced Exchangers always avoid? Here they are. First, make sure your exchange funds are safe. The tax deferred exchange industry is largely unregulated. This means that when your exchange proceeds are on deposit with your Qualified Intermediary, your exchange funds technically belong to them. That is why you should always insist upon a well established QI like FYNTEX and a Qualified Escrow Account for your hard-earned exchange funds. It is the only way to ensure that your funds will always be safe. Bonding doesnâ&#x20AC;&#x2122;t do that, nor does deposit insurance. FYNTEX uses QEAs for every exchange, and the cost of the trust account is included in your exchange fee. Second pitfall? Start looking for Replacement Property as soon as possible. Your 45-day identification period moves very quickly so you may want to start looking for property even before your old property has closed. BUY REPLACEMENT PROPERTY AS THE SAME ENTITY IN WHICH YOU SOLD It is always better if you buy and vest your Replacement Property in the same name and entity as which you sold your Relinquished Property. To do otherwise by changing entities in the middle of your exchange could cause your exchange to fail for lack of meeting the held for investment or held for income requirement of IRC Section 1031. STILL WITHIN YOUR 45-DAY IDENTIFICATION PERIOD? YOU CAN REVOKE A PREVIOUS IDENTIFICATION AND RE-IDENTIFY NEW REPLACEMENT PROPERTY If you are still within your 45-day identification period, it is possible to revoke a previous identification and re-identify new Replacement Property in your exchange. Simply complete your new identification and add revocation language at the top of your form. GETTING ACCESS TO TAX FREE CASH CAN BE TRICKY ... If you need access to tax-free cash, borrow against your Relinquished Property well in advance of your 1031 exchange or borrow against your new Replacement Property after youâ&#x20AC;&#x2122;ve successfully acquired and closed it. This is possible because borrowing does not necessarily trigger a taxable event. However, if you attempt to borrow too closely to the start of your exchange, an argument could be created that your borrowing effort was a part of a stepped transaction and therefore not eligible for deferred gain treatment under IRC Section 1031. WHEN REPLACEMENT PROPERTIES ARE DIFFICULT TO IDENTIFY, CONSIDER A DST In active markets where it is difficult to locate and identify Replacement Property, it might be helpful to consider identifying an institutional Delaware Statutory Trust investment as your Replacement Property backup strategy. These are typically larger, professionally managed investment grade portfolios which include individual property interests which are available to accredited investors through Broker-Dealers. If you have an interest in exploring what properties are available currently, contact us. We can give you the names of some Broker-Dealers who can answer your DST questions. DISCLAIMER: To ensure compliance with requirements imposed by the IRS, we inform you that the information presented here as well as on our website does not contain anything that is intended as legal or tax advice, and that nothing herein can be relied upon as legal or tax advice. Further, the IRS wants us to let you know that nothing herein can be used for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any tax-related matter addressed herein. If assisting with your Section 1031 tax-deferred exchange, Fyntex cannot advise the owner concerning specific tax consequences or the advisability of a tax-deferred exchange for tax purposes. We recommend that anyone contemplating an exchange seek the advice of an accountant and/or attorney.
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