Reno, Nevada Housing Market Update February 21, 2023
Posted by Paul Dunham on Tuesday, February 21, 2023 at 4:36 PM
By Paul Dunham / February 21, 2023
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Reno Houses. The median sales price for a single-family home in Reno is currently $491,000 – a 14.6% decrease from this time last year. If you’ve been paying attention to the weekly trends, you’ll have noticed a downward dip, which could mean a number of things – for example, perhaps a lot of higher priced houses aren’t selling. The Reno area sees higher price points on homes and that could be why a lot of that inventory hasn’t moved in comparison to other areas. Therefore, week over week, it’s making the overall prices go down. We are expecting to see a continued decline as the height of the 2022 market happened in early spring, with prices peaking in mid-April. The overall Covid market increased about 43% from the pre-Covid market – so it’s possible we still have a way to go.
New Listings. There have not been new listings hitting the market in the Reno area. That's a big deal and really concerning for today's buyers, because they've seen all the inventory that there is to see. Normally we see a small spike of new listings hitting the market around the new year, but this year there has been no increase in new inventory, consistently sustaining around 37 homes per week. For a city this size, 37 homes is not very many. There are a lot of active buyers looking in Reno and this low inventory is very much affecting their ability to buy a home.
Homes Under Contract. What's interesting as we are looking at week over week data is the steady incline in the number of homes being bought since the new year. That begs the question, how do we have a huge spike in “pendings” when new inventory is flatlining? Sellers are adjusting their prices to attract buyers and existing inventory is getting grabbed up. The current inventory is not being supplemented by fresh listings so naturally we see the availability of homes tighten up. What does that mean for sellers? It means they should consider putting their home on the market before the ice. More people are out looking when the weather is more conducive and the roads and sidewalks are dry. Herein lies the opportunity to showcase your property with little competition. Buyers are buying, regardless of how much snow is in the front yard.
Percentage of Asking Price. Something for sellers to keep in mind as they enter the market is to expect negotiation. The percentage of asking price is hovering around 97% and we are seeing multiple offers in the marketplace. Our own team has been busy recently writing offers on several homes that have received multiple offers. But keep in mind that this is not like last year when we experienced appraisal waivers and offers going tens of thousands over asking price. Because of the lack of inventory there are multiple buyers interested in one home, and generally all of them are negotiating. Sometimes they wish to negotiate closing costs, other times it's purchase price, and on occasion it's a contingent offer where they must sell their current home to buy another. A great strategy/mindset is to be prepared for the back-and-forth nature of counter offers, finding a middle ground – something normal and expected in a more traditional marketplace.
Weeks of Inventory. Weeks of inventory in Reno is currently averaging around 12.3 weeks, which comes as no surprise as we have seen a spike in pending properties. As the number of pending properties increases, and without new listings hitting the market, it stands to reason that the weeks are going to start dropping. Reno tends to be more volatile than other regional markets and has been bouncing back and forth, anywhere between 11 and 14 weeks. For that reason alone, Reno is still deemed a seller’s market, but remember, it’s nothing like what we saw during the peak craziness as the present cost of money will not allow for it.
Median Days on Market. Looking at the most recent data, Reno is sitting at an average of 59 days on market. What this number really reflects is existing inventory getting absorbed. There are of course little ups and downs, but it is not on the downward trend. What this tells us is that it likely took sellers a bit longer than planned to find the top dollar that buyers were willing to pay. In a declining market it is not uncommon to see price adjustments along with the increased days on market.
Unsold Listings. Right now, the majority of sellers in the Reno marketplace are serious sellers. How can one tell if sellers are serious? Through research and analysis on which properties have been sitting on the market. Right now, there are very few. Market testers tend to just pull their property off the market if they aren’t getting their price. They’re not changing their marketing strategy. They’re letting their properties expire. Of course, every market has market testing sellers, that is unlikely to change. But on a scale, we’re on a continual decline of houses not selling. Prospective buyers should understand that, in general, sellers are on the serious side – they want to sell, they want to reach a deal. Buyers should feel confident when writing offers and be ready for some negotiation. Savvy buyers may even be able to write an offer before they do their price reduction and work on a top dollar strategy and get it sooner. Pro tip: consider looking around at homes a little above your price range and try to make a reasonable offer on a home that has been sitting. If the buyers are serious, they may be moments away from a price reduction. If that’s the case, they’re probably inclined to give your offer some very serious consideration. It’s a great, often winning, strategy in a market where there are less and less homes to choose from.
In summary, Reno is still seeing prices on single-family homes decline relative to last year. There is a huge lack of new listings coming up for sale and the median days on market has increased, but the number of expired and withdrawn homes are on the decline, leaving only the more serious sellers on the market. There are a lot of active buyers out and about and very little inventory – leading to sellers to receive multiple offers on their houses. However, with the current cost of money being what it is, both buyers and sellers should continue to expect some negotiation before going under contract.
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