Reno, Nevada Housing Market Update February 28, 2023: Weather Causes Tight Inventory and Decrease in Median Home Price in February 2023

Median Sales Price. The median sales price for a single-family home in Reno is $535,000 – week over week, that is down only 1.8% from the numbers we saw in 2022. By this time last year, we had begun to see the prices around the area steadily increase. So, why are we only down 1.8%? Because, currently, there just aren’t that many homes for sale. Few people are listing their properties and thus creating a very tight Reno marketplace. And why aren’t folks listing? To put it simply, the snow. Even now, as we sit here looking at this week’s data, local schools are closed due to inclement weather. There’s just too much ice and snow on the ground and sellers want to wait for it to melt before putting their homes on the market. We were hoping for a good wave of inventory at the start of March, as there is a surplus of enthusiastic buyers out and about, more than willing to brave the cold temps to view properties. This tight market all comes down to sellers – and they’re missing out on a huge opportunity. If you or someone you know are thinking about selling, consider this: from a competitive standpoint, there is very little out there to steal potential buyer attention. If you list your home, eager buyers who are ready and waiting for homes to come up for sale will go look at it. But make no mistake, offer behavior is not like last year and we’ll get to that shortly.
New Listings. We recently experienced a bit of an uptick with 62 newly listed homes, likely due to the prior two week break in the weather. That’s still down 16.2% week over week, and overall, this is the lowest amount of new inventory that we’ve had in a year. Numbers have basically flatlined since late November and that’s been a strain on today’s buyers. The uptick was a small relief, and further proof of just how weather dependent this market is as of late. 
Homes Under Contract. We are seeing a continual increase in pending sales and that's where we're really getting this situation. Very few homes are selling, the existing inventory is getting absorbed. The data shows a sharp turn down around February 11, leading us to believe we may have hit our breaking point of absorbing that inventory. And it all comes down to those new listings as there’s no new inventory to replace the absorbed inventory – making this a major housing shortage. Again, don’t make an assumption that this shortage will see the same crazy offers we saw last year. Money is too expensive right now. We were hoping for a long-term strategy of 6.5% mortgage interest rates, but inflation has not been dropping at the desired rate and we just had another quarter percent increase. That discrepancy puts pressure on the mortgage market, and although that affects how much buyers can offer, remember this: they may be limited by the constraints of their money, BUT they are still offering and working hard to reach agreements with sellers. 
Percentage of Asking Price. Buyers are negotiating and this week homes have been selling for an average of 97.6% of asking price. What does 97.6% mean? It means if you are planning to sell your home in Reno, you should plan on being within 2.5% of your marketing price – and by that, I mean the correct marketing price. If you started too high, you may have to still reduce your price. But once you get to the number buyers are agreeable with, you can expect to negotiate within that 2.5% margin – as a general understanding of how buyers are behaving in the marketplace. So, again, if you’re going to sell your home, there’s no better time than the present due to low competition. But also understand, it doesn’t mean you are going to receive 47 offers or $50,000 over asking price. Those days are gone. So be prepared to negotiate items such as closing cost credit and be prepared to go back and forth with counter offers on your marketing price (very normal). 
Inventory. This is really the big one. Inventory overlaps everything stated above. Inventory is being absorbed so quickly and right now we are looking at around 8.5 weeks. This time last year we saw it get as low as four weeks, and that was around the peak. We are not there yet, but what we do have is minimal. Anytime you get below the ten-week mark, we’re feeling a big pinch. Our team has been working with a number of buyers with nothing else for them to see. If you are a buyer out there right now, the advice we are giving our clients is this: bump up your price, get in front of the seller, go take a look at their house, put pen to paper, and present offers to them – if their house has been on the market for a while with no takers, you may be able to reach an agreement with them before they reduce their price. 
Days on Market. Inventory is getting quickly absorbed and not being replaced, and that's why we're beginning to see days on market start to go back down. The numbers were really high there for a while, largely in part to homes being overpriced. But buyers quickly jumped back in and started buying again. After some time spent waiting, they realized the snow was taking too long to melt. Unlike local sellers, they’re done holding out for better weather. Now we are back under the 30-day mark. 30 days on market is pretty typical, and we are now on a very sharp decline from the higher numbers we saw in late 2022/early 2023. Properties are back to selling in a timely fashion. 
Unsold Listings. Recently we’ve seen a continual downward decline. Properties are not being withdrawn or expiring – they’re selling. Again, if you’re out there as a buyer, if possible, it’s highly recommended that you stop looking tight on a set number and bump up your purchase price range. These sellers aren’t market testers – they want and/or need to sell. If their properties have been sitting, they may have accidentally priced their home wrong and are getting ready to reduce. That’s the mindset you need to be in. Get that offer out to them and you might find the right home in this snow. 
In summary, the Reno market is experiencing a huge tightening in inventory, mainly because of ice and snow. There are very few homes to look at and area homebuyers are anxiously waiting for sellers to list their properties. As often mentioned over the course of the past few weeks, this does not mean we are back to a market of wild, over-ask offers. Money is more expensive than it was this time last year, and both buyers and sellers should expect a fair amount of negotiation to reach a reasonable agreement and secure a deal. 

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