Sparks, Nevada Housing Market Update March 4, 2023: New Construction is Providing Hope for Buyers Despite Decline in Inventory and Increased Interest Rate

Sparks, Nevada Housing Market Update March 4, 2023

Welcome, everyone to the Sparks, Nevada Housing Market Report for March 4, 2023. Like the rest of Northern Nevada, the available inventory in the Sparks housing market is on a continual decline, but new construction is giving local buyers some hope. 

Let’s dive in. 

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Sparks, Nevada Houses

The median sales price for a single-family home in Sparks is $550,000 – up 4.3% from this time last year. Just as we’re seeing in Reno, prices have been on an incline. For some time, folks expected there would be a freefall in prices, but we’re questioning that now. 

Interest Rates

Interest rates have increased once again, recently reaching the 7% mark. In a free market situation, mortgage rate increases traditionally push down housing prices, but that’s not what we’re seeing. They haven’t tapped the rate. But sellers in the Sparks, Nevada marketplace have proven to be serious sellers. They understand the circumstances and the cost of money and they’re willing to negotiate with buyers to reach an agreement. So, if current prices and interest rates aren’t the driving force behind the price increases, what is? Put simply – lack of inventory and/or selection.

Population Growth

Markets across Northern Nevada are being moved by the people who are moving here. We’re not talking about those who have been here for 10 or 15 years, we’re referring to those who have relocated more recently. We have an influx of awesome employers coming in, creating jobs, and enticing folks to consider making Northern Nevada their home. That’s what is really driving up the population in and around the region.

New Listings 

Unlike the rest of the markets we follow, Sparks is seeing an incline in new inventory – which is great news. Data shows there was a little dip, but it is now back up. There is a great deal of new construction in Sparks and it is supplementing a lot of the resale behaviors in the marketplace. Resales have gone down, just like the Reno and Carson markets, but those markets don’t have the same amount of new construction happening. There are hundreds of homes currently being built in Sparks, and that really offsets the supply issue. Keep in mind, Sparks is still very similar to the rest of the marketplace, but it’s not the same in terms of the rate of decline. 

Homes Under Contract

We saw a big spike in pending sales, with buyers and sellers successfully reaching agreements, but that number is in quick freefall again. What does that tell us? It’s a reflection of properties being absorbed faster than new properties are being listed. 

Inventory

This is really our pickle right now. This is why prices aren’t doing what people think they should be doing. It is why markets aren’t crashing. The supply of inventory is so tight. Sparks is on a slower decline, not quite as sharp as Reno and Carson City – again, that can be attributed to new construction supplementing the resale marketplace. In comparison there is a lot more opportunity for buyers in Sparks right now, it’s where the inventory lives. A lot of the new build phases have begun to calm down, but there is still a lot of construction going on. There have been a couple of recent groundbreakings for new, higher-end properties as well. Active buyers are encouraged to get out there, look around, and take advantage of the new construction inventory. 

Weeks Supply of Inventory

An obvious reflection of that decline of available inventory, we’re starting to get tighter and more into a seller's market. Sparks is hovering around 6.9 weeks of inventory – that’s neck and neck with the Reno market. It’s been on a continual decline because there are no houses hitting the market. 

Percentage of List Price 

Right now, sales in Sparks, Nevada are averaging 97.65%  of asking price. Make no mistake, this is not exclusive to the resale sector – this applies to builders as well. Just because it’s new construction, it doesn’t mean you have to pay the sticker price. Those days are done. So, buyers should absolutely take that into consideration when they talk to the folks in the onsite sales offices. They are open to offers and willing to negotiate. They aren’t hiding anything; they want to work with buyers as well as their agents (builders compensate agents, too). Our team has helped a number of clients navigate new construction and the opportunities therein and they have successfully gotten deals below the listed price. Resale sellers are willing to negotiate as well. Those outliers in the market who are firm on their price aren’t acting reasonably. Thankfully, based on current behavior, that hasn’t been the case. Sellers are wanting to work with buyers, negotiating to find solutions so that they can sell their home. 

Days on Market

We are seeing a spike with days on market, but it's not enough to bring notice to, adding in another two weeks compared to last week’s numbers. Overall, in watching the general ebbs and flows, it’s been pretty level. We saw the most volatility around Thanksgiving 2022, but it’s calmed down. And it’s a little too soon to tell if that upward trend is just a spike, and likely to drop back down. 

Unsold Listings

Very few listings are unsuccessfully selling. They’re not expiring and they’re not withdrawing. They’re selling. This is precisely why active buyers should not hesitate to make offers. If there were unreasonable sellers out there, we would see an increase here. That’s not the case. It’s been flatlined since the sharp drop after the new year. As mentioned before, buyers can find a lot of opportunities if they do a little research. If there are homes that have been sitting on the market, even those listed at prices outside of range, they may be worth making an offer on. Serious sellers want to work with today’s buyers, and there is proof they are coming to agreements. And the best advice for potential sellers? Don’t wait for warmer weather to list. Look at the data instead of the snow outside the window. There are practically no other homes to steal buyer attention. There are many folks trudging through the snow to look at homes – because they need housing more than they need to worry about weather. Seasonality brings competition, so consideration should be given to moving up timelines and getting on the market before inventory starts to increase. 

In summary,

Even with a huge lack of inventory, there is more opportunity in the Sparks, Nevada market than that in other regional markets – especially in the new construction sector. Interest rates have increased to help slow inflation, but they are not preventing buyers and sellers from coming to an agreement. Buyers are encouraged to consider looking outside their current price range, and prepare for some negotiation, regardless if the home is a resale or a new build.