Northern Nevada's overheated housing market may be cooling,with the number of listings growing and buyers willing to wait longer for prices to come down.
Gone are the days, say real estate brokers, when you'd put a house on the market, receive multiple offers within two or three days and have it snapped up almost immediately.
But the cooling, say observers, is more of an adjustment.
The residential market is still healthy, thanks to the robust economy and continuous movement of new businesses and people into the area.
The average days that properties were on the market in mid-October was 91 for singlefamily residential houses and 79 for condominiums, up from the 2004 average of 67 for houses and 58 for condos, according to the Northern Nevada Regional Multiple Listing Service.
As on a single day Oct.
20 25 listings had expired in northern Nevada and prices on 138 houses were reduced.While there were closings on 71 properties, 110 new property listings came on the market, according to Pat Schweigert, a broker at ERA Realty and a trustee at the NNRMLS.
Looking at the seven-day figures that included Oct.
20, 292 properties were sold, while 559 properties were listed.
"And what all of this means is that the buyer has more to choose from," Schweigert adds.
"He doesn't have to panic to buy a house.
But it also means that the sellers have to do things to make the house more attractive to that buyer whether that's price, commission or conditions.And also,maybe give a bonus to the agent of the buyers to buy a house."
In fact, Schweigert says that when scrolling down her e-mails every day she sees prices reduced or incentives offered, such as a $1,000 bonus to the buyer's agent.
"I haven't seen that in two years," she adds.
"We've not seen that because we did not see the need for that."
Noting that 175 properties sold in September in the Reno-Sparks area compared with 225 in June,Nancy Fennel, president of Dickson Realty, thinks a combination of factors account for the difference.
"First of all you've the climbing interest rates.
Then you've the seasonality of the year," she says."It's still a good market."
Tom Powell, president of IntoHomes Mortgage Services, believes that good properties are still selling within a reasonable period of time.
And observers need be careful to analyze the average-days-on-market figures, he says, because different price segments in the market exhibit different waiting periods.
Entry-level homes will take 90 days or less, mid-level homes six months and a high-end home that's priced over $1 million, Powell says,will take nine to 12 months to sell.
Agrees Mike Soon, broker/owner of ReMax Realty Professionals.
The price segment of high $200,000 and low $300,000 market is still moving pretty well, he says, selling within two months.
Though it's true that the median sales price in Washoe County showed a month-tomonth drop from $360,000 in August to $353,250 in September for the first time since August 2004, it's a sign of the market getting back to more sustainable levels, say real estate brokers.
But the median prices for single-family homes in the county rose from $271,000 in the first nine months of 2004 to $339,000 during the same period this year.
The median prices for condos for the comparable period went up from $289,000 to $359,000.
The average prices for the region for a residential home had gone up from $339,114 in 2004 to $391,494, and a condo from $145,000 to $193,000.
(Median price is more accurate than average price figures because one large sale can distort an average.)
"We don't have a blow up going on here," says Schweigert,"We are getting back to normal.
Appreciation of 20-30 percent is simply not sustainable." Adds Soon, "It's good thing." And most real estate observers acknowledge the market could soften even more after September's month-to-month decline.
And the normal down the road, they guess,will 10-12 percent appreciation a year.
"I'd hope for double digit returns, but even if we are in the 7-8 percent range,we should be happy," Soon says.
But there are still a few wild cards out there to watch for that could send the prices soaring or sinking.
The price of water is one, says Powell.
"If we continue to drive water availability and prices outside of reasonableness, you're going to have an impact on real estate," he says.
The time necessary to get approval of new projects also affects prices.
The third unknown is, he says, the interest rate.
"If rates move up more dramatically we don't see that but it's possible you'll have a percentage of buyers who cannot qualify for the homes that are on offer," Powell adds.
Prices may soften in the coming months but real estate observers agree that northern Nevada will continue to be a healthy market for both the native buyers and outsiders because of the climate, the economy and affordability compared to the Bay Area and other unaffordable markets.
"We have got it all," Soon says."We're going through the necessary times,will continue for a while and then make a nice return to a better market in the near future."
