Housing outlook: Inventory, prices up in the region

Home sales across Northern Nevada remain relatively flat due to high interest rates, but median prices continue to creep upward.

Robert Bartshe, president of Sierra Nevada Association of Realtors and Realtor with Re/Max Professionals in Carson City, told NNBW last week that year-over-year sales are only down less than 1 percent despite interest rates stubbornly hovering between 6 and 7 percent. There were 405 homes sold in June and 436 in July, SNAR reports.

Home prices, meanwhile, continue to trend upward. The median home price for SNAR’s six-county region was $575,000 in July, a 4.5 increase from the same period in 2023.

“The median sales price is still far higher than the national average,” said Bartshe. “It’s actually the highest median sales price that we've seen since 2022.

“Our active inventory is also on an upward trend – it’s up about 16.5 percent from 2023,” Bartshe added.

Bartshe last week presented an overview of the residential real estate industry at the CCIM Institute Northern Nevada Chapter’s mid-year economic update and forecast at the Atlantis Hotel Casino. Additional speakers at the sold-out event included Todd Collins (commercial real estate), Mark Kreuger (land development) and Gary Heinfeld (professional development).

Median home prices for single-family residences in Greater Reno-Sparks this summer have far outpaced the national average of $412,300, according to Federal Reserve Economic Data. In June median home prices in Washoe County (excluding sales in Incline Village, where expensive home sales significantly skew region-wide data) was $600,000, and in July prices spiked to $607,500, a 6.6 percent jump from the same month last year, SNAR reports.

The median sales price of a condo or townhome in Reno-Sparks, meanwhile, was $365,000, which presents a more affordable option for cash- and income-restricted buyers, Bartshe noted. Despite the jump in single-family home prices, properties are still moving fairly quickly, Bartshe added. The average length of time homes were listed on the Multiple Listing Service was just 24 days, while 90 days is more indicative of standard market metrics.

“Twenty-four days is quick for property to get into contract,” he said. “Properties that are in good condition and are priced right go into contract quickly. Sellers who are priced a little bit high, those properties tend to sit, and that's why we're seeing more price reductions across the marketplace than we have in the last couple of years.

“With inventory on the rise, buyers have more options, so they're taking a little bit more time to choose a property to make an offer on,” he added.

Robert Bartshe

Active listings for the SNAR six-county region in July stood at 1,651 homes, a roughly 5 percent increase from the same month in 2023. There were 16 new listings of homes in outlying areas of Washoe County, such as Washoe Valley, Verdi and Gerlach. Reno, meanwhile, had 359 new listings for stick built homes while Sparks had 176.

The spike in sales inventory is actually a return to the norm for summer months, Bartshe told NNBW.

“We typically see in the early summer months, May, June, and even into July, that spike in inventory,” he said. “It's a lot lower than it has been historically. Pre-COVID, a lot of sellers would hold off until those summer months to put their homes on the market. When COVID hit, that trend went away and kind of a level playing field and inventory was pretty flat. But we're starting to see that (trend) come back.”

Despite the difficult interest rate environment, potential homebuyers have come to accept the adverse effects on new mortgage loans. And while the Federal Reserve has signaled it may begin cutting interest rates in September, the effects of any rate declines likely won’t be felt until late in the fourth quarter after the upcoming presidential election has been settled, Bartshe noted.

“We have been told to expect some (rate) cuts in the month of September, which historically, happens prior to a presidential election,” he said. “We might have a slight increase in sales, but I don't think it will have a significant impact until after the election, when the uncertainty calms.

“People are coming to the marketplace with the realization that the (housing) market is not going to crash anytime soon,” he added. “The Fed had said for months on end that rates would come down, and they didn't, and so that realization is definitely setting in that this is the new norm.”

About one-quarter of home purchases in Northern Nevada last month were all-cash deals, SNAR reports. Only about half of those sales were from investors, Bartshe noted – the remaining all-cash buyers used funds from previous home sales.

Interest rates continue to lock down many potential home sales – homeowners with sub-5 percent mortgages aren’t often willing to become buyers and take on those higher mortgage rates, Bartshe said.

“They feel like moving is not an option because they don't want to trade for a higher interest rate,” he said. “They're going to stay put, which is going to, in the long haul, limit inventory even further because those folks are coming to the marketplace.”

Home sales remain especially flat in Carson City, SNAR reports. In June there were 51 homes sold, a 15 percent dip from the prior month and a nearly 23 percent decline from a year earlier. Median prices trended upward, however, averaging $560,000, a 14-percent year-over year jump. Douglas County, meanwhile, had 47 sales in June. That’s the same number as the prior month, but a 30 percent decline from 2023 sales volume. The median price of home sales in the county was $720,000, down just under 3 percent from the year prior.