Housing outlook: stock and prices in the region are rising

Due to high interest rates, home sales in Northern Nevada remain relatively stable, but average prices continue to rise.

Robert Bartshe, president of the Sierra Nevada Association of Realtors and a real estate agent with Re/Max Professionals in Carson City, told NNBW last week that sales are down less than 1 percent from a year ago, even as interest rates stubbornly hover between 6 and 7 percent. There were 405 homes sold in June and 436 in July, SNAR reports.

Meanwhile, home prices continue to trend upward. The median home price for SNAR's six-county region was $575,000 in July, up 4.5% from the same period in 2023.

“The median sales price is still well above the national average,” Bartshe said. “It's actually the highest median sales price we've seen since 2022.”

“Our active inventory is also on an upward trend – it will increase by about 16.5 percent from 2023,” Bartshe added.

Bartshe presented an overview of the residential real estate industry at the CCIM Institute Northern Nevada Chapter's Mid-Year Report and Outlook last week at the Atlantis Hotel Casino. Other 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 homes in Greater Reno-Sparks have significantly exceeded the national average of $412,300 this summer, 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 the data for the entire region) were $600,000, and in July prices rose to $607,500, a 6.6 percent increase from the same month last year, SNAR reports.

The median sales price of a condo or townhome in Reno-Sparks, meanwhile, was $365,000, making it a more affordable option for buyers with limited money and income, Bartshe noted. Despite the increase in single-family home prices, properties are still going pretty quickly, Bartshe added. The average 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 a quick time to close a real estate deal,” he said. “Properties that are in good condition and priced right go under contract quickly. Sellers who ask a little too high a price tend to sell those properties, and that's why we're seeing more price reductions across the market than we've seen in recent years.”

“As inventory levels increase, buyers have more choices and therefore are taking a little more time to select a property to make an offer on,” he added.

The increase in inventories is actually a return to normality in the summer months, Bartshe told NNBW.

“We usually see this increase in inventory in the early summer months, so May, June and even into July,” he said. “It's much lower than it's been in the past. Before COVID, a lot of sellers were waiting until those summer months to put their homes on the market. When COVID hit, that trend disappeared and it was kind of even conditions and inventory was pretty flat. But we're seeing that (trend) slowly coming back.”

Despite the difficult interest rate environment, prospective homebuyers have accepted the negative impact on new mortgage loans. And although the Federal Reserve has indicated it may begin cutting interest rates in September, the impact of any rate cuts will likely not be felt until late in the fourth quarter, when the upcoming presidential election is decided, Bartshe noted.

“We've been told to expect some rate cuts in September, which historically happens before presidential elections,” he said. “We might see a slight increase in selling, but I don't think it will have a significant impact until the election is over and the uncertainty subsides.”

“People are coming into the market with the realization that the (housing) market is not going to collapse anytime soon,” he added. “The Fed had been saying for months that rates would come down and they didn't. So the realization is taking hold that this is the new norm.”

About a quarter of home purchases in Northern Nevada last month were cash purchases, SNAR reports. Only about half of those sales were from investors, Bartshe noted — the rest of the buyers who paid cash used money from previous home sales.

Many potential home buyers are still deterred by high interest rates. Homeowners with mortgage rates below 5 percent are often unwilling to accept the higher mortgage rates as buyers, Bartshe says.

“They feel like moving is not an option because they don't want to take on a higher interest rate,” he said. “They're going to stay, which in the long run will further limit inventory because these people are coming into the market.”

According to SNAR, home sales in Carson City remain particularly stagnant. 51 homes were sold in June, down 15 percent from the previous month and nearly 23 percent from last year. However, median prices trended upward, averaging $560,000, up 14 percent from last year. Douglas County, on the other hand, saw 47 sales in June. That's the same number as the previous month, but down 30 percent from 2023 sales volume. The median price for home sales in the county was $720,000, down just under 3 percent from last year.