Cooling demand is starting to affect Reno’s red-hot housing market. The median sales price of an existing single-family home fell below $600,000 for the first time since February.
The Reno/Sparks Association of Realtors reported a median home price for Reno of $595,000 in July, down from its record median of $635,000 the previous month. The report is limited to stick-built, existing single-family homes and excludes townhomes, condominiums, modular homes and new housing.
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The lower median price follows several months of declining demand for the Reno housing market, which has posted a median home price of $600,000 or more in five of the last six months.
Since February, unit sales of existing homes have failed to beat year-ago numbers for the same period. In July, for example, Renault saw sales of 298 units, about 33% less than the same month last year.
The decline in Reno home sales follows several interest rate hikes as the Fed tries to moderate inflation. The Fed kicked off March with its first rate hike in three years, with a 0.25 percentage point increase. Since then, the Fed has raised rates substantially, with a half-percentage point increase in May and a 0.75 percentage point increase in June, the largest in more than two decades.
Rising interest rates have priced out many prospective home buyers, especially given the high home prices in Reno. The latest figures signal a return to a more normal market after years of soaring median home prices, tipping the scales significantly toward sellers, said Sarah Scattini, president of the Reno/Sparks Association of Realtors.
“We are seeing all the signs of a return to a balanced market,” Scottini said. “Buyers have a better choice and can take their time to make the right decision for their family and their future.”
The Sparks neighborhood also saw a drop in median home sales prices, though not as much as Reno. The median home price in Sparks was $547,480 in July, down less than one percent from the previous month. Sales on the Sparks were down significantly, however, at 127 units, down nearly 37% compared to last year.
Overall, Renault-Sparks saw sales of 425 units, down 34% year-on-year. The combined median home price for both cities was $574,510, down more than 4% from June.
As demand cools, homes stay on the market longer. The average number of days it took for a deal jumped from 14 days in June to 25 days in July. In the same month last year, it took just six days to reach an agreement.
After consistently selling homes above their list price last year, homes on the market are now selling for slightly less than 99.2% of their original list price. A recent analysis by Realtor.com ranked reno No. 1 in the nation for reductions in the original list price of an existing home. 1 place given.
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The Reno-Sparks market is seeing more inventory of homes on the market. Active inventory stood at 1,348 units in July, up 9% from the previous month and up nearly 158% from last year’s 523 units.
The months’ supply of inventory, which measures how quickly existing inventory can be sold at the current sales pace without new inventory entering the market, also continues to tick up. Reno-Sparks had 3.2 months of inventory in July, less than a month over the same period last year. Typically, six months of inventory indicates a balanced market between buyers and sellers.
According to Scottini, the shift toward buyers is seen in sellers’ willingness to work with buyers.
“It’s not a full-on buyer’s market but it’s turning into one as houses sit forward,” Scottini said. “Sellers are now willing to cooperate with buyers who need some closing cost assistance or credit repair.”
Jason Hidalgo covers business and technology for the Reno Gazette Journal and also reviews the latest video games. Follow him Twitter @jasonhidalgo. Like this topic? Support local journalism with an RGJ digital subscription.