Booming real estate market shows signs of stabilization
The Reno / Sparks real estate market is still on fire with low inventory on hand and high demand, but luckily it is starting to stabilize. Recently, Reno was ranked 42nd on Livability.com for Best US Cities to Live in due to its growing job market, abundance of recreational activities, and being pet-friendly. However, while it is still a highly desirable place to live, historically low interest rates continue to make it a good time to buy.
The Reno Sparks Association of REALTORS (RSAR) reports that there were 516 active listings in the Reno / Sparks area at the end of October, a decrease of 4.6 percent from last month. However, comparing it to October 2020, there was almost 50% more inventory available in October 2021. High demand has led properties to close deals faster, often with multiple offers.
âWe’ve been in a kind of crazy, hyperactive market. We thought COVID-19 would slow things down, but it did the opposite and speeded things up, âRSAR President Gary MacDonald said. It seems that at the height of the pandemic, when people didn’t have to go to the office, they started to think about moving to more remote, more tax-friendly areas like northern Nevada. .
âWe still have short inventory and it’s a strong seller’s market now,â says MacDonald, âbut we’re approaching a month’s supply of inventory in homes under $ 400,000 instead of the seven-day inventory that we saw.
âThe thing everyone wants to know is if the market is going to go down, and my answer is ‘no’. A normal supply is a six-month inventory that favors neither the buyer nor the seller. However, right now demand is high and stocks are low, which still makes it a sellers market, âhe adds, explaining that sellers have greater bargaining power when stocks are low. .
Once again, the Reno / Sparks area set a record monthly median sale price for a single-family home at $ 540,000 in October of this year; an increase of 18.5% compared to October 2020. The RSAR recognizes, however, that the rapid rate of increase in this market is unusual and is not expected to last in the long term.
For people looking to buy a home right now, MacDonald recommends that cash buyers be prepared to easily produce proof of funds in their account to complete the transaction, and those in the finance business should have a professional real estate agent. by their side as they sail. transfer of ownership.
âIt’s a complicated market, so it’s best to work with your chosen lender and go through the appraisal, home pricing, and underwriting process as early as possible. Get the funding earlier in the process so you’re prepared to accept the letter when you make an offer, âsays MacDonald.
While the local real estate market is still a bit warm, it is showing signs of slowing down as winter approaches. RSAR reports some stabilization as demand is met.
Observing that it looked like homes under $ 200,000 in the Reno / Sparks area appeared to be on the market for seven days during the summer and then went into receivership, MacDonald thinks it could be attributed to people. making offers on sight invisible (which seems to have slowed down a bit), unrecognized contingencies in condominium developments and possibly issues with the pass inspection. RSAR measures inventory in months or days, referring to the time it would take to sell all existing homes when no new homes are listed during that period. Using this model, the RSAR observes that there were 5.9 days of perpetual inventory for homes priced below $ 400,000 and 25 days of inventory in the range of $ 400,000 to $ 700,000. $. In October 2021, the RSAR announced that there was still a 1.9% increase in house prices compared to the previous month.
âI think it’s slowing down a bit, but as long as demand remains high there is continued upward pressure on prices as long as inventory to sell is low. Right now we are seeing shortages of aluminum, glass, building materials, which are affecting the real estate market and also pushing up house prices, âMacDonald said.
He believes, however, that it’s still the best time to buy a house.
âWe’re at historically low interest rates, which makes this a great time to enter the market or move to a home that better meets your lifestyle needs. And everyone talks about inflation … with inflation normally comes pressure on interest rates. If interest rates go up, in a year you will end up buying fewer homes for the same price, âhe adds.
MacDonald also believes that during the holidays when the weather is a bit rough, people who are motivated to buy a home have another advantage …
âDuring stormy windy days, you might be the only one looking at houses,â MacDonald says. If you really want to close the deal, however, he reiterates that it helps to have a professional real estate agent to help you negotiate to get into your dream home.
âAt the moment, the real estate market is complicated, it is not easy to navigate. That’s why it’s essential to have someone by your side who has your best interests in mind, âadds MacDonald.
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