Reno/Sparks Market Report: October 2023

Reno/Sparks Market Report

What's Happening in the Real Estate Market?

This is the question we get asked every day, and to be candid, we're experiencing a unique market situation that's unlike anything we've seen before. Historically, when demand takes a dip, we expect inventory to rise, and subsequently, we start witnessing price reductions. However, things are different now. Demand, especially in the lower price ranges, has been impacted by higher interest rates, pricing some potential buyers out of the current market. While inventory is slowly increasing, many homeowners are holding onto their properties, given their low-interest rate mortgages and healthy equity, unless they absolutely need to move or their dream home becomes available.

In September, our median home price saw a slight decrease. However, earlier this year, we observed monthly appreciation, and for the past three months, it has remained steady, ranging between a high of $575,000 and a low of $570,000. Looking ahead, we anticipate either more conservative listing prices in the final quarter of the year or an increase in price reductions.

Now, let's delve into the numbers. The number of homes sold in September dropped by 13.3% compared to August and 21.1% compared to September 2022. Two key factors are contributing to this decline. Firstly, the drop in demand can be attributed to higher interest rates without a corresponding decrease in home prices, which has priced some prospective buyers out of the market. Secondly, it's important to remember that last September, we were still recovering from the largest price surge, which saw a national average increase of 47%.

New contracts have also dipped, with a 7.8% decrease from August, but only a slight 0.8% drop from September 2022. Additionally, the number of days it takes for a contract to be finalized is gradually increasing. These trends lead us to predict that November sales will likely follow suit and experience a decline.

Now, for some positive news—there is still a market out there! While inventory remains limited in the $400,000 to $1,000,000 price range, it's reaching or surpassing a "balanced market" status* above $1,000,000. We expect this to lead to some price adjustments or innovative strategies for sellers who are looking to make a move. Buyers have more options, including newly listed homes, but whether new or old, buyers are becoming more discerning about repairs and overall property conditions, marking a noticeable shift in the market's dynamics.

If you have any questions about this report, real estate in our region, or the value of your home, don't hesitate to reach out. It would be a pleasure to assist you.