Demand for affordable housing in Reno-Sparks remains high, and supply is near record lows. This creates a challenging environment for home buyers and sellers alike. However, it is also one of the best move up markets in recent history. Let’s take a look at what’s happening.
As of April 2nd, there were 600 homes on the market that were Active and Available for purchase. That is a very slight 1.2% decrease from the 607 available homes on the market at the end of March, but a staggering 39% decrease from the 983 homes on the market in March 2017. Nearly 64% of available homes have asking prices below $600,000. Only 104 of the homes on the market today have asking prices under $300,000. By comparison, 258 of available listings were under $300,000 at this time last year. If you are buying in this market, you will want to be pre-qualified with a lender before heading out to look at any homes in the lower price ranges, as homes quickly go into contract after hitting the market.
Absorption Rate, or Days of Available Inventory, is the amount of time it would take to sell off existing homes for sale if no additional homes came onto the market.
As expected, in prices below $600,000 multiple or competing offers are happening in some neighborhoods. For homes priced below $300,000, we have only 12 days of inventory, emphasizing the great need for more affordable homes in the market. For homes in the range of $300,000-$600,000, available inventory is 27 days, or just under a month. If you own a home in either of these price ranges, it is a very good time to sell with little competition in the marketplace. It is also an excellent time to consider moving up to a higher priced home where more inventory is available.
With an inventory of 2.7 months, the $600,001 to $900,000 price range is firmly in seller’s market territory like the lower price ranges. For properties in the $900,000 to $1,500,000 range, the inventory has decreased to 4.8 months. This price range represents the most balanced market between sellers and buyers. For homes priced over $1,500,000, we have a 13.2 month or a 1.1 year supply.
It is good to remember that The National Association of Realtors considers 5 to 6 months of inventory a healthy market, where neither buyers nor sellers have a distinct advantage.
Let’s take a look at the Percentage of Sales by price range as of March 2018.
So far this year, 88.8% of all sales in Reno/Sparks have been under $600,000, with 33.1% of sales occurring below $300,000, and 55.7% of sales between $300,000 and $600,000. A shift can be seen between these two numbers when looking at the percentages at this time in 2017, where 51.5% of all sales occurred below $300,000 and 41.7% occurred between $300,00 and $600,000. Only 7.2% of sales this year have been between $600,000 and $900,000. The remaining sales, or just 4% of all sales, were over $900,000.