Demand for affordable housing in Reno-Sparks is high, and supply is low. While this creates a challenging environment for some home buyers and sellers alike, it is also one of the best move up markets in recent history. Let’s take a look at what’s happening.
As of January 30th, there were 578 homes on the market that were Active and Available for purchase. That is 13.1% fewer homes than the 665 on the market at the end of December and a staggering 43.1% fewer than the 1,016 homes on the market in January 2017. 66% of available homes have asking prices below $600,000, which is down from 71.9% in January 2017. Only 103 of the homes on the market today have asking prices under $300,000. By comparison, 276 of available listings were under $300,000 at the end of January 2017. Buyers will want to be pre-qualified with a lender before heading out to look at any homes in the lower price ranges.
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 11 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 28 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 just over 2 months, the $600,001 to $900,000 price range has now moved more into seller’s market territory like the lower price ranges. The months of inventory is 4.7 months for properties in the $900,000 to $1,500,000 range. This price range represents the most balanced market between sellers and buyers. For homes priced over $1,500,000, we have a 15 month or a 1.25 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 in the first month of 2018.
87.9% of all sales in Reno/Sparks so far this year have been under $600,000, with 33.5% of sales occurring below $300,000, and 54.4% 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 2016, where 64.7% of all sales occurred below $300,000 and 31.4% occurred between $300,00 and $600,000. Only 7.3% of sales this year have been between $600,000 and $900,000. The remaining sales, or just 4.8% of all sales, were over $900,000.
The supply-demand equation continues to drive home prices up in the most affordable price ranges. However, the pace of price increases often depends on a specific neighborhood or area of town. Whether you are considering a move to downsize, move up to a larger or more expensive home, or even a move across town, now is best time for us to discuss your options.