November 2021 Market Report

** Data in this report reflect market activity from OCTOBER 2021 compared to the previous month and year.  Information is gathered from the Reno-Sparks Association of Realtors® (RSAR) for the Greater Reno-Sparks region via Northern Nevada Regional Multiple Listing Service (www.nnrmls.com).  Data accounts for single-family resale residences only, and excludes townhouses/condos, manufactured/modular and new construction.

• The Median Sales Price (MSP) in Reno-Sparks ticked up about 2% from  September to October, now at $540,000. The MSP is nearly 19% higher than October 2020, and 37% higher than October 2019.  The steady increase in prices has been fueled by a low-inventory market and high buyer demand. The MSP sits at the very middle of a data set, with exactly half of the houses priced for less and half priced for more.

• 4.7% fewer single family homes sold in Reno-Sparks in October 2021 compared to September.  And 16.7% fewer homes sold in October 2021 compared to October 2020.  Roughly the same number of single family homes sold compared to two years ago.

• The graph to the right illustrates the changes month-over month for Units Sold by Price Point.  The price range with the largest jump in the number of unit sold was the $400k to $499k homes… an 8% increase compared to September.

• The Average Sold Price per Square Foot increased once again, from  $302/SF to $308/SF month-over-month. The Average Sold Price per Square Foot is 29.4% higher than October last year and 42% higher than two years ago.

• Months Supply of Inventory (MSI) in October 2021 was 1.0 MSI.  This means that if the rate of sales in October continues at the same pace, the entire inventory of single family homes would be “sold out” in just one month.  A balanced market is approximately 5-6 months supply.

• MSI by Price shows the change of the rate of sales most significantly decreased in the luxury market from September to October.

• Please note that the reporting of Days to Contract  changed last month. Rather than report the AVERAGE Days to Contract, the Reno-Sparks Association of Realtors is now reporting the MEDIAN Days to Contract.  It has been brought to our attention that Median Days to Contract reveals a more realistic picture of what Realtors are experiencing on a daily basis.  The Median Days from Public Listing to Acceptance of Offers was only 9 days in October 2021.

• The graph to the right shows the Median Days from Listing to Contract over time.  Though we have seen the fast-paced market in past years, the most consistent period of rapid movement has happened since the beginning of the COVID-19 pandemic.

• The graph to the right shows Days to Contract by Price Range. During October 2021, the Median Days to Contract was 36 in the $1.5M+ market, which is still quite fast for the luxury market.

• The # of New Contracts (homes with accepted offers) increased 8.5% month-over-month and decreased slightly (3.3%) compared to last year.

• The # of New Listings dropped from 733 in September to 606 in October 2021, a 12.6% decrease. The # of New Listings in October 2021 was nearly identical compared to last year.

SUMMARY:

• • Low inventory and high buyer-demand continue to place upward pressure on the market, as shown by the further increase of the Median Sales Price, now $540,000 in Reno and Sparks combined.
  • Over the last few months, the number of Units Sold has held fairly steady.
  • A balanced market sees 5-6 Months Supply of Inventory (MSI) and the current rate of sales is 1 Month Supply of Inventory.  We are still very much in a strong Sellers’ market.
  • When we see price decreases on real estate search engines, this is usually an indication that the home was originally priced too far over market value when first listed.  Past sales show that pricing the home at, or near, market value, usually generates more showing activity and one or more offers more quickly.  On the flip-side, over-pricing when entering the market, the ultimate sales price tends to decline due to excessive time on market.
• Predictions for what is to come?
  • In a recent article by Fortune.com, analysis raise 2 critical questions:
    • 1) How high will mortgage rates climb in 2022?  “Higher than expected inflation makes it all the more likely that the Federal Reserve would raise the federal funds rate—something it has kept near zero during the pandemic in an effort to encourage more economic activity. But if the Federal Reserve does raise rates, it would also see the average 30-year fixed mortgage rate rise.”  Will the impending rise of mortgage rates cause more buyer to purchase homes in the next few months? Only time will tell.
    • 2) Will supply chain shortages hold back homebuilders in 2022?  Fluctuations in lumber prices and demand over the course of 2021, supply chain issues with building materials and home appliances, and worsening labor shortages are noteworthy issues that could continue to slow new home construction sales, thus potentially further negatively impacting supply and placing upward pressure on prices.

• Are you in need of guidance for your next real estate purchase or sale?  I am here for you.  Email direct dhallerbach@intero.com or reach by cell at 775-233-0682 so we can discuss the best plan for YOU!  Thank you, ~Denise Hallerbach, Broker-Owner, INTERO RENO.