February 2022 Market Report

** Data in this report reflect market activity from JANUARY 2022 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 bumped up from $545,000 to $580,000, a 6.5% increase month-over-month and a 29% increase year-over-year. Inventory remains extremely low in Northern Nevada and across the U.S. Despite mortgage rates rising to over 4% in recent weeks, Buyers are still in the market and finding themselves in multiple offer situations, vying to win the contract to purchase.

The graph above shows the rapid appreciation experienced in Reno, without Sparks in the mix. For the first time in history, the median sales price has breached the $500,000’s mark and has reached $600,000!

Though Sparks, Nevada also shows evidence of a rapidly appreciating market, Sparks lags behind Reno, with a Median Sales Price of $520,000 in January 2022.

As mentioned previously, mortgage rates have surpassed 4% in recent weeks and is at about 4.2% currently. Cnet.com points to increasing inflation and a strong economy as reasons for the uptick in the rates. Is this stopping Buyers from purchasing homes now? At the moment, rate increased do NOT seem to be decreasing impacting Buyer activity. In fact, the rate increase, and threats of more increases through 2022 may be adding fuel to the fire and causing Buyers to scramble to lock their rates before they move any higher. All that being said, according to the chart above, rates are still historically low.

January 2022 saw a major drop in the number of Units Sold. Roughly 39% fewer single family homes sold in Reno-Sparks in January 2022 compared to December 2021. 16% fewer homes sold in January 2022 compared to the same time the previous year.

Only 32 homes in Reno-Sparks sold for under $400,ooo in January 2022. This observation could be one reason why we saw such a significant jump in the Median Sales Price.

The Average Sold Price per Square Foot dipped only 1.6% month-over month. Are we starting to see a trend with Average Sold Price per Square Foot hovering around $300/SF over the last several months? Let’s see what happens with this statistic as more homes are expected to be listed and sold in the coming spring/summer seasons.

Homes that sell for $1.5M+ make up the luxury market in Reno-Sparks. Homes in the luxury market are selling at a Price per Square Foot that is 78% higher than the average Sold Price per Square Foot that spans the entire market. The average Sold Price per Square Foot in January 2022 was $300.

in January 2022, the Months Supply of Inventory (MSI), a calculation of the rate of sales, was unchanged compared to December 2021. At 0.6 MSI, the rate of sales was 14% faster than last year. The current MSI indicates that if sales continue at the same pace they kept during January 2022, and no new listing are added to the market, the entire inventory of single family homes would be “sold out” in approximately 2.5 weeks. A balanced market is approximately 5-6 MONTHS supply.

The Median Days to Contract over ALL price points during January 2022 was 7 days, a 53% drop compared to December 2021.

The graph above shows the Average # of Days to Contract by Price. The ONE property listed under $199,000 took 78 days to go under contract.

Contract execution typically begins picking up after the holidays. And this year was no exception. The # of New Contracts in January 2022 (homes with accepted offers) increased 22% month-over-month and also increased 10% compared to January 2021.

As usual, the bulk of New Contracts in the Reno-Sparks market continue to be in the $400,000 to $750,000 price ranges.

The activity trends for New Listings tends to follow the numbers for New Contracts when the holidays subside. As seen in the graph above, there were 33.3% more New Listings in January 2022 compared to December 2021. The # of New Listings were about the same as January last year.

January marks the month that New Listings are typically on the rise after the hustle and bustle of the holidays. The graph above shows just this.

SUMMARY:

- The Median Sales Price is holding steady appears to be on the rise again in Reno-Sparks, now at jumping from $545,000 to $580,000 month-over-month.
- However, do notice that only 320 single # of Units Sold, so the Median Sales Price may be a bit skewed due to more homes in the upper price ranges selling during January 2022.
- The real estate market in Reno-Sparks continues to move at a fast pace, with an average of only 7 Days to Contract and 2.5 Weeks Supply of Inventory. Buyers should continue to see a competitive, multiple-offer market for the foreseeable future.
- As predicted in last month’s market report, the # of New Listings and Contracts is on the rise now that the holidays are behind us!! This should help a little for some frustrated Buyers out there.
- Trying to decide to purchase a home now? Many experts suggest that if you can afford the monthly payment on the house that you want to buy, there is no need to wait, especially since prices appear to continue to rise for the foreseeable future.
- Interest Rates are on the rise, and many Buyers are still working to get a piece of the market before they go any higher. This being said, the current rates (about 4.2% currently) are still historically low.

Answers to last month’s questions:

1) How will the surge in Omicron COVID-19 cases affect the real estate market? Omicron COVID-19 does not appear to be impacting the market compared to the previous COVID-19 variants.

2) Will rising mortgage rates impact Buyer affordability as we progress through 2022? We will have to see what the future holds, but in January 2022, the threat of higher rates may actually be pushing Buyers to lock their rates before they climb any higher.

3) If Buyers retreat from the market due to higher mortgage rates, will this result in a flattening of the market? I believe it could result in perhaps a slowing of appreciation, but not a decline, especially if our economic climate remains the same.

4) Let’s see what happens over the coming months and year!! Indeed!

Looking for guidance for your next real estate purchase or sale? I have had great success with helping my Buyers navigate this crazy market and get them into contract AND helping my Sellers get top-dollar on their sales!! I am here for you, whatever your real estate needs are. Email me at 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.