Guy Johnson is a numbers man. He's been pouring over the local home sale data from the Northern Nevada Regional MLS and publishing the “Reno Realty Blog” for 10 years now. The Keller Williams Group One realtor has witnessed the Reno-Sparks median home sales price rocket from $135,000 in 2012, to close to 3 times that now. As he told me, "Certainly over the last few years there have been some double-digit gains on every single year."
But lately, Reno-Sparks home prices have slipped. They've gone from a lofty high of $387,000 in July to dropping 4.4% in August, and 2% in November. Altogether, that’s an almost $10,000 drop. Our local home sales are down 13.1% from this time last year.
Nationwide, the scenery looks the same. U.S. home sales slumped last month at the fastest rate in 2 years, down 8.3% from November 2017. Blame the higher cost of borrowing. Interest rates for mortgage loans were 4.9% last month, compared to an average 3.9% from 2012 to 2017. Johnson says the “Interest rate increases that we've already had, that's putting a damper on some folks wanting to buy."
So the tide may have turned for now with price drops here in August and November, but a Reno-Sparks median of over $377,000 is still out of reach for many who'd like to own a home. Supply is still not keeping up with demand. As Johnson told me, "It’s lack of inventory. I think we just don't have the homes to sell. If we had the homes to sell we'd see sales comparable to last year."
What to do? Sellers might want to wait until Spring, and buyers might want to pull the trigger and buy now. With inventory here still low, and with more growth on the horizon, Guy thinks prices and sales are just taking a winter break. As he puts it, "I think we're going to remain flat, and then we'll see prices start to trend upward again in the Spring."
