In the first month of 2021, we continued to see the impact of high demand and low supply in the Reno and Sparks housing market. While sellers may find themselves in an advantageous position due to market conditions, buyers are offering above list prices. National reports also show that the local housing market is in line with larger trends as Reno continues to gain attention for its unique qualities.
If you’re looking to buy or sell, keep reading for the latest on the Northern Nevada real estate market and up-to-date insights from our team of neighborhood experts.
Reno and Sparks Housing Market Update
Median Sales Price Information
From December to January, the median sales price of Reno and Sparks housing decreased by less than 1%. This minimal slide may come as a surprise, given the competing offers, limited inventory, and high demand that we see in the market. However, due to those same circumstances, we’re expecting prices to rise in the coming months. Year-over-year, the median price for a single-family increased by 10% to $446,702.
Price Per Square Foot Trends
The price per square foot increased to $259, representing an 18% boost from December 2020 to January 2021. This number demonstrates that the market is holding firm as the high demand for housing meets low inventory levels.
Over Ask Analysis
Another indication of our housing market’s health is the number of showings properties are seeing and their respective price of offers. From February 1 through 10, our real estate agents received many over-ask offers, according to research on early market trends compiled by Amy Shocket, one of our top Realtors. Based on our Realtors’ experience, many listings also received between 30 to 60 showings in two or three days.
For another perspective, consider these statistics as of January 31, 2021, from the Reno-Sparks Association of Realtors. Of 33 homes sold in the $300,000 price range, 23 received more than their list price, and the average amount over asking was 70%. In the largest affected price ranges, $300,000 to $500,000, we see an average list-to-sale price ratio of 101.54%. Because of this analysis, I believe the median price will rise significantly in the coming month.
Reno and Sparks Housing Supply
To determine supply, we need to consider the current state of real estate economics. In January 2021, there were 370 new listings in the Reno and Sparks housing market, which is 19% more than the 310 homes listed for sale in December. However, there are 22% fewer listings than the 474 listed for sale in January 2020. Currently, there are 157 homes available on the market. A year ago, there were 632 homes for sale, which means inventory has dropped by 75%. Furthermore, there are only 30 homes for sale at or below the current median home price of $477,000, representing 19% of the market’s inventory.
Reno and Sparks Housing Demand
To measure demand, we track the number of new homes that go into contract in a given month. The number of new contracts increased from 380 listings in December to 416 in January. However, we saw a 20% decrease from 520 in January 2020. While demand remains high, there’s just not enough inventory to support the area’s rapid growth.
Housing Units Sold in Reno and Sparks
In January, Realtors in Reno and Sparks sold 370 homes, a 33% decrease month-over-month from the 554 sold in December. As a record low, the number of homes for sale in January is down nearly 6% from last year.
Year To Date Sales For Housing In Reno and Sparks
To see where sales are taking place, we analyze different price levels. The majority of home sales—65%—continues to fall in the $300,000 to $600,000 price range. The luxury market is experiencing the most increase in market presence, with homes from $900,000 to $1 million accounting for 11% of sales in the market. We expect that to remain a trend in 2021.
Available Inventory In The Housing Market
Available housing inventory in the Reno and Sparks market continues to reach record lows. In some price ranges, we see days of inventory. Typically, a five to six-month inventory is considered a healthy and balanced market. As of January 31, there were 170 single-family available homes on the market, a 73% decrease from 2020. There are about two days of inventory for the $300,000 market and below and four days of inventory left for price ranges above.
Days on Market
Average days on market increased by 15% month-over-month in January, from 72 days in December. This number is well below the average days on market we typically see during this time of the year. Many homes in the median market range are getting into contract and selling within 30 to 45 days. This creates an excellent environment for sellers and less so for buyers.
A seller-advantaged market is likely to last to midyear. According to a recent report, home-sale prices increased by 18% near the end of January for the country, compared to a year earlier. While Washoe County feels like it’s experiencing more appreciation and market volatility than other areas, that’s not the case. Real estate, in most places, is on fire. One other thing to note—this is not a bubble. Our housing market reflects the region’s economic growth, which is based on a diverse set of circumstances and attraction efforts.
However, as Reno continues to gain national attention, it will also need an increase in housing supply to meet growing demand. The 2020 Milken Institute Best Performing
Cities Report ranked Reno as No. 1 for job growth and No. 4 and in the best performing large city category, behind Austin, Texas, and Salt Lake City. Reno also ranked 4th for wage growth and 2nd in high-tech gross domestic product growth. The demand we’re experiencing for housing now is not going to subside anytime soon. Builders creating new inventory and homes to meet this demand will be crucial to our community’s sustainable growth.