The Northern Nevada real estate market and the rest of the country have experienced record prices and bidding wars since the start of the pandemic. But some experts believe the industry is softening or that the ‘crazy’ is just leaving the housing market.
The growth rate of prices and buyer demand are slowing down, and the market is showing signs of returning to a more typical seller’s market. And although we can’t predict the future, there are three key fundamental differences between the current market and the 2008 Great Recession, which is why we’re doubtful to see another crash.
At Dickson Realty, we regularly share insights into the Northern Nevada real estate market to help you make informed decisions. So, whether you’re thinking about buying or selling a home, this is information you can use.
Northern Nevada Real Estate Market Is Showing Signs Stabilizing
Overall, we’re ready to wave goodbye to the craziness and say hello to a more balanced market. Here’s what happened in July 2021.
Median Home Sale Prices Dropped Slightly
In July 2021, the median sales price in the Northern Nevada real estate market stood at $525,000, representing a 1% decrease month-over-month and a 21.2% increase year-over-year. Although the market is still experiencing a degree of appreciation, this graph shows that housing prices are starting to stabilize. We expect an appreciation of about 3% to 5% for the remainder of the year, a significant improvement from spring.
More Inventory and Less Competition
Since the beginning of the pandemic, there has been a significant disparity between the number of buyers looking for homes in Northern Nevada and the amount of housing inventory to meet the demand. However, in July 2021, there were 721 new listings, which is a 10 percent increase month-over-month and a 4.6% increase year-over-year. We are hopeful that the market will balance out as this trend continues, benefiting both buyers and sellers.
Fewer Homes Were Sold Month-Over-Month
In July 2021, there were 639 homes sold, which is a slight decrease month-over-month. This number also shows a 15.1% decrease year-over-year due to the surge of people buying and selling homes after the economic shutdown. With fewer homes sold, demand appears to be cooling down in the Northern Nevada real estate market. However, there’s still an immediate need for more inventory as we wait for new housing developments.
Demand in the Northern Nevada Real Estate Market Declined
We track the number of new homes that go into contract in a given month to measure demand. In July 2021, there were 587 new contracts in the Northern Nevada real estate market, a slight decrease month-over-month and 14.2% down from July 2020. Similar to the number of homes sold, this decrease is consistent with the increased demand we saw in 2020 as people came out in droves to buy real estate.
The number of days it takes for a home to go into contract is also declining, which means shorter contingency periods. In July 2021, the number of days to contract was 15, a 48% decrease month-over-month and a 17% change from 34 days in July 2020.
Over Asking Prices Remained Historically High
Since the beginning of the year, more homes in the Northern Nevada real estate market have been selling above the original listing price. This is due to low inventory levels, cash buyers, and increased housing prices. To understand how many homes sold for more than the asking price and by what percentage, we calculate the average sales price divided by the final asking price to measure the increase.
In July 2021, the over-asking was 102.9%, representing a slight decrease month-over-month and a 3.5% increase year-over-year. This percentage is historically higher than the last five years, and until appreciation goes down, the market will continue to work in the seller’s favor.
Homes Continued To Sell Quickly
Days on the market is an excellent tool for showing changes to the Northern Nevada real estate market over several years, and sellers can also use this information to know how long it will take to sell their homes. In July 2021, homes stayed on the market for 64 days before selling, that’s 12 days shorter than last year and 13 days down from July 2019.
How To Use This Information For Your Benefit
Sellers: The market is still in your favor, but don’t wait too long to take advantage of the increased over-asking prices while they’re still high. As the market continues to stabilize, the extreme demand for houses will slow down, reducing home sale prices. And with new listings coming online, one of our neighborhood experts can help you find a new home once you sell your current property.
Buyers: While there’s more standing inventory and less competition for homes in the Northern Nevada real estate market, now is the time to act. But be ready to make an offer as homes are leaving the market quickly. You’ll also want to get pre-approved for a mortgage so that you can move quickly and meet the speed of the market.