In January 2022, the residential housing market in Reno and Sparks had another record-breaking month. Housing prices soared, demand grew stronger, and buyers snapped up new-to-market homes quickly. And while the number of home sales was down, we’re expecting sales activity to grow in the first quarter and upcoming year.
After several years of short supply and bidding wars, it’s no secret that the U.S. housing market has become tight and expensive. But, despite the chaos, some economists believe that 2021 served as the peak of the housing market frenzy.
Although housing prices are expected to continue rising in 2022, the residential housing market in Reno and Sparks has more inventory than last year at this time, and there are some new housing developments on the horizon.
Here’s what you need to know about Northern Nevada real estate and what to expect in the upcoming months.
What Happened In The Residential Housing Market In Reno/Sparks In January 2022
If you’re a buyer or seller, we understand that the residential housing market in Reno and Sparks has been somewhat unpredictable over the last several years. We’re here to help you. Here’s what happened in January 2022.
Median Sales Prices Reached Another Record-High
The median home sale price for the residential housing market in Reno and Sparks reached $570,000 in January 2022, representing a 4.6% increase month-over-month and a 27% increase year-over-year. And while some growth is expected during the first quarter of every year due to fewer holiday obligations and more hours of sunlight, this number reflects another record-breaking month for housing prices in the Northern Nevada region.
More Contracts Mean Higher Demand
The number of new contacts highlights demand in the residential housing market in Reno and Sparks. In January 2022, 399 homes went into contract, a 6.7% increase month-over-month and a 4.1% decrease from the previous year.
This monthly increase can be attributed to December’s snowfall record with nearly 18 feet of powder and people less inclined to buy and sell real estate during the coldest months. Although this graph shows a slight drop year-over-year, we’re expecting demand to continue growing for the remainder of the year as we wait for new developments and more inventory to enter the market.
To show the speed of the market, we measure how many days it takes for a home to go into contract. Homes also left the market more than 50% faster than the previous month, from 15 days in December 2021 to just 7 days in January 2022.
More Properties Sold Than The Previous Year
In January 2022, there were 398 homes sold, down 24.5% from the previous month but up 4.7% year-over-year. This number reflects the demand we typically see for the residential housing market in Reno/Sparks during this time of year. And although home sales dropped over the last several months, this graph shows activity rising significantly during the first quarter of every year. For example, in Q1 2021, there was a record-breaking pace of homes sold, from 384 to 459.
Active Inventory Up From Last Year
When a seller lists a home for sale, it’s considered inventory, regardless of the status. And since the market is constantly changing, this can make it difficult for buyers to know what’s currently available. We use “active inventory” as a more dynamic metric to provide a more accurate picture of how many homes were available for purchase.
The residential housing market in Reno and Sparks had 232 homes actively listed for sale in January 2022, an 11.5% decrease from the previous month but a 36.5% increase year-over-year. So, although the Northern Nevada region is still experiencing lower-than-average active inventory levels, the supply has grown over the last year. For example, in January 2021, only 157 available homes were for sale. Typically, active inventory levels range from 600 to 1,000.
New Listings Hit The Market And Left Faster
We can also measure inventory by examining the number of new listings that entered the market in the past month. In January 2022, there were 400 homes listed for sale in Reno and Sparks, a 34.2% increase from the previous month and a slight decrease year-over-year. This number is consistent with seasonal trends and averages about the same compared to January 2019 and 2020. But, as we mentioned above, inventory is going into contract and leaving the residential housing market in Reno and Sparks faster, and it’s creating an even more depleted sense of supply.
Over-Asking Prices Held Steady
Since the pandemic started, homeowners have received more than their listing price due to the high demand for housing. However, sale prices began to drop below 100% of the asking price in the last quarter of 2021. To measure this trend, we divide the average listing price by the final sales price and calculate how many homes sold for more than the listing price and by what percentage.
In January 2022, the sale price of a home averaged 99.9% of the asking price; a slight increase from the previous month and a slight decrease year-over-year. Although over-ask prices have decreased since last year, we’re expecting percentages to rise in the first and second quarters of 2022 as inventory continues to leave the market at an accelerated rate.
Expert Advice For Buyers And Sellers
Buyers: Mortgage rates are rising slightly, and we’re expecting them to continue increasing in the upcoming months. You may also start to experience more competition as the warmer weather embraces the Northern Nevada region. So, now is the time to get your finances in order. You can get preapproved for a loan and show sellers that you’re serious about buying. Prices in the residential housing market in Reno and Sparks are also projected to rise, so don’t wait too long to decide.
Sellers: Although the market remains in your favor, it’s essential to consider how rising mortgage rates may affect how much you can get for your home. With this in mind, we’re not expecting housing prices to stop increasing, but there is high demand for existing homes in the market now. So, if you want to sell while the iron is hot, contact one of our neighborhood experts to help you get the most out of your home.
