The Reno-Sparks Nevada real estate market could see a dynamic fourth quarter to close out 2024, influenced by lower interest rates and more available homes in the current housing market. These favorable conditions could attract buyers who have been on the sidelines due to affordability concerns, creating more demand and opportunities for sellers.
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In September 2024, rising inventory and a decline in interest rates contributed to a dip in the median sales price, providing buyers with more options and negotiating leverage. While the number of homes sold remained robust, the increase in days to contract and the slight dip in the final sale price ratio point towards a potential easing of the strong seller’s market conditions that had prevailed in previous periods.
To dive deeper into these local and national trends and how they might affect you as a buyer or seller, watch our video about third-quarter real estate market trends in Northern Nevada. It covers essential details on Reno, Nevada real estate, and insights into other regional areas, including Sparks, Nevada.
Lower Interest Rates and More Available Homes and Shift Market Dynamics
The Federal Reserve implemented a 0.5% rate cut in September 2024, lowering the federal funds rate from 4.75% to 5% to support the economy amidst a slowing job market and inflation near target levels. This reduction, the first after nearly two years of increasing rates, is expected to translate into lower monthly mortgage payments, making homes more affordable for buyers. Mortgage rates have already fallen over 100 basis points since their peak in May 2024, with loan officers quoting rates in the low 6% range for conventional conforming mortgages and the mid-to-high 5% range for government loan products.
Lower interest rates have already resulted in a 7% decrease in single-family home payments compared to last year, according to HousingWire, and 13% lower than their peak in May 2024. As affordability improves due to lower rates, buyer demand will likely increase, potentially leading to a more active market in Q4 2024.
Housing inventory is on the rise, both nationally and in the Reno-Sparks market. Inventory in Reno-Sparks has increased by 25% since the beginning of the year, reaching 1,008 homes in September 2024. Nationally, the total US single-family inventory is 38% greater than at the same time last year. Increased availability of homes is expected to shift the market dynamics in favor of buyers. With more choices available, buyers may have more negotiating power, potentially leading to more moderate price growth or even slight price declines in some market segments.
Reno-Sparks Real Estate Local Market Performance in Q3 2024
Several notable trends in Q3 2024 demonstrate that buyers now have more time and negotiating power as they consider a broader selection of homes in the Reno-Sparks real estate market. Elevated inventory, shown by increased active listings, has given buyers more choices, while the increase in sales demonstrates consistent demand.
Median Sales Price: A Barometer of Market Value
The Reno-Sparks housing market’s median sales price fell 3.8% month-over-month in September 2024, settling at $587,000, above last year’s $570,000. This price is a key indicator of home values and supply-demand balance.
Number of Homes Sold: A Gauge of Market Activity
In September 2024, 407 homes sold, up 5% from August and nearly 10% from September 2023. This uptick in sales indicates a robust market driven by strong buyer interest and confidence.
New Contracts: A Glimpse into Future Sales
Demand in the Sparks and Reno, Nevada housing market is relatively robust for 2024, though lower than in previous years. New contracts indicate future sales trends. In September 2024, contracts were 30% higher than in 2023 but declined by 1% from August and were significantly below the 2017-2019 average of more than 500.
New Listings: Fueling the Supply Side
The Reno-Sparks real estate market experienced a slight decline in new listings, though they remain high compared to last year. In September 2024, 503 new listings came to the market, a 1.4% decrease from August but a notable 22% increase from September 2023.
Active Inventory: A Balancing Act
Active inventory is the total number of homes for sale at any given time and drives market dynamics. In Reno-Sparks, the housing inventory reached 1,008 homes in September 2024, marking a 2.3% increase month over month and a 25% increase year over year. More inventory favors buyers, enhancing their negotiating power and potentially leading to moderated or declining prices.
Days on Market: Measuring Time to Sale
The time it takes for homes to go under contract in Reno-Sparks is increasing, indicating a shift to a more balanced market. In September 2024, days to contract rose to 31 days, marking a 20% increase month over month, a 40.9% increase compared to last year, and a return to a typical market where securing a contract takes 30 to 45 days.
Final Closing Price to Initial Asking Price Ratio: Seller’s Leverage
The closing price-to-asking price ratio indicates the negotiation dynamics between buyers and sellers. In September 2024, this ratio in the Reno-Sparks real estate market decreased slightly to 98.6%, reflecting a 0.5% dip from August and a 0.2% decline from September 2023. A lower ratio suggests that buyers have more negotiating power.
Preparing for the Q4 and Beyond: Transitioning Market with Potential for Growth
Lower interest rates and increased inventory will likely combine to create a more dynamic market in Q4 2024 for the Sparks and Reno, Nevada real estate market. Buyers and sellers will navigate a changing landscape, with opportunities and challenges for both.
Incremental inventory increases and slower price growth could give buyers more choices and negotiating power. This environment could allow buyers more time to evaluate options and negotiate prices.
While affordability challenges remain, the potential for further declines in interest rates could stimulate buyer demand, leading to increased sales activity. Sellers should consider strategic pricing and attractive staging to stand out in a more competitive market.
