With a slim inventory and heightened competition, the current housing market in Reno-Sparks favors sellers. However, buyers can still find opportunities in the market, especially with low mortgage rates and strong demand. Looking ahead, the Reno-Sparks housing market is poised for continued growth, albeit with some uncertainties. Let's delve into the latest market insights to understand the current landscape and what it means for buyers and sellers alike.
How is the Reno Housing Market Doing in 2024?
Home Sales
The Reno-Sparks housing market demonstrated robust home sales in June 2024, with 391 units sold. Although this number is lower than May's 433 homes sold, it's essential to consider the difference in business days. June had only 20 business days compared to May's 23. When adjusted for this difference, June's sales figures actually outperform May's. This strong sales performance highlights the ongoing demand in the Reno Metro Area, despite mortgage rates exceeding 7%
Home Prices
June 2024 saw the median home price in the Reno-Sparks market rise to $600,000, marking a new two-year high. This represents a 1.7% increase from May and a 4.3% year-over-year rise. Over the course of the year, the Reno Metro Area’s median sales price has impressively gained 12.3%.
While the median home price increased, the median sold price per square foot (PPSF) decreased slightly to $318.57, down 1.2% from May. However, it is still up 4.0% compared to the same period last year.
For condo/townhomes, the median sales price dropped significantly to $337,500 in June—a 10.0% decrease from May, but it remains 0.7% higher than June 2023. Despite the drop in prices, sales for condo/townhomes remained relatively stable both month-over-month and year-over-year.
Housing Supply
The available inventory of homes for sale in the Reno-Sparks market rose to 787 units in June, a notable 10.7% increase from May and a 4.8% rise year-over-year. This marks the third consecutive year-over-year increase in inventory, a trend not observed since April 2023.
June’s months' supply of inventory (MSI) came in at 2.0 months, up from May’s 1.6 MSI. This figure suggests a seller’s market, as a balanced market typically has four to six months of supply. The increase in inventory offers more options for buyers, potentially signaling a shift towards a more balanced market in the near future.
Pending sales, however, experienced a decline. Currently, there are 524 single-family residences (SFRs) pending sale, down 9.7% from May and 10.3% from June 2023.
Reno Housing Market Trends
The Reno-Sparks real estate market is showing signs of resilience amid changing economic conditions. The increase in median home prices, coupled with a steady pace of sales, indicates a healthy market. June’s median days on market (DOM) was 50 days, a slight increase from May’s 47 days and just one day more than June 2023. This slight uptick in DOM suggests a gradual balancing of the market.
The market's dynamics are also reflected in the divergent trends between single-family homes and condo/townhomes. While single-family home prices continue to rise, condo/townhome prices have seen a significant drop. This divergence indicates varying levels of demand across different property types.
As we move into the second half of the year, monitoring inventory trends and economic factors will be crucial for understanding the market's direction. The current conditions suggest that buyers might find more opportunities due to the increasing inventory, while sellers benefit from the continued rise in home prices.
In summary, the Reno-Sparks housing market in 2024 remains strong and resilient, with high home prices and increasing inventory levels. Both buyers and sellers should stay informed about these trends to make well-informed decisions in this dynamic market.
Reno Housing Market Predictions
The average Reno, NV home value currently stands at $550,567, marking a 5.0% increase over the past year. This growth reflects a robust housing market in the region. Homes in Reno typically go to pending status in around 9 days, indicating a swift market with high demand.
Key Statistics from April and May 2024
- Median sale to list ratio (April 30, 2024): 0.995
- Median sale price (April 30, 2024): $526,167
- Median list price (May 31, 2024): $599,650
- Percent of sales over list price (April 30, 2024): 21.9%
- Percent of sales under list price (April 30, 2024): 50.9%
Understanding the Market Dynamics
The median sale to list ratio of 0.995 suggests that homes are selling very close to their listing prices, which is a positive indicator of market stability. The median sale price of $526,167 as of April 30, 2024, showcases the affordability relative to the median list price of $599,650 in May 2024.
Interestingly, 21.9% of sales were over the list price, while a significant 50.9% were under the list price. This discrepancy indicates varied market conditions, where some properties are highly sought after, leading to competitive bidding, while others might need price adjustments to attract buyers.
Are House Prices Dropping in Reno?
There are concerns about whether house prices in Reno are dropping. The Market Statistical Area (MSA) forecast provides insights into the future trends of home values in Reno.
MSA Forecast for June 2024, Next Quarter, and 2025
According to the MSA forecast, the housing market in Reno is expected to see minor fluctuations:
- June 30, 2024: 0.2% increase
- August 31, 2024: 0.4% decrease
- May 31, 2025: 2.2% decrease
While there is a predicted slight increase of 0.2% by the end of June 2024, the forecast shows a 0.4% decrease by August 2024 and a more significant 2.2% decrease by May 2025. These projections suggest a cooling off period for the Reno housing market over the next year.
Will it Crash or Boom?
The critical question remains: will the Reno housing market crash or boom? Based on the current data and forecasts, it appears that the market is experiencing a moderation phase. The slight predicted decreases indicate a stabilization rather than a crash. The market is unlikely to see drastic drops in home values but rather a period of slower growth or minor declines.
Factors influencing this trend include economic conditions, interest rates, and housing demand. While the rapid increase over the past year indicates strong demand, the future projections show a need for cautious optimism. Homebuyers and investors should consider these trends when making decisions, keeping in mind the long-term potential of the Reno housing market.
Conclusion
In conclusion, the Reno, NV housing market remains robust with an average home value of $550,567, though future forecasts suggest a slight cooling. Home values are expected to stabilize with minor decreases through mid-2025. The market dynamics, including quick pending times and varied sale prices, highlight the importance of strategic buying and selling decisions in this evolving landscape.
Should You Invest in the Reno Real Estate Market?
Reno, Nevada is a popular destination for real estate investors due to its strong economy, growing population, and affordable housing market. The city offers a range of recreational opportunities and attractions, including nearby Lake Tahoe and the Sierra Nevada mountains, as well as a thriving business environment with a diverse range of industries, from technology to healthcare and logistics.
Investing in the Reno real estate market offers a dynamic landscape with both opportunities and considerations. In the context of Reno's housing market, a median home value may not be considered affordable for everyone.
However, compared to other popular real estate markets in the United States, such as San Francisco, New York City, or Los Angeles, Reno's housing market may be relatively more affordable.
It is important to note that affordability is also influenced by factors such as local median income levels, employment opportunities, and the overall cost of living. In addition, properties tend to go pending within an average of 49 days, making it a fast-moving market.
Investors have many reasons to consider Reno real estate, including the potential for rental income from the city's growing population, the chance to take advantage of a strong economy with numerous job opportunities, and the possibility of diversifying their investment portfolios with a range of property types, from single-family homes to multi-unit apartment buildings. The city's thriving tourism industry, with numerous entertainment options, including casinos and music festivals, also presents opportunities for investors to benefit from short-term rental income.
Here are the top reasons to consider investing in Reno real estate:
Strong Economic Growth:
Reno's economy has seen a significant boost in recent years, with job growth outpacing the national average. The city's diverse economy includes industries such as healthcare, technology, logistics, and manufacturing, which have all seen growth in recent years. This economic growth has resulted in increased demand for housing, making it an attractive market for real estate investors. Moreover, the city is a hub for tech startups and small businesses, which are continually looking to expand and hire.
Affordable Housing Market:
Despite the average home value in Reno being over $500,000, it is still relatively affordable compared to other western cities such as San Francisco and Seattle. This affordability has made Reno an attractive destination for people looking to relocate from more expensive areas, increasing demand for housing and presenting opportunities for real estate investors. Additionally, the city has a wide range of housing options, from single-family homes to condos and townhouses, allowing investors to diversify their portfolios.
Favorable Tax Environment:
Nevada has a business-friendly tax environment, with no state income tax and relatively low property taxes. This favorable tax environment can be beneficial for real estate investors, as it can increase potential returns on investment. Moreover, the state's tax structure is favorable to businesses, making it an attractive location for corporations, which can result in increased demand for housing.
Tourist Destination:
Reno is a popular tourist destination, attracting visitors to its many attractions, such as Lake Tahoe and the Reno Air Races. This tourism industry can provide a stable source of income for real estate investors through short-term rentals and vacation homes. Furthermore, the city hosts several events and festivals throughout the year, such as the Reno Rodeo, Hot August Nights, and the Great Reno Balloon Race, which can boost the demand for short-term rentals.
Growing Rental Market:
As home prices continue to rise, more people are turning to rent as a more affordable housing option. This has resulted in a growing rental market in Reno, making it an attractive market for real estate investors looking to generate passive income. The city's growing economy and population growth also contribute to this trend, providing a stable demand for rental properties.
Proximity to Major Cities:
Reno's proximity to major cities such as San Francisco, Sacramento, and Las Vegas makes it an attractive location for businesses and residents alike. This proximity can drive economic growth and increase demand for housing, making it an attractive market for real estate investors. Furthermore, the city's location near Lake Tahoe and the Sierra Nevada mountains makes it an ideal destination for outdoor enthusiasts, contributing to its overall appeal.
Growing Population:
Reno's population has been steadily growing in recent years, with an expected growth rate of 2.7% by 2025. This population growth can increase demand for housing, presenting opportunities for real estate investors to capitalize on this trend. Additionally, the city's population growth is driven by both domestic and international migration, providing a diverse pool of potential renters and buyers for real estate investors.
