RSAR: ‘Historic’ low inventory to boost Reno house prices in spring, summer

Reno-Sparks house hunters could be in for another hectic home-buying period in the coming months as low inventory and increased buying activity is expected to push pricing upwards starting in the spring.

The area saw the median price for existing homes shoot up by nearly 14 percent last year from $279,000 in January 2016 to a peak of $317,600 in July before slightly dipping and leveling off for the remainder of the year. At the time, the skyrocketing appreciation from the “boomerang market” fueled concerns about housing affordability.

LOOK BACK: RENO-SPARKS’ 2016 BOOMERANG MARKET

This year kicked off with median pricing in January up by about 9 percent from the previous year at $304,000 based on the latest numbers from the Reno-Sparks Association of Realtors.

“It’s important to note the market begins to heat up in the spring,” said John Graham, RSAR president, in the organization’s latest monthly housing presentation. “With inventory levels at historic lows, we anticipate there will be more upward pressure on median sales price as the weather warms.”

The question now is by how much. Last year, some home buyers frustrated with the rising prices and strong competition in the existing home market ended up buying new homes instead.

Even new houses should see competition though as the Reno-Sparks economy continues to recover from the recession and more new jobs appear in the market. At a recent event by the Economic Development Authority of Western Nevada, EDAWN President and CEO Mike Kazmierski said that the gap between new jobs coming to the area and available new housing was widening.

Developers are trying to respond with new projects. This includes the Bailey Creek Estates project near Geiger Grade, which saw pushback from some area residents who voiced concerns about its impact on such issues as traffic and flooding. The City of Reno Planning Commission will also hold a meeting on March 1 at City Council Chambers about the proposed Caramella Ranch Estates south of Damonte Ranch High School. The project is eyeing about 935 new houses for the area.

Tight supply continues to affect unit sales for the existing single-family home market. Reno-Sparks sold 358 existing homes in January, which is down 7 percent from the same period last year. Reno-Sparks averaged 364 units sold in January during the last five years. The area also added 364 new listings during the month, down 25 percent from January 2016.

The slower sales pace, however, brought up inventory supply to four months from 3.1 months in December. Reno-Sparks continues to be in a seller’s market, with supply hovering between 3.1 and 4.7 months in the last year.

Reno continues to lead the area in pricing with a median of $320,000 in January, up 2 percent from the previous month. Sparks reported a median price $279,000, up 3 percent from December. The median price in Fernley, which is not included in the combined Reno-Sparks region numbers, was $208,140, up 8 percent from the previous month.

BY THE NUMBERS

A look at the real estate numbers for the greater Reno-Sparks area in January 2017:

RENO

• Median price: $320,000, up 2 percent from December and 7 percent from January 2016
• Unit sales: 227, down 35 percent from December and 6 percent from January 2016

SPARKS

• Median price: $279,000, up 3 percent from December and 7 percent from January 2016
• Unit sales: 131, down 25 percent from December and 8 percent from January 2016

FERNLEY

• Median price: $208,140, up 8 percent from December and 21 percent from January 2016
• Unit sales: 36, down 18 percent from December and up 9 percent from January 2016