As Demand for Homes Increase in Northern Nevada, so Do the Prices

Reno-Sparks isn’t a well-kept secret anymore, as the real estate market is showing a huge demand of people needing a place to live and new homes aren’t being built fast enough.

The Reno/Sparks Association of REALTORS (RSAR) released its 2017 fourth quarter sales report on home and condo sales based off of its findings from the Northern Nevada Regional Multiple Listing Service. It showed that 473 homes sold in the fourth quarter of 2017, a 15 percent decrease from last year in Sparks and Spanish Springs specifically. According to the report, the median sales price for an existing single family residence was $329,525, a 16 percent increase from last year and a slight increase from 2017’s third quarter sales.

Almost 150 single family homes were sold in December 2017 alone; 18 percent less than what was available the previous year. The median sales price for a residence last December was $335,000 – a 23 percent increase from last year. The median price for a condominium, townhome, or newly constructed home in 2017’s fourth quarter was $152,500, also slight increase from last year. In December 2017 alone, the average price for a condo was $146,450.

It’s pretty clear that the number of homes available is going down as prices are going up. “As we continue to see shrinking inventory, prices will hold their own or rise,” says RSAR Immediate Past President John Graham. “There is a 1.3-month supply of inventory in the Greater Reno area, including Sparks, which means that there have been no new listings and nothing for sale in that period of time. It’s really challenging for first time buyers right now,” he adds.

A few years ago the Economic Development Authority of Western Nevada (EDAWN) forecasted that 55,000 jobs would be added by the end of 2019, but Northern Nevada hit that mark at the end of last year. The rental market is pretty tough right now as well, as Graham suspects the vacancy rate is probably less than 2 percent.

“There’s not a lot to choose from in either market. People trying to rent are seeing the same kind of pressure as people trying to buy,” Graham says. “It’s a sellers and landlord market right now and as long as housing is scarce, prices will creep up.”

Chase International reported that in 2017 it sold 805 single family homes in the $200,000-$299,999 price range and 782 homes in the $300,000-$399,999 price range. Much like what the RSAR reported, there was a slight decrease in number of single family homes sold through Chase in 2017 yet the median price was higher for both single family homes and condos. In 2017, the median price of a home was $315,000 compared to $288,950 from the previous year (a 9 percent increase).

However, Chase reports that there were 25 more condos for sale in 2017 versus 2016 and the median price of a condo was $155,000 compared to $135,000 in 2016. Chase Realtor Gregg Moore attributes that to supply and demand and agrees that right now the inventory is low.

“The market is growing, there are more people who need homes,” he says. Moore says that the same thing is happening with rentals- leases are going up while inventory has stayed stagnant. “There is a ton of building going on so eventually it will catch up, but home builders can’t build new homes quick enough to meet the demand,” he adds.

Plenty of employment opportunities currently available in all of Northern Nevada and Sparks being one of the more affordable cities also leads to that low supply. Even though apartment complexes are being built over by The Legends outlets, Sparks Marina, and Victorian Square, Moore predicts that home and condo prices will go up 4-6 percent.

Chase Managing Broker Jenny Johnson agrees that real estate prices will continue to go up.

“It’s going to rise big time due to the continuation of technology and commercial properties. There’s nowhere else to grow in Reno so we’ll see those people flow into Sparks. This is the highest I’ve seen it in the last decade,” Johnson says. It seems that 2017 didn’t slow down at all and rental prices have also continued to rise.

Johnson’s advice for renters is to get pre-qualified for a mortgage. “Chase began working with the mortgage companies and taking them through the first time home buying process. A lot of renters can afford a house based on what the (mortgage) rates are right now. It’s so simple to get pre-qualified and see what’s available.”

Graham also suggested working with a realtor when trying to find a permanent place to live in Sparks.

“If you are trying to look for a house on your own you will have a hard time. You need to use a realtor that can check multiple listings several times a day. Even if you see a rental that you think would be okay, jump on it.”