Let’s take a look at the year’s numbers for the Reno-Sparks housing market.
Residential home prices ended the year up 15 percent year-over-year. In 2017 the Reno-Sparks’ monthly median home price ranged from a low of $301,950 in January to the year’s high of $355,000 set in July. The 2nd-half of the year saw the median sales price bounce around a bit and finally end the year at $345,000 in December. [See chart below.]
The median sales price for the entire 12 months of 2017 was $337,000 – an increase of 10.5 percent over 2016’s 12-month median of $305,000. [See chart below.]
2017 home prices continued their upward trend since bottoming in 2011. [See chart below.]
What does 2018 hold in store for home prices? Most agree that continued increasing homes prices is likely. One estimate is that our market may hit a median sales price of $400,000 sometime in 2018.
Price Per Square Foot
2017 begin with a median sold price per square foot of $179/sq.ft. in January and ended the year with $200/sq.ft. in December. [See chart below.]
December’s median sold price per square foot was up 11.5 percent year-over-year.
2017 was another record year for number of homes sold. A total of 6,818 houses (excluding condos) were sold in 2017. This represents an increase of 3.6 percent over the 6,583 houses sold in 2016.
Sales by month exhibited the typical seasonality our market experiences. Sales numbered 364 for the month of January, and climbed throughout the first half of the year peaking at 763 units sold in June. The 2nd half of 2017 saw sales receding to end the year with 489 sales in December. [See chart below.]
2017 sales by price range breakout as follows…
Half of the homes sold in 2017 sold for more than $337,000, and half sold for less than $337,000.
With both sales price and units sold being up in 2017, not surprisingly, total volume was also higher than 2016’s. 2017’s sales volume of $2,667,849,842 was up 17.0 percent over 2016’s volume. Additionally, 2017’s sales volume sets a new record for the Reno-Sparks market — surpassing the previous sales volume record of $2,478,390,159 set in 2005 at the height of the housing bubble.
New Listings and Inventory
Another of the big stories in 2017 was inventory — or, should I say, lack of inventory. 7,209 houses were listed for sale during 2017. Compare that number to 2016 when 8,074 houses hit the market. That’s a 12.0 percent reduction in new listings in 2017 from 2016.
The chart below shows the seasonal active inventory by month over the past five years. Notice that 2017 is missing the spring and summer bump in inventory that is typically observed. That was due to drastic reduction in the number listings coming to market.
June saw the most number of new listings when 842 houses hit the market. [See chart below.] Then the number of new listings per month began trending downward after that and finished the year with only 292 new listings hitting the market in December.
With home sales being as strong as they were in 2017 [See Unit Sales above] and new listings diminishing to such low levels, available inventory was going to have to take a hit. And a hit it took.
Look at the dramatic drop in available inventory by month during 2017. [See chart above.]
Inventory levels held steady for the first half of 2017 around the 1,100 available homes each month, January through June. But after June inventory levels fell off the chart.
Which brings us to…
Months Supply Inventory (MSI)
With falling inventory levels, yet sustained strong home buyer demand, one of our favorite metrics, months supply inventory, experienced a similar decline throughout 2017.
Months supply inventory is defined as the time it would take to exhaust the active inventory at the current rate of sales. In the chart above, we see that in January there was a 3-month supply of inventory. By December, that number fell to a 1.3-month supply of inventory.
To lend some perspective to how low these levels are take a look at the 5-year MSI graph below. Our market’s current inventory is at a low level never seen before.
Inventory, or lack of it will be the biggest challenge facing the Reno-Sparks housing market in 2018.
Note, for a deeper dive into the inventory issues currently facing Reno and Sparks, Nevada check out these recent blog posts:
- Reno, Nevada’s Housing Shortage — How Bad Is It?
- Want to Buy a House in Reno-Sparks Built in the Last Ten Years? You’ll Need Half a Million
Conventional mortgages were used to purchase the majority, nearly 55 percent, of houses in 2017. Cash sales made up 18.2 percent of 2017 house purchases. The means used to purchase in 2017 breaks out as follows…
1Other includes: assumption of existing mortgage; contract of sale; owner carry financing; etc.
Note: for a closer look at cash sales in Reno and Sparks market, see Cash sales in Reno and Sparks – January 10, 2018
Comparing 2017 and 2016 house sales…
|median year built||1998||1998|
|average year built||1991||1990|
|median size||1,864 sq.ft.||1,821 sq.ft.|
|average size||2,060 sq.ft.||1,992 sq.ft.|
|median lot size||0.18 acre||0.17 acre|
|average lot size||0.65 acre||0.52 acre|
|median sold PPSF||$187.27/sq.ft.||$170.69/sq.ft.|
|average sold PPSF||$191.49/sq.ft||$174.65/sq.ft|
|median sales price||$336,746||$305,000|
|average sales price||$391,295||$346,460|
What other housing metrics would you like to see? I have the means to report on a variety of data provided by our local MLS. Let me know what you’d like to see, and I will be happy to report on it.
And, as always, thank you for reading the Reno Realty Blog.
Note: The home price and other data reported above covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. Residential data includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – January 10, 2018. Note: This information is deemed reliable, but not guaranteed.