August median sales price and other market metrics

[Ed. Note – I apologize for the absence of last month’s (July) market metrics. Personal and client commitments did not afford me the time to compile the stats and draft my regular monthly market report. I did, however, update the Historical Median Sold Data table. Additionally, I posted the market reports provided by the Reno/Sparks Association of REALTORS® (RSAR). You may find RSAR’s Market Report for July here. So, without further ado, let’s take a look at August’s numbers.]


After setting new highs in June ($381,950) and July ($389,000) the Reno-Sparks median home price pulled back sharply in August — coming in at $372,550 — a level we haven’t seen since earlier this spring.

August’s median sales price pullback represents a whopping 4.2 percent decline from July’s median sales price. Year-over-year, August’s median sales price is up 6.9 percent.

August’s median sold price per square foot (PPSF) also fell — coming in at $211.03/sq.ft., down 2.5 percent from July’s median sold PPSF of $216.37/sq.ft. August’s median PPSF is up 10.7 percent year-over-year.

Lack of available for-sale inventory continues its toll on the number of homes sold in the Reno and Sparks markets. Units sales in August totaled 542 homes sold for the month — down 4.1 percent from the 565 home sold in July. For perspective, consider that last year 720 homes were sold during the month of August 2017. Last month’s sales were down a whopping 24.7 percent year-over-year.

The good news is currently available inventory continues to increase. Presently 1,208 homes are available for purchase in the Reno-Sparks market. That number is up 4.7 percent over the 1,154 homes for sales this time last month. Year-over-year, the current number of available homes for purchase is up 26.9 percent.

Despite the gains in the number of homes available for purchase, less than one-third (30.1 percent) are priced at, or below, the current median sales price.

The persistent issue of lack of affordable homes for sale in Reno and Sparks continues to weigh on pending sales. Presently 790 homes are pending sale in the Reno-Sparks market. That number is down 5.7 percent from the 838 homes pending sale this time last month. However, seasonal factors are also at work here. Year-over-year, current pending sales are down 23.4 percent from August 2017.

August’s median days on market (DOM) came in at 57 days — an increase of four days over July’s DOM.

August sales by type, break out as follows:

  • REO sales: <1% – unchanged from July’s <1%
  • Short sales: <1% – unchanged from July’s <1%
  • Subject to Court Approval sales: <1% – down from July’s 1.8%
  • Relocation sales: <1% – unchanged from July’s <1%
  • Equity sales: 98% – unchanged from July’s 98%

August sales by price band, break out as follows in the table below…

Sales by Price Segment
sales price ($000’s) units sold cumulative % of sales
0 – 99 1 0.2%
100 – 199 7 1.5%
200 – 299 94 18.8%
300 – 399 213 58.1%
400 – 499 105 77.5%
500 – 599 44 85.6%
600 – 699 21 89.5%
700 – 799 18 92.9%
800 – 899 8 94.3%
900 – 999 9 95.9%
1M+ 22 100%
total 542

A whopping 22 homes sold for over $1,000,000 in August. Last year a total of 143 homes sold for over $1,000,000 — for an average of 12 per month. Thus far, year-to-date, 157 $1M+ homes sales have occurred. If this pace continues, 2018 will see well-over 200 sales of $1M+ homes. [ See related post: Reno, Nevada Luxury Home Prices Gain Momentum in First Half of 2018.]

August’s median sold price for houses and condos combined was $352,500 — down 2.9 percent from July’s median sold price for combined sales of houses and condos.

The table below contains the past 13 months of data…

Past 13 Months of Home Sales Data
Month Year # Sold Median Sold Price Sold Price per Sq Ft Median DOM # of Actives # of Pendings
August 2018 542 $372,550 $211.03 57 1,208 790
July 2018 565 $389,000 $216.37 53 1,154 838
June 2018 600 $381,950 $215.88 49 923 906
May 2018 574 $375,000 $209.04 49 725 920
Apr 2018 491 $374,000 $205.34 51 638 891
Mar 2018 548 $375,000 $200.88 50 529 814
Feb 2018 443 $370,000 $194.48 61 528 796
Jan 2018 405 $360,000 $191.42 68 514 782
Dec 2017 494 $345,000 $194.36 69 605 578
Nov 2017 534 $353,000 $197.03 61 767 713
Oct 2017 555 $345,000 $191.48 64 851 843
Sep 2017 613 $336,900 $194.62 59 925 889
Aug 2017 720 $348,450 $190.57 61 952 1,032

Note: The medians table above is updated on a monthly basis. The median home price data reported 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 – September 5, 2018. Note: This information is deemed reliable, but not guaranteed.

Related post: June median sales price and other market metrics

Click here for historical data back to 1998.

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Reno’s rents are the 3rd fastest rising in the country

Whoa! Reno’s rents are the 3rd fastest rising in the country, according to RENTCafé’s most recent Apartment Market Report.

From the RENTCafé report:

Reno, NV‘s housing crunch is worsening due to limited land development and high demand for rentals. Rents in Reno are the third fastest rising in the country, behind only Midland and Odessa. The average rent in Reno is $1,253 per month, a massive 11.3% increase year over year, or $127 more per month compared to the same time last year. The average rent in Reno was around $900 just three years ago but has jumped by more than $300 in 36 months, making it increasingly unaffordable for renters.

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

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RSAR Monthly Market Report for Reno-Sparks, Nevada – July 2018

The Reno/Sparks Association of REALTORS® (RSAR) has released its Reno-Sparks Market Report for the month of July 2018.

From July’s report…

“The Washoe County median price is at $389,000, which is up 10 percent compared to July 2017,” said Doug McIntyre, 2018 RSAR President. “This is a record high median price for the Reno/Sparks market. When you factor in pricing with the seasonal trend, I would anticipate that unit sales numbers may not reach 2017 levels.”

  • The July median price at $389,000 up 2% from June and up 10% from a year ago.
  • July unit sales at 555 are down 7% from June and down 17% compared to July 2017.
  • July new listings are down 13% at 690 compared to June and up 4% from one year ago.
  • The Reno market is a seller’s market, at 2 months supply of inventory. Months supply of inventory is the time it would take to exhaust the active inventory at the current rate of sales.

Click on the graph below to see the entire RSAR market report for July…

Related post: RSAR Monthly Market Report for Reno-Sparks, Nev. – June 2018

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RSAR Monthly Market Report for Fernley, Nevada – July 2018

The Reno/Sparks Association of REALTORS® (RSAR) has released its Fernley Market Report for the month of July 2018.

From July’s report…

“The Fernley median price at $252,500 is up 12 percent compared to July 2017,” said Doug McIntyre, 2018 RSAR President. “Year-to-date sales in Fernley are at a ten-year record high at 390.”

  • The median price at $252,500 is level with June and up 12% from July 2017.
  • Fernley’s unit sales at 53 are down 15% from June and down 9% from July 2017.
  • July new listings at 76 are down 5% from June and up 29% from July 2017.
  • The Fernley market has 2.1 months supply of inventory, a seller’s market.

Click on the graph below to see the entire RSAR market report for July.

Related post: RSAR Monthly Market Report for Fernley, NV – June 2018

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this past week…

Posted in headlines, News | Leave a comment

Reno, Nevada Luxury Home Prices Gain Momentum in First Half of 2018

Last month Realtor.com® published a report titled, Luxury Home Prices Gain Momentum in First Half of 2018.  In the report, Realtor.com® analyzed sales of luxury homes in 91 markets. I read the piece with interest because I expected Reno, Nevada to be mentioned. But Reno, Nev. was not mentioned, despite the phenomenal growth of its luxury market.
 
Adding to the mystery of Reno being conspicuously absent was that earlier this year Mansion Global published a focus piece on Reno, Nevada’s luxury market — using data released from, wait for it, Realtor.com®.  See Mansion Global’s Reno, Nevada, Luxury Prices Soar Amid General Housing Shortage.
 
It was only when I finished reading the report that I noticed a footnote that read, in part, “The following markets were excluded from rankings this month as we review their data: Washoe, Nevada; Lake, Ill.; Dallas; and St. Louis.” Ah-ha! So, Washoe County (hence the Reno, NV market) had been excluded from the Realtor.com® report.
 
Well, being the real estate agent and blogger I am, I decided to perform my own analysis on Reno, Nevada’s luxury home prices, and then to compare the results to what was found in Realtor.com®’s national analysis of 91 other markets. So, without further ado…

Methodology

Realtor.com®’s Luxury Home Index defines the luxury market as the top 5 percent of all residential home sales. So, for my analysis I will do the same.  I will be analyzing residential home sale data for 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.  And, finally, I will be analyzing sales from January 1, 2018 through June 30, 2018, and then comparing to the same time period of the prior year.

Luxury entry price point
 
As stated above, Realtor.com® defines a luxury market as the top five percent of home sales.  During the first half of 2018, 3,058 homes were sold. Five percent of that total is 153.  The 153 most expensive sales ranged from $890,000 to $3,550,000, and exhibited a median sales price of $1,195,000.
 
From the Realtor.com® report highlights: “In the 91 luxury markets analyzed, the entry-level price for luxury, measured as the top five percent of all sales, increased 4.6% year-over-year on average.”
 
The entry-level price for luxury in Reno-Sparks was $890,000 for the 1st-half of 2018.  The entry-level price for luxury in Reno-Sparks for the same time period in 2017 was $719,000.  Wow! 2018’s entry-level price for a luxury home in Reno-Sparks increased a staggering 23.8 percent year-over-year.

From the Realtor.com® report highlights: “The top five fastest growing markets are Sarasota, FL; Collier, FL; Queens, NY; King, WA; and Monterey, CA – all seeing 13-20% price growth year-over-year.”
 
Had the Reno-Sparks market data been included in the study, our local market would have taken the #1 spot for fastest growing markets.
 
Furthermore, looking at only luxury home sales, the median sales price in the 1st half of 2017 was $888,250.  The luxury median sales price during the 1st half of 2018 was $1,195,000 — an increase of a whopping 34.5 percent year-over-year!  To put that number in perspective, consider that if the same growth had occurred to the median sales price for the non-luxury home segment here (the other 95 percent), we’d be looking at Reno-Sparks’ median home price around $430,000 today.
 
 
Million-dollar sales
 
From the Realtor.com® report highlights: “Million-dollar sales in the 91 markets combined are up 25% over last year, the biggest jump observed since January 2014.”
 
From January 1st through June 30th, 2017, 62 homes sold for a million dollars or more in our market.  For the same time period in 2018, 114 million-dollar sales took place — representing an incredible 83.9 percent increase year-over-year! 
 
 
Time on market

From the Realtor.com® report highlights: “Luxury properties in most markets continue to sell faster than this time last year too, with the combined median age of inventory in the 91 luxury markets down 7 percent year-over-year on average.”
 
The median days on market of the luxury homes sales during the 1st half of 2017 was 139 days. The median days on market of the luxury homes sales during the 1st half of 2018 was 129 days. Median days on market declined 7.8 percent year-over-year; therefore luxury properties in Reno-Sparks continue to sell faster than this time last year too.

Driving forces

What is driving buyer demand for high end homes in Reno and Sparks? To help to answer this question, I sat down for a Q & A with Cristy Silverman, Certified Luxury Home Specialist of The Silverman Real Estate Team at Keller Williams Group One, Inc. in order to gain some insights.

Our conversation follows…

Guy: Cristy, you have been a licensed REALTOR® serving the Reno / Sparks luxury market for over 15 years. Thank you for joining me today.

Cristy: Thank you for having me. By the way, Iove your blog.

Guy: Thank you for that.
So, you’ve seen the current numbers for our luxury market, what is driving the phenomenal growth in buyer demand for high-end homes in Reno and Sparks, Nevada?

Cristy: There are several contributing factors. Reno / Sparks has been experiencing incredible economic and population growth. We have had an influx of tech companies to our area — Tesla, Switch, Google, Apple, and Panasonic, to name a few. The Tahoe Regional Industrial Center alone is expected to bring more than 100,000 new citizens to our area.
Additionally, our neighbors in California relocating here have been a big factor. In June, Forbes reported that California’s top income tax rate is now 13.3%, making it the highest state income tax rate in the nation. When you compare California’s income tax rate to Nevada’s no income tax, Reno as a relocation destination looks very favorable.
And, of course, our home prices can be much more attractive than much of California’s, particularly in places like the Bay Area.

Guy: And we have Lake Tahoe!

Cristy: Yes, we do. And you can’t top that!

Guy: Are you seeing higher pricing for pre-existing luxury homes in Reno and Sparks, or is the growth in the segment being fueled by new construction of luxury homes?

Cristy: Of the $1M+ home sales reported in our MLS, the large majority were pre-exisitng home sales. Only a small fraction was new construction. We do need to keep in mind, though, that not all new construction home sales are reported in the MLS.
Luxury home builders are actively building in our community again, which is nice to see, and we expect to see the number of new construction home sales rise.

Guy: In your opinion do you feel the growth we’re seeing in the luxury segment is sustainable?

Cristy: Yes, I do, for a few reasons. I recently read that in the past 5 years, over 18,000 people have left California for Nevada. I believe this trend will continue because the Proposition 30 income tax increase was originally set to expire in 2019. However, in 2016, the California voters extended this until 2030! Since January 1st of this year, 9% of the homes sold in Reno / Sparks have been purchased by Californians.

Additionally, I recently saw a report stating that for the past 5 years, real estate has outranked stocks, mutual funds, gold, savings accounts, CDs, and bonds as the best long-term investment among Americans.

Furthermore, the latest VeroFORECAST predicts real estate appreciation through May 2019 at a national average rate of 4.4%. Landing at #6 in their ‘top 10 markets’ list is Reno / Sparks at a projected rate of 9.5% appreciation.

Guy: Yes, I saw some of those stats too. Lots of signs pointing to continued growth.

And finally what advice can you give for today’s luxury home sellers and buyers?

Cristy: It is vitally important that luxury home sellers and buyers work with a REALTOR® who specializes in luxury home sales. I recommend the luxury consumer sit down with an agent they are considering hiring and then conduct an interview with her or him. Not only to see if there is a good match on a personable level, but also to determine if that agent has the experience and skill set needed to successfully negotiate on their behalf.
This is a business decision. Don’t be afraid to ask pointed questions. Such as, how many high-end transactions has the agent been a part of? How well does the agent know our luxury market and inventory? For example, currently our market has 189 homes listed at, or above $1M. How does that translate to months-supply of inventory in the luxury segment? Does the prospective agent attend broker open houses when new luxury listings hit the market?

Guy: Great recommendations, Cristy. I would like to thank you for your insights and wish you continued success.

Cristy: Thank you so much, Guy. To you as well.


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