Courtesy Sierra Nevada Realtors
The median sale price for homes in Reno-Sparks in July was $574,475.
With 30-year fixed mortgage rates hovering steadily below 7 percent, prospective homeowners in Truckee Meadows are choosing to remain, which has led to a shortage of for-sale inventory in the residential area.
According to mortgage lender Freddie Mac, the average mortgage rate for a 30-year home loan was 6.96 percent in mid-August, a slight increase from the beginning of the month, though lower than last fall’s recent high of 7.08 percent.
Higher interest rates create additional financial burden for home buyers in the form of higher monthly payments, while also reducing their overall purchasing power. As a result, many potential home sellers – especially those who have turned down low-interest rate home loans during the COVID-19 pandemic – are sitting on the sidelines as they cannot sell and buy homes with comparable interest rates. Can
However, higher interest rates are a whole new playing field, said Sarah Sharkey, president of Sierra Nevada Realtors and broker-salesperson for Re/Max Professionals in Sparks.
“Interest rates definitely make a difference to sales volume; However, we are not going back to 2 and 3 percent interest rates – it is not happening; It’s a thing of the past,” Sharkey told NNBW during an interview last week. “When this was happening, our economy was in the midst of Covid. The economy has changed, and it’s still a good time to buy a home.
sarah sharky
“(Interest rates) really affect the sellers, because a lot of them have a rate of 2 or 3 percent, and they try to find something similar, but when they look elsewhere they find the same interest rate. Can’t use. What we have seen is that a lot of sellers are stuck, and this has reduced the for-sale listings for buyers to see.
There were 509 new listings in July, bringing the total active listings in Truckee Meadows to 772 homes. That’s about 1.8 months’ supply, Sharkey said. Six months’ inventory is considered a balanced sales market.
“We haven’t seen six months’ worth of inventory for some time now and I don’t think it will happen in the near future,” he said. “We still have buyers out there, but they’re taking[inventory]so fast that we just don’t have it.”
Many home buyers have reluctantly adapted themselves to the new normal. According to SNR, there were 428 closures in Washoe County (excluding Incline Village) in the month of July. That’s down 3 percentage points from June, but almost a full percentage point higher than the same month in 2022.
“Interest rates go up and down; We’ve seen it,” Sharkey said. “Obviously, you want to buy when interest rates are low, but we cannot control that. It is still great to have your own home, so this is a good time to buy it.
Sharkey said the median sale price for homes in Reno-Sparks in July was $574,475. As summer ends and northern Nevada enters the sharp fall and holiday months, sales volume, as well as average prices, are expected to decline slightly. The summer months are historically the busiest time of year for realtors and agents because it’s easier to move homes when kids are out of school as well as attend another school, Sharkey said. Wet weather is also usually not visible on the horizon.
Market days have seen a significant change compared to the frothy sales days of 2020 and 2021, when homes were often sold the same day they were posted on the multiple listing service. The current average days at market is three weeks, compared to only six or seven days last year.
“A year ago (2021) it was like 15 minutes,” Sharkey said. “You put it on (MLS) and it’s gone. Homes stay on the market a long time, but don’t be surprised if you look, come back and the home you want is pending. Even though market days are longer, it’s true for all properties – the home you want could be gone in two days.
Courtesy Sierra Nevada Realtors
The median sale price for homes in Reno-Sparks in July was $574,475.
Sharkey said the higher median home prices in Greater Reno-Sparks are causing more buyers to look to outlying communities like Fernley and Fallon, as well as Carson City, where median prices are significantly lower. According to Sierra Nevada Realtors, the median sale price for homes in Fernley in July was $375,000, compared to the median sale price for Lyon County as a whole of $424,495.
“If you’re willing to drive a little further, you can still find a really nice house there,” Sharkey said.
Meanwhile, in Churchill County, the median sale price in July was just under $370,000. This is 1.6 percent less than June and 7.5 percent less than the same month in 2022. In the city of Fallon, the median sale price was $325,000. The problem, Sharkey said, is that there are only 26 homes available for purchase in Fallon, down 67 percent from the 2022 number.
Carson City saw 55 home sales in July for an average price of $510,000. Sales volume rose about 2 percentage points from June, and pricing rose about 4 percent. There were 60 home sales in Douglas County in July, down 15.5 percent from June but up nearly 18 percent from the same month last year.
The playing field is not expected to be leveled anytime soon – the Federal Reserve plans additional interest hikes for the latter part of 2023. The fed funds rate is expected to remain at 5.6 percent at the end of the year. However, it is expected to return to the 4 per cent range in 2024 and to the 3 per cent range by 2025.
Source: www.nnbw.com
