Millennials entering prime home-buying years. Work-from-home professionals craving more space. Record-low interest rates. This confluence of events drove home prices up in every corner of the U.S. during the third quarter, as the pandemic boosted activity in a way not seen in decades.
All told, in each of the 181 metro areas tracked by the National Association of Realtors, the median price for existing homes, which make up most of the housing market, was higher in the third quarter from a year ago.
This, according to NAR, marked the first time since 1980 that every metro area tracked by the association posted an annual price increase in the same quarter.
In Northern Nevada, the Reno-Sparks region (which includes North Valleys and Spanish Springs) saw its median sales price rise 13.7% in Q3 compared to last year, according to NAR.
“For sellers, the real estate market is sizzling,” said Jieli Mao, realtor at Ferrari-Lund in Reno.
And it’s showing no signs of cooling down.
In October, the median sales price for an existing single-family home in Reno-Sparks was $455,000, a 3.4% uptick from September and nearly a 14% increase from October 2019, according to the Reno/Sparks Association of Realtors’ October report.
“The median price is consistently increasing,” Erika Lamb, president of the RSAR, told the NNBW. “The demand doesn’t seem to have slowed down — we’re selling more units this year than what we saw last year.”
No area has seen stronger demand throughout the pandemic than the Reno submarket (sales of which include the North Valleys). There, the median home price shot up to a record high of $485,000 in October, a 5.4% bump from September and a 17% jump from last year.
In Sparks (including Spanish Springs), the median home price was $412,000, an increase of about 13% from last year and a dip of less than 1% from the previous month.
Meanwhile, Fernley’s median sales price rose to $318,000, up 21.6% from October 2019 and 10.6% from September 2020.
‘I’VE NEVER SEEN THAT UNTIL THIS YEAR’
As a whole, the region had 616 sales of existing single-family homes in October — a 9.4% increase from last year. RSAR’s October report showed sales volume was down 11% from September, when 680 homes were sold.
The decrease is sales, however, does not come as a surprise to Lamb and Mao. With demand continuing to build, both noted that the COVID crisis has aggravated the housing market’s longstanding lack of supply, creating a historic shortage of homes for sale in Northern Nevada and beyond.
“Our inventory is only about two weeks for the Reno-Sparks market — I’ve never seen that until year,” Lamb said. “Right now, the average (inventory) is about two to three months. In a healthy market, your inventory should be about six months.”
Lamb and Mao each pointed to the fact that many potential sellers are keeping their homes off the market for pandemic-related reasons. Others are holding onto their homes, waiting the right time to sell while prices keep rising.
“We’ve got more buyers than we have homes,” Mao said. “I’m not surprised because of the shortage of inventory that we’ve been experiencing in the past.”
The shortage has pushed home prices higher, stretching the budgets of many middle-class and first-time homebuyers as competition spikes and bidding wars spark.
“For buyers, especially first-time homebuyers, you’ve just got to persevere and tough it out,” said Mao, noting she has a colleague at Ferrari-Lund who saw close to 30 offers on a single listing. “You’re probably going to make quite a few offers before you get your home.”
CARSON CITY, DOUGLAS COUNTY AND BEYOND
In the greater Carson City-Sierra region, the median home price in October was $412,000, down 7.8% from the previous month, according to market data on the Sierra Nevada Realtors’ website.
Still, the large four-county region — from Lake Tahoe to Fallon and in-between — is boasting a “hot” and “very competitive” market, SNR President Claudia Saavedra said in an email to the NNBW.
Perhaps no area is more competitive right now than the Nevada side of Lake Tahoe, where the median sales price for October was $1.485 million, a 23.8% leap from September.
Like Reno-Sparks, Carson-Sierra is experiencing the same trends driving demand across the region.
“The ability to work from home is allowing more buyers into the marketplace,” Saavedra said. “They can live where they want to live and still work. People that perhaps considered retirement have moved forward. Some are motivated by the desire to escape to the tranquility our area offers as well as the tax benefits.”
And with the lacking inventory and increasing demand forecast to keep the pace, the real estate market is expected to stay hot in 2021 in greater Northern Nevada.
“I feel the market will remain strong until we can see what policies may impact real estate, such as interest rates and a more plentiful supply of homes in comparison to demand,” Saavedra said.
Added Lamb: “As long as that interest rate stays right around where it’s at, I just don’t see Reno having any declines anytime soon.”