polo blue for women Median price just hit an all time high
Reno’s nightmare housing crunch just got worse for home buyers.
Residential real estate in the Biggest Little City pushed further into seller’s market territory in July after Reno surpassed the high water mark it set in the previous housing boom.
The median price for an existing single family home in the city of Reno soared to $387,250 in July, according to the latest numbers from the Reno/Sparks Association of Realtors. The number is for stick built houses and does not include townhomes, condominiums, manufactured and modular properties.
The $387,250 median price is just for Reno and does not factor in Sparks. The price represents an 8 percent increase from the previous month of June and a 17 percent jump from July of last year. The number is also significant because it sets a new record for Reno. The previous high was $380,000, which was reached on January 2006, according to numbers provided by the RSAR to the Reno Gazette Journal as part of a data request made earlier this year.
Buy PhotoA look at a decade worth of median sales price trends for the Reno Sparks housing market from the bubble to the recession and after. (Photo: RSAR/RGJ research)
Reno’s record median home price represents a classic good news, bad news scenario for residents.
For homeowners who saw their property values tank during the recession, the recovery in housing means more equity and flexibility with their mortgages. The combined median price for a single family home in Washoe County, not including Incline Village, bottomed out during the recession at $135,000 in January 2012. As more homeowners get more equity in their homes, it should energize the move up buyer market, which was hit quite hard during the recession.
“If you’re still $50,000 down on your home, then you’re not looking for the next place up that costs more money,” said John Graham, RSAR president. “People can at least have thoughts now that it could be possible to move up.”
This includes residents in Sparks, which also saw a jump in median price in July but has yet to eclipse the record it set during the housing bubble. The median price for a single family house in Sparks was $315,000, which is up 5 percent month over month and year over year. The median price record for Sparks is $335,000, which was set on July 2005.
The combined median price for the greater Reno Sparks metro areain July was $357,500, which is just 2 percent below the record of $365,000 set in January 2006. It is quite possible, though, that Reno Sparks could break that mark this year as well, Graham said.
The rising median is good news for sellers, especially investors who bought at or near the bottom of the market and are now looking to cash in on their properties. Buyers, on the other hand, will continue to have a tougher time finding homes at an affordable price point.
After going through the toughest recession in its history, Northern Nevada has seen its fair share of economic development victories. That number is now about $300,000 and below, making it a tougher proposition for new home buyers. In order to comfortably afford a $318,000 house, for example, a household ideally needs a median income per $70,000 per year with a 10 percent down payment. The current median household income in Reno is $55,423 according to consumer research company ValuePenguin.
Housing supply in July, meanwhile, is at 1.6 months, an improvement over June’s 1.4 months but still far below the six months typically seen in a balanced market, Graham said. The gap between new home listings and closed sales is also starting to narrow, putting further pressure on supply. About 75 percent of inventory in the market is under contract, according to Graham. Listings are also down 15 percent year over year, he added.
“Things have fallen off a cliff,” Graham said. “We’re selling more homes than we have inventory (entering) the market.”
Unit sales continued to be strong in July even as supply remains constrained compared to demand. Reno Sparks reported 627 units sold in July, which is up 4 percent from the same period last year. The number is down from June’s 736 units the most ever sold in a month in the area, according to RSAR. The dip represents the “typical seasonal drop” seen during this time of year, Graham said.
The area also remains on pace to set another record, according to Graham.
“If this trend continues through the end of the year, it will be another record year (for unit) sales,” Graham said.