Reno-Tahoe Real Estate Market Snapshot - April, 2012
Welcome to the April, 2012 market update. There are a few key observations that I want to point out for this month's report. If you are actively buying or selling a home now, you may be familiar with some of these conditions; if you are not, this may be helpful for your near term plans. See below:
- Inventory Levels - The local markets have become short on inventory. For the last 3-4 years, January would mark the low water mark for inventory for that year. In those years past, the inventory levels would rise from between 100 to 200 homes by April (August is historically the peak month for inventory). This year, we are seeing the inventory levels DROP slightly from January to April in some local markets. This condition is making it increasingly more difficult to buy homes at the lower price levels without having to compete with other buyers. Another important point that is related to inventory (as tracked in The Greater Reno-Tahoe Real Estate Report) is that the inventory count includes all homes that are currently AVAILABLE as well as those homes which are in escrow (PENDING) but have not yet closed escrow. The inventory is tracked in this manner to provide a more statistically accurate view of the market as tied to the "Months of Inventory" tracking. To further illustrate the "tightness" of inventory, the Reno market currently has an inventory of 1,900 homes (active AND pending). The inventory of ONLY ACTIVE listings is 612 homes or 32% fo the total. This ratio is also heavily impacted by short sales which will be in a PENDING status much longer than other sale types and will likely become an increasingly larger share of the market (see AB-284 below).
- A View from "The Trenches" - So, just how are the numbers mentioned above translating to activity in the real estate trenches? Home sellers are able to experience a break from the multi-year price decline and the need to lower prices ahead of the downward price trend in order to get their homes sold based on buyers having to 'jump on' new listings in order to secure an accepted purchase offer. This condition which is an indicator of a market reaching a bottom, started at the lowest price ranges where, of course, there are more buyers competing for property. The activity is currently moving "up the price curve" and is now comfortably in the range of $200,000 to $250,000 priced homes in the Reno/Sparks market which have a current median price in the $140-150K range. I listed a home in Sparks last week in the $225,000 range and, after two full days on the market (one day was Easter Sunday), there were three offers - the home was under contract within three days! Will this last? Are we at an absolute pricing bottom? It is a bit premature to declare that we have reached a bottom and there are still some big factors in the real estate market relating to foreclosures and short sales (see below), but it certainly feels like we are at or near a bottom, for now...
- AB-284 (Assembly Bill 284) Update - For more background on Assembly Bill - 284, feel free to reference previous blog posts (November 2011 Market Update). For this month's update, (courtesy of the Ticor Title Washoe County Housing Statistics Summary) the trend continues. Notice of Trustee Sale count continues to trend down in a meaningful way which likely indicates those properties with a Notice of Default filed and making their way through the foreclosure process are beginning to dwindle; and 2) REO Listings while trending down slightly are not materially different than where they were one year ago. If the current trends continue (and banks do not begin releasing significant amounts of shadow inventory properties), the REO Listing count will likely begin its descent during the 2nd quarter of 2012. Of course, if this does happen, the competitive nature in the market for buyers will further increase!
Below is a brief summary of each local market with year over year details:
- Reno - During March, home sales were up 3% from March, 2011 - 361 homes sold. March's median sold home price was $149,000 - 7% below March, 2011 but very consistent with the flat trend line over the last 12 months. Reno Months of Inventory for April is at 5.2 months - 23% lower than April, 2011 - and a clear indicator that, if the drop continues, we will begin to see some price appreciation.
- Sparks - Sparks homes sold in March totaled 163 (up 7% from one year ago March sales); median home price equals $152,247 - down 8% from Spark's median home price of one year ago. Months of Inventory for Sparks is at 4.7 months, 25% lower than April, 2011 which is consistent with the market experiences mentioned earlier in this blog post. Home inventory levels for Sparks (and Reno) are also trending down (in the 2-17% range monthly) from levels of one year ago.
- Carson City - There were 54 homes sold during March, 2012 which represents a 15% increase from March, 2011. Carson City's median home price was $145,500 in March - down 14% from prices a year ago and virtually the same as the February median price. At 6.1 Months of Inventory, Carson City's key metric of buy/seller market is down 28% from one year ago and has been constant at 6.1 months for 4 months running.
- Carson Valley - Homes sold in March 2012 totaled 60 - a 20% increase over March, 2011. The Carson Valley median home price at $177,500 is 12% below March, 2011. At 7.4 Months of Inventory (down 6% from the same time one year ago), this market is moving closer towards more stable pricing but is likely still a ways off compared to other local markets in the region. This being said, however, there is clear competition among buyers in the lower price segments of this market as well.
- Lake Tahoe - With 12 homes sold in March, the Tahoe market (Douglas County only) was 140% higher than the March, 2011 sales volume. It is significant to point out that Tahoe had an unusually high volume of distressed sales (REO and short sales) in March - 7 in total. Months of Inventory, at 16.9 months, is 46% higher than April, 2011. The median home price was $434,950. Due to the small sampling size of homes sold and the wide range of home prices at Lake Tahoe, the median price shows wide fluctuation on a monthly basis.
- Dayton - Dayton home sales in March, 2012 totaled 33 homes - 3% less than what sold in March, 2011. Months of Inventory is at 5.5 months - 28% lower than one year ago. Dayton median home price, at $88,900, is down 32% from one year ago. Dayton inventory levels are also trending down to levels not seen since late 2009. The Dayton median home price represents a new low in this market cycle; the last low price was in October, 2011 at $92,900.
- Fernley - The median home price for Fernley in March, 2012 was $71,250 - a 25% decrease over the median Fernley home price in March, 2011. This median price of $71,250 does represent a new low (last new low was last month at $74,000) for the current market cycle (2005 to current). Fernley saw 40 homes sold representing a 23% decrease over March, 2011. Months of Inventory is at 4.9 months and now in the range with Reno and Sparks. Based on affordability, months of inventory, and what we are seeing in Reno/Sparks, I would expect the median price quickly return to the mid $80K range and stay there, if not increase shortly.
If you want more details and the color charts used to prepare this blog post, you can see the full version of The Greater Reno-Tahoe Real Estate Report on our web site. It is available in a PDF file format for viewing/printing and is free!
If you would like to be notified of future versions as they are published monthly, you can subscribe in a few different ways. Pick the most convenient way below:
- Email Notification - Complete the The Greater Reno-Tahoe Real Estate Reportsubscription form on our site and you will be notified by email. NOTE: if you received an email notifying you of this month's report, you are already subscribed and do not need to do anything.
- Google Plus - Visit CalNeva Realty on Google+ Follow us!
- Twitter - Follow CalNeva Realty on Twitter.
Have a question or comment on market conditions? Leave a comment below or post up on your favorite social media site and I'll answer and/or publish your comment for others to see and/or learn from!
Broker - CalNeva Realty