The Market Is Tanking (I read it in the paper)

It was widely reported in April of this year that the median price for previously occupied homes in Reno & Sparks dropped by 1.6% in March of 2019 compared to the median home price in March of 2018. This represented the first year-over-year median price decrease since 2011 and many of us heard or read that the price drop may represent a harbinger of things to come. Over the past month I’ve heard a dozen or more people say, “I’ve heard the market is dropping”. I’m here to set the record straight.

This chart represents sold homes with at least 3,000 SF of living area and sales prices of $750,000 plus. Basically, our luxury real estate market. As you can see, the median price in this segment dropped by 3.5% YOY

This chart represents sold homes with less than 1,500 SF of living area and sales prices under $400,000. Of course, this is the most affordable segment of our market and the median price increased by over 2% YOY

This chart is provided by the Builders Assoc. of Northern Nevada. They’re touting a 10%+ increase in the median price of new homes YOY and these sales are rarely reported to MLS. Clearly the builders are cutting into the luxury home market. Take a tour of some of the high-end, new homes available now. You’ll see what I mean.

In conclusion, this isn’t a market drop, it’s a market shift. Sellers in higher price ranges should seriously consider the effect of new construction even if it’s not in their exact vicinity. Buyers looking for an affordable option and waiting for a big reduction in prices may have a long wait. The lesson is that if you’re looking for insightful information on the local real estate market you probably won’t see it on channel 4 or in the local newspaper.

Feel free to send me a note with any comments or questions: dan@nvhomeconnections.com