Reno-Sparks Home Prices Near Another Record High
We check the latest numbers, what the future holds...and if rising interest rates can cause the red hot housing market to cool off.
Great news for sellers, but a bigger challenge for buyers…as home prices here are still going up. Yes the expensive Reno-Sparks housing train is still rolling, with the latest median house price racking up another near-high. At Keller Williams Group One Realty, real estate agent Guy Johnson reads off the latest high number: "October's median sales price jumped up to $350,000."
Bad ol' supply and demand is still pricing so many out of owning a home in our town. The market has been stymied by a stubbornly low roster of homes on the market, and the hurdles that come with it: competing bids and higher prices. As Johnson told us, "Our inventory levels are very low. They just fell again in October."
Guy Johnson is a long-time analyst who’s been studying the local market for over a decade and posts historical data reaching back 19 years on his “Reno Realty Blog” website. He gave us the latest MLS numbers just out. The October 2017 median sales price of $350,000 is a 4.2% increase over September, and just $10,500 under the all-time high set in January 2006. And would you believe home prices have doubled in just five years?! We're approaching a high-flying sold average of $200 per square foot.
But interest rates are going up. Home buyers have had ultra-low rates on their side, but those are disappearing in the rear view mirror. They've been rising, and economists predict mortgage rates will continue to climb next year. Today, the average rate on a 30-year fixed-rate mortgage is at 4.13%…about where it was in 2014. Johnson told us, "I expect interest rates to rise as well. We've seen that already over the last couple of months." But he doesn’t expect that to lower home prices…he says the economy is too good.
So are home prices going to keep increasing? You'd think we'd be hitting a ceiling, but he says…not yet. Healthy job numbers and rising home buying demand look positive. Reno's housing market is still hot. As he put it, "Sales are robust, even with these prices, and prices are up almost 13% over last year. So it doesn't seem to be deterring sales at all."
His prediction of what the Reno-Sparks median home price will be one year from today? Up another $30,000 to $380,000. "Again, it's the lack of inventory. We have the buyer demand and lack of inventory, and that's pushing the prices up."
That's over the all-time high set in 2005, making 2018 an even more challenging year for home buyers. Yes, a house is still a great investment…if you can afford one.