By Reno Tahoe Mountain Realty, January 6, 2024
Reno Tahoe real estate ended 2023 in much the same position as the year began. Despite over 3,600 residential transactions, median and average price are within 2% of 2022 totals, albeit on opposing sides while the standing inventory of available homes is identical to the number on January 1, 2023.
Nevertheless, numerous thresholds were achieved in 2023 generally attributable to a rising luxury class. Year over year, average price increased by 2% to $675,000 while median price dropped by the same 2% to $525,000. The delta between the two metrics indicates that a greater number of luxury homes sold for exceptional prices while more typical homes languished. This logic stands to reason amid rapidly rising interest rates that disproportionately impact entry-level buyers for whom leveraging into a purchase is most essential and affordability most compromised.
Over 500 residential transactions exceeded $1,000,000 in 2023; just the third year in which this threshold has ever been surpassed. This equated to 13% of all residential sales; the largest percentage on record. Similarly, 2023 equaled benchmark results from 2021 in the total number of transactions to exceed $2,000,000 and $5,000,000 respectively. Most notably, the first ever residential sales to eclipse $10 million within Reno city limits was recorded in August.
Addressing the broader segment of the market, a 2% reduction in median price despite a 17% reduction in the overall number of transactions is a signal of great resiliency; particularly when affordability was dramatically compromised by interest rates more than doubling in this period. $525,000 is still 10% greater than the median price for 2021 indicating significant equity for most Reno area homeowners.
Beyond the uncanny coincidence of having an identical number of listings on January 1st of consecutive years, the overall supply in the market is generally balanced. The market held around 1,000 listings throughout most of 2023 finishing with just above 900 amid a lull typical of the season. This equates to between 3-4 months of supply; an amount sufficient to give buyers options without putting much downward pressure on prices.
With the Federal Reserve forecasting multiple rate cuts in 2024, this is likely to be an accelerant on demand as housing become more affordable.
Wishing you all the best for a happy and healthy 2024.