Nevada Home Prices Rise, Sales Slow

The median price for an existing single-family home rose modestly in the Nevada housing market, but sales dropped during the first quarter, according to a report obtained Wednesday by the Reno Gazette-Journal.

The median price was $315,000 in the Reno-Sparks metropolitan area during the first three months of 2007, up from $314,250 during the fourth quarter, according to the report by the Northern Nevada Multiple Listing Service.

The median price was down 9 percent compared with the first quarter of 2006, said the report that does not count new home sales.

However, sales recorded by the MLS dropped from 929 in the fourth quarter to 830 in the first quarter, a sign that the local real estate market has not fully recovered from last year’s slide and Nevada mortgage demand is lacking.

“I think we have seen the worst,” said Tom Cargill, economist at the University of Nevada, Reno. “I think 2006 was the most difficult year, but 2007 is going to be lackluster at best.

“Sales are likely to remain flat or go up or down a little. I don’t see them plummeting. House prices are likely to stabilize, and they could come down a little more because there is still a considerable volume of inventory out there.”

The Reno-Sparks Association of Realtors, in a separate report Wednesday, said the median for single-family homes was $308,000, up from $305,000 in the last three months of 2006.

That report also said sales slipped, from 1,108 in the fourth quarter to 972 in the first quarter.

The association said the mortgage loan numbers vary from the MLS because it is implementing more data from the Washoe County recorder’s office, which it hopes provides a more accurate picture because it will have a larger sample size.

Association president Dennis Wilson, an owner of Reno-based Best Properties, said the contrasting numbers between the amount of sales and median price is a product of people coping with an uncertain market.

“We have the median price going up, and at the same time you’ve got sales down because people are still sitting on the sidelines,” Wilson said. “People are wondering what is going to happen. You have the subprime market that has imploded and a lot of people I’ve talked to are just scared to purchase because they don’t know what’s going to happen.”

For the local market to fully recover, it must overcome a rising foreclosure rate, fueled by failing bad credit mortgage loans, and housing prices that still are relatively expensive in the area, said Ken Wiseman, owner of Reno Rancho Realty.

“A lot is highly dependent on how the subprime fallout comes about,” he said. “And the house prices don’t meet the wages. Until we see that equal out, we are just going to be flat.”
Wiseman added he is “optimistic” sales will improve in May and June.

The number of listings for existing single-family homes on MLS increased to 3,442 during the first quarter, up from 3,278 in the fourth quarter but well below the nearly 7,000 homes listed at its peak in 2006.

But inventory increased in every month during the quarter compared with the month before, according to the report. If that trend continues along with sales decreasing, a glut of homes could once again hit the market.

“You are seeing fewer houses for sale, but still a lot of inventory out there,” Cargill said. “That’s why I think prices are still soft.”