The Washoe County housing market showed signs of life from April to May, spurred by sales of new single-family residences and condominiums.Sales of new single-family residences saw an uptick of 4.7 percent in May from the previous month, according to the latest housing sales report from the University of Nevada, Reno’s Center for Regional Studies.New condominiums reported a 95.3 percent increase in month-to-month sales.Despite the increase in sales of new single-family residences, home sales still were down 1.2 percent overall as sales of existing single-family homes dropped 4.2 percent from April to May. The median sales price for new and existing single-family residences saw a slight increase of 0.3 percent to $300,000, fueled by a 2.1 percent increase in the median price of existing single-family homes.”There was a definite increase in new construction from April,” said Brian Kaiser, a housing and real estate analyst with the center. “Existing single-family home sales were down slightly in May from April, but median prices actually edged up 2 percent from the previous month — a good sign that the market is not free-falling to the bottom.”Total sales of new and existing condominiums also managed a 32.2 percent month-to-month increase, despite sales of existing condos being down by 29.5 percent in May compared to the previous month. The median price for new and existing condos in May was $190,320, an increase of 1.7 percent.Sales of new and existing single-family residences also remain significantly down from last year, reporting a 48.8 percent decrease. The median sales price for new and existing homes also was down 8.3 percent from last year’s price of $327,000.Sales of new and existing condos saw a year-to-year increase of 27.8 percent, driven by a 180 percent increase in new condo sales. In Reno, new condos reported 72 sales in May compared to 71 for new single-family homes. Median condo prices remained flat at $193,320, down 0.8 percent compared to last year.Overall, the numbers show that the area has not hit bottom quite yet, Kaiser said. But the report also shows some positive signs.”These numbers are certainly telling me that there is life in this market, and that the worst days are behind us,” Kaiser said. “I’d expect to see several consecutive months of increasing — or at least flat — sales rates before considering the market on the upswing.”The boost in new property sales is likely the result of ongoing efforts by builders to offer strong incentives to home buyers, said Wayne Capurro, president of the Reno/Sparks Association of Realtors. But although the sales of new properties are encouraging, sustaining those numbers will be difficult if the existing home market does not bounce back.”Prices have gotten too low, and I just don’t see how they can build these new houses and sell them without losing money, especially with the higher cost of fuel and everything else,” Capurro said. “The existing home market has to improve first.”The recent uptick in interest rates and unemployment, although slight, also is cause for concern because they still take some potential buyers out of the market, Capurro said. Short sales and bank-owned properties also remain an issue.Such properties account for 40 percent of inventory in the market but two-thirds of all sales, which should push down median sales prices for two to three more months as they go through the system, Capurro said.Given the number of bank-owned properties in the market, the slight increase in median sales prices in May comes as a surprise because experts were expecting continuous declines through the first half of the year, Capurro said. It also shows that the market might be close to the bottom, Capurro said.”I believe that we’re kind of bouncing along the bottom,” Capurro said. “We’re already seeing increased activity in the low- to moderately priced properties, so it appears the market is starting to heat from the bottom up. Even with the uptick in unemployment and interest rates, it’s still a relatively good environment for buyers. The affordability of homes hasn’t been better than it is right now in approximately five years.”
By Jason Hidalgo • jhidalgo@rgj.com • June 25, 2008