In the Reno-Sparks market as of this post there are only 204 single family homes for sale. In the under $500,000 price point there are only 56 homes. (Data source: NNRMLS) Yes, this represents very low inventory. To put things in prospective at the end of March 2021 there were 187 single family homes for sale compared to 716 at the end of March 2020. With these low inventory levels, low interest rates, low supply of new construction homes and high rents buyers will need to change their mind set during the home buying process.
Buyers May Need To Compromise – buyers typically have a list of must haves that they are looking for in their “perfect” home. Buyers may have to compromise on some of these things. Perhaps the home has some of the major must haves, consider that minor wants might be able to be added down the road. Buyers should set realistic expectations.
List Price – Value – Comparable Sales – in this market the list price is a moving target and prices are rapidly on the rise. In March 58.11% of all homes sold went over asking, with 68.99% going over asking in the $400,000-$500,000 price range. (Data source: NNRMLS) This is leading to the price of a property being a bit of a moving target. Buyers should work with their agent to determine the offer price, given the buyers financial position. There is not a set amount over asking but there is data available to see what the trends in a specific neighborhood and price ranges have been.
Offer Price and Appraisal – buyers need to be prepared to pay the price they are offer. The days of relying on an appraisal to ensure a buyer doesn’t over pay for a property are gone, for now. Sellers are looking for the buyer’s ability to pay the amount they offer regardless of the appraised value. An effective strategy in this market is to search below your max price point to allow room to offer higher and be able to pay any difference between appraised value and purchase price with cash.
Fierce Competitor – are you a fierce competitor? Are you persistent? Setting realistic expectations that the home buying process may take some time and there may be some emotional ups and downs. When there are 10 offers on a property there is one winner and 9 losers. This is tough for not only the buyers but your agent as well.
With these current market conditions it is more important than ever to engage the services of an experienced real estate agent. The Shocket Team brings over 17 years of experience to assist our buyers to understand the market and help them be as prepared as possible.