With average rent in the Reno marketplace for an apartment at $1,258 according to Rentcafe.com, more and more buyers are looking to take advantage of low interest rates to make the move and become homeowners. We are getting a lot of calls from buyers who have very unrealistic expectations given current market conditions. Here are some of the facts about our market that buyers should be aware of.
Prices Are High – the median price was $450,000 in February, $485,000 in March and $494,500 in April. As of this post there were only 28 homes for sale in ALL of the Reno-Sparks area under $400,000. Inventory is especially tight in the lower price ranges with only 107 homes for sale under $600,000.
Competition Is Fierce – in April in the $400,000 to $700,000 price range 70-75% of homes sold closed over asking. This is a factor of multiple offers and buyers bidding over asking price for homes. There are simply more buyers than there are houses.
Shop Below Max Budget – buyers should plan on shopping below their max budget to allow for the ability to over bid. If you are on a very tight budget you will need to consider compromising on your wish list to open up more options.
Need Extra Cash On Hand – buyers should plan to have extra cash saved up to contribute to the purchase if offering over asking to make up the difference between purchase price and appraised value. This will help you compete with cash buyers.
Financing Type is Important – unfortunately with the very stiff competition we are seeing there is a very low number of FHA and VA offers being accepted by sellers. Sellers often have many offers to choose from and they will look to strong cash or conventional offers first. In April only 7.73% of sales were financed using FHA financing and only 4.86% were VA. Property condition also plays a role in the type of financing, as homes that have health and safety issues often times don’t qualify for FHA and VA.
No Repairs – When looking at homes, if the property condition is lacking, buyers need to understand that with multiple offer situations the seller is going to be looking for the offer that doesn’t require them to make any repairs. Buyers could be facing large repairs bills in the future if compromising on a property in poor condition.
New Construction – many buyers are looking to new construction as an alternative. New construction purchases have an entire different set of challenges including – lotteries, over bidding, waiting lists, long build times, rising costs due to lumber shortages, and more.
The Shocket Team has a goal to help every buyer that comes to us looking to buy, but we want to ensure our clients are educated and have the proper expectations. We don’t control the market conditions, but we can assist our buyers in being prepared and when the right home comes along making the strongest offer possible. Contact us today.