Reno-Tahoe Real Estate Market Update | December 2023

 

Real estate activity in the Reno Tahoe area began its seasonal taper in November posting 262 residential transactions. This represents a 12% decline month-over-month, a trend that is very typical for this time of year.

 

 

Traditionally sales will remain steady through year-end then drop meaningfully in the first two months of the year before beginning to gain momentum at the end of Q1 into Q2.

 

Notably, November 2023 lagged the same period a year ago by almost 9% yet the total dollar volume rose by 1%. This was driven by a meaningful spike in premium home sales that included 34 greater than $1 million, 8 greater than $2 million, 5 between $3 million – $5 million, and one exceptional property on over 6 acres that sold for $5,200,000.

 

The circumstances of the market seem to be steady pricing for great homes but an unrealized decline for homes that require forms of deferred maintenance in price points more sensitive to high interest rates. This relatively slow period for transaction quantity gives outsized weight to these premium transactions and demonstrates pricing stability that may not be entirely representative of the overall market performance.

 

 

 

While the quantity of seven-figure homes has fallen year over year, the overall share of homes selling for greater than $1 million has reached an all-time high at 12% of all residential transactions.

 

 

Active listing inventory similarly tapers this time of year. The number of properties currently for sale has dropped below 1,000 for the first time since March and sits nearly 400 units below the same period a year ago.

 

The prevailing sense of a rate cut in 2024 is proving an accelerant to equity markets in recent weeks and months. Real estate is likely to be a lagging indicator, in that the purchase activity will likely follow such an action. Nonetheless, any relief for purchasers that drives interest rates below 7% will likely be stimulating the local market where expressions of demand remain high. Should demand accelerate, more supply is likely to loosen up simultaneously as today’s crop of reluctant sellers find motivation to liquidate.