Reno’s years-long streak as an unbridled seller’s market appears to be losing momentum as the metro area topped the list of cities seeing the largest rate of listing price reductions in the country for homes on the market.
Reno ranked No. 1 among the 200 largest metropolitan areas in the United States for its share of sellers who are cutting prices on their listings, according to an analysis by Realtor.com.
The Biggest Little City saw price reductions on 32.6% of its listings, edging out second-place Austin, Texas, by just a fraction.
Reno also beat every city that made the top 10 for its median list price for homes at $677,500.
The number, which denotes how much sellers list their homes for, should not be confused with the median sales price, which tracks what an existing home actually sells for. The combined median sales price in Reno-Sparks in June was $600,000, according to the Reno/Sparks Association of Realtors. In the city of Reno, the median sales price was $635,000, which is an all-time high.
The price reduction trend coincides with a string of interest rate hikes this year. The higher rates, which are pricing a larger number of buyers out of Reno’s expensive housing market, are leading to more supply in the market as more buyers stay on the sidelines.
As more buyers pull back, homes end up on the market for a longer time, which is causing more sellers to slash prices in order to get a deal done, according to George Ratiu, Realtor.com senior economist.
The problem is especially magnified in markets such as Reno, which saw higher rates of home price increases compared to other cities, Ratiu added.
“Price cuts are hitting hardest in markets which have been on a hot streak during the pandemic—cities which saw an influx of buyers looking for quality of life, more space, and affordability,” Ratiu said in the Realtor.com analysis. “These are also markets which experienced a fast ramp-up in prices due to the inadequate supply of housing.”
Real estate agents in Reno are already advising sellers to temper their expectations when listing their homes. While Reno remains in a sellers’ market, homeowners are no longer in the same position of power they occupied just a few months ago when they could list their home for a high price and have several buyers competing right away.
“We’re also hearing that the Fed might raise rates a couple more times this year, which going to further help correct the market,” said Sara Scattini, RSAR president.
Unlike the last two years, sellers today are also more willing to work with buyers on things such as closing cost assistance or credit repair, Scattini added.
With the shifting momentum, buyers will have to price their home more competitively if they want to move it within a good time frame, according to Scattini.
Ratiu, who expects more markets to join the list of price-cutting metros, agreed.
“As the number of homes for sale grows, we can expect price reductions to become the norm, especially in high-cost areas,” Ratiu said. “For buyers, the change points to more opportunities in the months ahead, especially the fall and winter.”
Here are the top 10 markets that saw the largest rate of price reductions for home listings as well as their median list price, according to Realtor.com.
- Reno, Nevada: 32.6%, $677,500
- Austin, Texas: 32.4%, $620,000
- Phoenix, Arizona: 29.5%, $548,500
- Anchorage, Alaska: 28.5%, $436,000
- Boise, Idaho: 27.4%, $587,900
- Ogden, Utah: 27.4%, $580,100
- Sacramento, California: 25.2%, $642,500
- Colorado Springs, Colorado: 25.1%, $550,000
- Evansville, Indiana: 24.7%, $246,000
- Medford, Oregon: 23.2%, $562,500
Jason Hidalgo covers business and technology for the Reno Gazette Journal, and also reviews the latest video games. Follow him on Twitter @jasonhidalgo. Like this content? Support local journalism with an RGJ digital subscription.