In late 2023, the housing market in Sparks, Nevada, began to slow down compared to nearby cities like Reno, Carson City, and Sunrise Manor. The market became less active in the last quarter of the year, leading to a noticeable decrease in home sales.
Falling Home Prices and High Inventory
As new homes were built and put on the market every day, home prices started to drop. This was because there were more houses available than buyers interested in purchasing them. Many buyers took advantage of the lower prices, but the high mortgage rates, which were nearing 8%, made many potential buyers hesitant to make a purchase. Buyers worried about the financial burden of high mortgage rates, which reduced home sales and slowed the market overall.
Price Drops Across Most Properties
High mortgage rates hit the Sparks housing market hard, just like many others in the U.S. While single-family homes saw a slight price increase (2.3%), reaching a median price of $517,000, the overall prices of residential properties went down by 1.7%, with a median price of $488,000. Condos and townhomes, in particular, struggled in the market. Even though there was some price growth, it wasn’t enough to keep up with the 3.7% inflation rate reported in November 2023. For investors, this means that selling a newly built home at the current market price might not even cover the costs of construction and maintenance.
Balanced Market Due to More Homes Being Listed
The market in Sparks became more balanced due to three main factors: an increase in new listings, fewer people moving into the area, and slower sales. By October 2023, there were 529 homes for sale, and this number increased to 602 in November. Not many people were looking to move to Sparks, with only 0.44% of homebuyers searching from outside the area. This led to more homes being available and fewer people competing to buy them. Earlier in 2023, Sparks, like many other cities in Nevada, faced a shortage of available homes. However, by the end of the year, the situation had changed, making Sparks a more buyer-friendly market. This shift attracted younger buyers, especially from Gen Z and millennials, who had avoided buying homes during the summer.
Challenges for Sellers: Making a Profit is Tough
Selling a home in Sparks became more challenging, with 36.8% of homes experiencing price drops and the sale-to-list price ratio at 98.2%. On average, homes stayed on the market for over 46 days before being sold. The increased competition from new listings forced sellers to reconsider their pricing strategies, especially since demand typically drops in December. Sellers who are entering the market now should be aware that buyers are cautious due to high mortgage rates and inflation. In this balanced market, buyers have more power to negotiate, and sellers might have to accept lower offers. Many investors who don’t need to sell immediately are choosing to wait until the peak selling months of March, April, and May.
Buyers Take Advantage of Market Cooldown
Despite the pressure of high mortgage rates, some buyers are still moving to Sparks, thanks to the cooling market, high inventory, and attractive city amenities. After years of a seller’s market, where buyers had to compete fiercely for homes, the market has finally shifted in favor of buyers. In October 2023, home sales in Sparks dropped by 14.1%, giving buyers a wider selection of homes to choose from and the opportunity to find better deals. With fewer buyers in the market, they can take their time to research properties, make informed decisions, and find a home that fits their budget.
Looking Ahead: Sparks, Nevada Housing Market in 2024
The future of the Sparks housing market may see a gradual decline in home values if the supply of homes continues to increase and buyer demand remains low. As the market favors buyers, sales should pick up once mortgage rates become more affordable in 2024. Unlike the 2008 housing crisis, the U.S. market has shown resilience, and sales should grow as mortgage rates stabilize. In the coming months, Sparks home prices may decrease slightly as fewer buyers are willing to enter the market due to high mortgage rates and limited inventory. However, with the market becoming more buyer-friendly, sales are likely to increase in the near future as more people find opportunities to purchase homes in Sparks.
