But fluctuations in median home prices also reveal that the market has a long way to go before new development and sustained growth becomes the norm.
More than 500 homes sold in Reno and Sparks combined last month — up from about 380 in February — marking an 88 percent and 6 percent increase from March 2010, according to figures from The Greater Reno-Tahoe Real Estate Report.
Inventory in both cities remained consistent at between six to seven months of stock.
But while Sparks saw a slight up-tick in median home prices for all single-family units sold, Reno saw an unexpected decline to $160,000 in March from $173,000 in February. That figure represents an all-time low since the recession hit in 2007. Furthermore, it is down 11 percent from one year ago and 58 percent since an August 2005 high of $379,000.
“One month doesn’t make a trend,” said Mitch Argon, an agent with CalNeva Realty and author of the report. But the drop did surprise him.
Part of the explanation might be that more than two-thirds of homes in the local market are either short sales or foreclosures, and that means prospective buyers are going to bid low on properties of interest.
Patrick Winchell, a senior loan officer with New American Mortgage, said he hasn’t sold any homes this year that weren’t considered distressed.
Nevada leads the nation in foreclosures and negative equity rates. In March, there were 544 notices of default in Washoe County alone, according the county recorder’s office.
Complicating matters are new provisions relating to FHA loans that have increased monthly mortgage insurance costs.
So while FHAs typically make it easier for people to qualify for mortgages because they are backed by the federal government — so much so that they account for about 80 percent of all loan applications Winchell processes — the $33 monthly premium increase for a 30-year, fixed-rate mortgage might have some influence on what buyers are willing to pay.
“To some families, that might make a difference,” Winchell said, particularly when the current price of commodities such as gasoline and food are rising fast.
Moreover, high jobless and bankruptcy rates throughout the state continue to threaten long-term recovery in the region’s housing market.
Winchell wishes there were better indicators of where the market is headed. But with so many moving parts, uncertainty seems to dominate the short-term outlook.
The one bright spot might be that demand will stay strong as long as home prices stay low, Argon said, perhaps offsetting some of the volatility in the market.