In our latest market update, Elena Boland, of Wholesale Mortgage stops by to discuss our market for August 2022. The real estate market in Northern Nevada has slowed over the last few months. The median home price is down to $574,510 for the month of July, which is now off $40,000 from the record median home price of $615,000 that we saw in May 2022. Another sign that the market is cooling is the median days to contract. It is up 300% from last August and is now at 25 days. The days of selling your house in a weekend are officially over. Finally, the monthly supply of inventory has increased sharply to 3.2 months. While we haven't entered into a balanced market, which is when the supply is between 4 to 6 months, we should be there next month.
I fully expect that the market will continue to slow as we head into the fall for several reasons. First, historically speaking the real estate market is seasonal here in Northern Nevada and September is typically a slower month because the kids are in school and people are settling. Second, the fact is every time mortgage interest rates go up 1%, buyers lose approximately 10% of their buying power. In January of this year mortgage rates were hovering around 3.0% and now the rates are at 5.25% - 5.5%. This is a 25% loss in buyers' buying power and has to be made up somehow. Since people's incomes aren't increasing and mortgage rates are coming down anytime soon, prices have to come down. I won't be surprised to see another 10%-15% decrease in our market locally by the end of this year.
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