Home prices in the Reno-Sparks area fell in the fourth quarter of last year, continuing a downward trend, according to a new report.
The report by the Northern Nevada Regional Multiple Listing Service shows the median price for existing single-family homes fell 11 percent compared with the same quarter a year ago to $314,250, and down from $324,500 in the third quarter.
Besides declining prices, sales also slowed to 929 in the last quarter, a 22 percent drop from the previous year.
"We've seen the worst of it, but we haven't seen the end," said Tom Cargill, an economist at the University of Nevada, Reno. "The worst is over. I don't see another 10 percent fall. But they could go down a few more percentage points."
Cargill said a seller's market will likely not return this year.
"We'll see some further weakness in prices mainly because people are getting squeezed by the creative financing that they used to buy some of these houses," Cargill said.
"The fed is likely to start raising interest rates, probably not the next meeting, but it's probably not too far off. And, though we're not near as bad as Las Vegas, there is still a speculative element here that has driven up prices."
However, the active listings on the MLS continue to fall, dropping to an average of 3,278 for the metro area during the fourth quarter, which is close to what is considered normal for Reno-Sparks.
That's good news for sellers in this market, which saw active listings rise to nearly 7,000 during the summer, creating a glut of unsold homes that forced many to either drop their prices or pull their homes off the market.
During the fourth quarter, the median time homes were on the market before selling stretched to 95 days, which was made longer by the seasonal slowing that is normal in the winter months but still up 34 percent from the same quarter in 2005.
But still-historically low interest rates and a smaller inventory have some in the industry hoping that the housing slump will soon hit bottom and begin to recover.
"Last year, it was a lot leaner than it seems to be right now at the same time," said Wayne Capurro, broker/owner of Capurro & Reed Real Estate and president-elect of the Reno-Sparks Association of Realtors.
"You could ask any Realtor that has been working this market this past year, and almost all of them will tell you it was a bad year," he said. "If you ask them now how they feel about it, most of them are going to say things are improving."
(Copyright 2007 by The Associated Press. All Rights Reserved.)