Despite higher interest rates than this time last year, the Reno Sparks Real Estate Market is picking up a little faster than it did in 2023. A couple of additional important trends are apparent on the adjacent graph. First, after the pandemic years many people were anticipating a major correction in prices. While the market did correct, it seems to have leveled off in almost perfect sync with our ten-year median price trend line. Secondly, and assuming our median prices follow the same trend they have had for the past three years, I think we’re due for another spike in June – August of this year. If you do have a home to sell, think about getting your property in “parade ready” condition by mid-May.
For my second topic I’d like to address the class action lawsuit against the National Association of Realtors®, and the recently proposed settlement (pending court approval). The fundamental argument in this case has been focused on the age-old practice of brokers sharing their listing commission with cooperating buyer’s agents, which leaves sellers feeling as if they’ve unfairly paid all the brokerage fees. I have an entirely different point of view on this and would like to share that.
A recent two-year study of the preceding eight years conducted by the Northern Nevada Multiple Listing Service reveals that 86% of home sales in Reno & Sparks were listed by Realtors®. Those homes that were marketed by Realtors® via the MLS sold for a 17% higher price than those that were not. That’s a $55,000 swing for our typical home. I have represented buyers purchasing homes from “for sale by owners”, and in my experience those home buyers got a “better than full retail” deal in virtually every case. We simply evaluated similar home sales in MLS, then deducted a reasonable listing brokerage fee from the offer. Since there was no listing broker, why would the buyer I was representing line the seller’s pockets with funds that would normally go towards professional services? In simpler terms, if you buy a carton of milk at the grocery store, who ultimately pays for the shipping costs? In my mind it is and always has been the buyers that have funded real estate brokerage fees. I’m sure this event will change the way we operate as an industry. For example, written buyer representation agreements will now be required. I think this creates an opportunity for those agents that can justify their fees. A strong buyer’s agent does so much more than simply opening the front door; the challenge for them will be to quantify those skills and services.
For more information regarding the MLS survey I mentioned earlier go to: https://nnrmls.com/powerofmls/