Seven years ago marked the beginning of one of the most turbulent times in the Reno real estate market. Now the situation is much different, and from affordable new home construction projects to a boom in home sales, here are some things you should know about the current state of the Reno real estate market:
Stability is the New Norm:
The best way to describe the Reno real estate market over the past 10 years is to compare it to a roller coaster. As we moved into 2007 we saw a steep climb followed by an even steeper crash. This year, however, things are noticeably different. After a slow, but steady, recovery in property values we are finally starting to see stabilization in the market. Since June of 2014 we have seen that the average price for a home in the Reno-Sparks area hold steady around the $250,000 mark.
Housing is Less Affordable:
Between January of 2012 and today we have seen home values jump by nearly 90%, and while this represents amazing growth for property values the issue is that wages have not climbed in a similar way. What this means for the area is that approximately 55% of Northern Nevada homes are considered “affordable” compared to the national average of 62%. This is still improvement over the situation right before the housing bubble when only 18% of homes were considered “affordable.”
New Homes are Back:
After the housing bubble collapse we saw a nearly instant stop to new construction around the Reno area, however this is changing with the increase in home values due to the fact that new homebuilders are able to realize profits again.
Fewer Homeowners are Underwater:
According to the Lied Institute, nearly 75% of Northern Nevada homeowners have equity in their homes. This is a drastic improvement over the situation in 2009-2010 where only about 27% of homeowners we not underwater on their home loans.
At the height of the housing collapse we were seeing that nearly 80% of home sales involved a distressed property, now distressed properties account for about 14% of all homes sold in Northern Nevada. Now this does not necessarily mean that the banks are not holding onto a sizeable “shadow inventory” because you still see unoccupied homes in neighborhoods without “for sale” signs on them. But what this does mean is that the banks are in a position to release these properties to the market slowly in order to sustain the continued growth in the Northern Nevada housing market.