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Drop in Reno Home Prices – a Trend or a Blip?
A snowy day at 5295 Canyon Drive, Reno, NV
The real estate market in Northern Nevada changed in the past few months. The latest reports show a drop in median home prices year over year, raising questions including: Why? What’s ahead? Will prices nosedive in 2023? Great questions! Let’s dig deeper.
Perspective:
In our area, generally, prices tend to rise, then plateau or flatten. Nationally, home values on average rise 4% to 6% a year over a 20 year period. Not every year, but over time. My research suggests Northern Nevada is in a plateau phase.
The Why
Economic and environmental factors.
- Rising interest rates on mortgages certainly worry buyers and definitely impacts their buying power. In the fall, many potential buyers pulled back, shocked at the change. Many sellers ignored this reality, thinking buyers would pay more. The result: Longer days on market, price negotiations and more homes selling for below initial list price.
- Reno’s had a tough winter. Snow nearly every weekend discouraged house hunters. I-80 often closed, cutting off a prime feeder market. People just haven’t been out and about looking for homes. Sellers who need to move, now negotiate and accept less than list price.
Spring, however, is coming. If history is any guide, as the trees start to bud, buyers will start looking again. They’ve had time to accept that 2.5-3.5 percent interest rates are gone and unlikely to return. We’re already seeing some properties — those in those in great locations, in decent to “perfect” condition and properly priced — get multiple offers. Several of my clients have been in multiple offer situations in the last month.
To me, all this suggests that today’s buyers are lucky. Sales activity often dips in winter. Annual data shows seasonal ups and down — December and January are low points, May through August tend to be the peak.
For those thinking the Reno real estate market is about to crash, I suggest viewing the EDAWN website and forecasts. The Economic Development Authority of Western Nevada relentlessly recruits businesses to move jobs here. Their successes are measured by the thousands of new jobs — and thousands of people who have moved here. Their mission continues. More jobs, more people will come. Companies from around the nation and the world now know this is a great place to work and live.
Housing Supply Facts
Homebuilding lags significantly behind the actual and projected growth in Northern Nevada. There simply are not enough homes here now or in the building pipeline to meet the current and future demands. Home values rose at crazy rates — 10% to 20% a year during the pandemic.
People who can work from anywhere are choosing this area. The lifestyle, the economic benefits, the weather all beat much of the country. Retirees love this area too — partly for the zero income tax, low property tax and overall cost of living. It certainly beats many West Coast communities on housing costs. Conversely, folks from the Midwest and South experience sticker shock.
Chase International Real Estate recently released its 2022 year-end Real Estate Market Report which showed lower overall volume in sales (number of homes sold). Yet prices rose — in some neighborhoods prices jumped drastically in 2022.
Specifically, in Reno and Sparks, 13% fewer homes sold in 2022, yet the median price of those homes was up 10% from $480,000 to $535,000. To the eest, Fernley saw comparable results. South of Reno in Carson City and the Carson Valley the number of homes sold dropped 9% and 16%, respectively, while prices rose 8% in Carson City and 5% in Carson Valley (Minden/Gardnerville).
Ahead
So what will the rest 2023 bring? I don’t have a crystal ball. From analysis by economists, fellow realtors and my own clients, I expect to see days on market (listing to closing times) shorten and prices to stop sliding and perhaps rise for many, but not all, properties.
People still need places to live. They still want to build wealth over time through home ownership. Based on the number of multiple offers my Chase colleagues and I have seen in mid-February to mid mid March, the best “deals” for the next six months likely are homes currently on the market.
The Verdict: Data, history and economic forecasts suggest the recent dip in median home price likely is a blip vs a trend.
Waiting until 2020 to buy a home may cost you — a lot — in Reno
Some potential home buyers in Reno think home prices have maxed out, and many believe prices will drop substantially “soon.” Others are convinced the companies bringing jobs to the region will fail or pull up stakes and leave “soon.” Some have said this for the past five years, yet and the data has proven theses scenarios wrong time after time.
Experts in the economic development sector predict robust growth in Northern Nevada for years to come, with national companies continuing to migrate here, creating more jobs and putting more pressure on home prices. National commercial and home builders seem to agree — investing millions in land development, infrastructure and housing projects. Business people running these companies do their homework and focus on profits. Their investments speak to Reno’s future.
What does that mean to the average resident? To me, it signals that home prices likely won’t drop significantly anytime “soon.”
The graphic below outlines the cost of waiting based on data from home sales across the nation. In Northern Nevada, very little sells below $200,000 — so add about $100,000 to these numbers. Waiting to buy a home could — and quite likely will — cost more in 2020.
What is your perspective? For more insights on and data on home sales in Northern Nevada, please email/contact me directly.
Holly O’Driscoll is a freelance journalist and Realtor at Chase International Real Estate in Reno, NV. (NV lic: s.176271) Email her at [email protected] phone: 775-850-5900.
Get to Know Reno History, Fun Facts, Home Prices
I love living in Reno. Trademarked as the Biggest Little City in the World” Reno has evolved from a rough and tumble frontier town into a modern city with diversity in lifestyles, businesses and economy. Named Reno 1868, farming, ranching gold and silver mining drove the economy. In the 20th century, fame came from gaming, tourism and availability of “quickie divorces”.
These days, high-tech, distribution and creative companies broaden the job opportunities here. Major corporations, entrepreneurs and startup ventures have created 50,000 new jobs in the last 10 years. Yet, it is still a very livable city. Locals joke about our rush “15 minutes” of traffic in the morning and evening.
- Fun Fact: Reno was named for Civil War Union General Jesse Reno — who never actually visited this area.
- Fun Fact: On the eastern side of the Sierra Nevada at an elevation of 4,500 feet, Reno boasts an average of 250 to 300 days of sunshine annually.
- Fun Fact: Reno has as many as a dozen “micro-climates,” meaning temperatures and rain and snowfall can vary widely from the wetter west side to the drier eastern edge.
I love being able to be on the ski in the morning then bike in the afternoon. People in the valley with south-facing driveways, rarely have to shovel snow! Great free events, accessible music/plays special performances and an interesting array of restaurants. Here are a few of my favorite reasons for living here:
Culture and Sports
Widely diverging events attract people from around the world visit Reno. Some of the biggest events:
Great Reno Balloon Races: Don’t miss Dawn Patrol!
Reno Rodeo, Hot August Nights and the National Championship Air Races. July is “Artown” — a month of music, arts and cultural happenings. My favorite: The Great Reno Balloon Races in September.
Many special events center around or near the Truckee River. The Truckee flows from Lake Tahoe east through downtown Reno, ending up at Pyramid Lake.
Downtown hosts minor league professional sports teams: Aces baseball and Reno 1868 FC USL soccer club both play at Greater Nevada Field. Museums abound, including the Nevada Museum of Art, Discovery Museum and the National Automobile Museum. Local music, arts, acting and singing organizations showcase local talent and draw national acts to Reno. Parks, trails and recreation opportunities abound.
Education: Local high schools graduates attend universities, colleges and skilled trade programs throughout the country and the world — including top tier and Ivy League schools. Some might argue that being from Reno helps get them noticed! In town schools include University of Nevada, Reno (UNR) and Truckee Meadows Community College (TMCC). Nearby: Western Nevada College in Carson City and Sierra Nevada College in Incline Village. UNR also has a medical school and nursing school.
Business Opportunities
So much is happening here, this post would be out of date the minute it goes live. Economic development organizations from the state, regional and city levels coordinate efforts to diversify the business base in every community. Non-profit groups, venture capitalists and business incubators support entrepreneurs in all stages of development and growth. The goal: Jobs creation. It is working. These efforts interesting people with creative minds and incredible drive to northern Nevada. Learn more at EDAWN.org
- Lesser-Known Fun Events: Discovery Museum and the Nevada Museum of Art and the hold “adult only” nights throughout the year. Both offer terrific opportunities to mix, mingle and see the e
Kids learn to ski at the non-profit Sky Tavern Jr. Ski Program.
xhibits.
- Unique Sport Opportunity: Sky Tavern Junior Ski Program — volunteer run, weekends only, just for local children to learn to ski at a very reasonable price. In summer, Sky Tavern runs ropes and bike programs. Unique to this area.
Full disclosure: I am a Realtor. This blog is on a real estate website, so here’s the scoop on housing: Home prices are on the rise — especially in the entry-level price bracket.
Real Estate Prices for Homes sold from January – June 2019
- Sold Single-family Homes: 2002
- Median price (half sold for more/half sold for less): $400,000
- Lowest price $75,000
- Highest price: $4.5 million
What does $400,000 buy? Here’s a look at the stats from homes that sold for $395,000 – $405,000:
- Smallest: A 952-square-foot home built in 1947 with 2 bedrooms, 1 bath and a 1-car garage, located in the popular Old Southwest near downtown.
- Largest: A 2,881-square foot home built in 2005 with 4 bedrooms, 2.5 baths, 2-car garage in the Clear Acre Lane area north of McCarran Boulevard
- Middle size: 1,900 square feet, 3-bedrooms, 2-baths, 2-car garage in at least six different neighborhoods.
Next blog: Inside scoop on Sparks!
Holly O’Driscoll of Chase International Real Estate, is a Realtor, journalist and entrepreneur. NV. License# S.0176271.
Wonder what your house might sell for? Click here to check value of any address in the USA at this link Have a question about living here or about real estate? Send an email: [email protected]
