2014 Year In Review - Real Estate Market Conditions
This blog post offers a statistical summary of 2014 by showing how the markets have changed from 2012, 2013, and 2014 as well as some thoughts and considerations for how our local real estate markets will perform in 2015.
The information and tables below are in summary form. To see charts of this information and more, please review The Greater Reno-Tahoe Real Estate Report.
The median price for all local markets continued to rise for 2014 compared to 2013. The rate of appreciation slowed and the median price rose about half as fast as prices were rising in 2013 compared to 2012. The table below shows the median price trend for key local markets from 2012 to 2014 with the rate of annual growth as a percentage change.
|Median Home Price||2012||% Change||2013||% Change||2014||% Change|
Unit Sales Volume
While you can see the median price was at its recent low point in the 2011 and 2012 years, the number of homes sold began rising at a steady pace as early as 2008. The number of homes sold in the last few years has been fairly stable - with most markets showing moderate declines in 2014 compared to 2013. While interest rates remain historically low, the rise in home prices and weakening demand from investor/flippers are the primary factors contributing to this decline. The table below provides a summary.
|Homes Sold||2012||% Change||2013||% Change||2014||% Change|
The Reno, Sparks, and Dayton markets have reached or exceeded the unit sales volumes from their historical high levels in 2004 and 2005. At the same time, Carson City, Carson Valley, and Fernley have not yet fully recovered in this area. The table below shows the historical high point and the year it was recorded for each local market we cover:
|Peak Volumes||Homes Sold||Year|
Sold Price to List Price
Another indicator as to how active market conditions may be is to review the ratio of sold prices to list prices as a percent. As you can see from the table below, most of the local markets had a higher percent of sold to list price in 2013 over 2014Â indicating the activity levels in 2013 were stronger than 2014. At the same time, 2014 is still higher than 2012 so while price and activity is becoming more sustainable or stable, the markets remain very active.
|% Sold to List Price||2012||2013||2,014|
What Might 2015 Bring?
Mixed Markets - price segmentation and field activity
It is important to note that the numbers in the tables above (and in the market report) are for each city/area and all price ranges for single family homes. When the market is divided into price segments, the statistics and resulting home buying/selling experience will vary greatly. Specifically, for lower priced homes (below the median price), the current markets are very active and buyers still need to compete with other buyers for well maintained and priced homes. This lower price segment, due to the competition, is a 'sellers market' and gives home sellers a tangible advantage. On the other hand, at higher prices in the market - especially in the range of what would constitute 'luxury homes', there are not as many buyers and it is taking longer to sell homes. As a result, the buyer has an advantage by not needing to compete with other buyers and having a larger selection of home inventory to review and choose from.
New Home Construction
I don't have specific numbers to report but new home construction has continued to rise aggressively during 2012, 2013, and 2014. Between 2006 and 2011, new home construction was at extremely low levels due to the builder's inability to compete with prices of the distressed properties (foreclosure, short sale) that were on the market during the downturn. New construction is expanding the general home inventory and supply of housing but will take a number of years to fill in the void left during the downturn. Our agents are representing a number of clients who are buying new construction.
Further Growth and Economic Activity - 2014 Carry Over
2014 was a big year for economic announcements in the Northern Nevada region. Tesla Motors' commitment to build its battery gigafactory in the region was the biggest. For more information on Tesla's factory and real estate related information, please visit our Tesla Real Estate Center. There has been a lot of press on other companies now considering relocating or expanding to this region since the Tesla announcement. Switch, a data center operator, was the most recent company to announce major expansion plans to the region. As these companies build out their facilities and fill their payrolls in the area, the economic tide will continue to rise. This diversification and expansion of business growth will bring changes to the real estate markets and living in Northern Nevada, in general.
If you have any questions from the statistics or analysis in this post, please feel free to comment or give your CalNeva agent a call.
Broker - CalNeva Realty