2015 Year In Review - Reno-Tahoe Housing Market Conditions
Here's to wishing your New Year is off to a great start. In this post, I want to share some trends in the Reno-Tahoe housing market by specific cities and/or areas to help you understand how our local markets fared in 2015 compared to the prior two years. I'd also like to share some insights 'from the trenches' to help you gain additional insight. This information is valuable for both prospective home buyers (at any stage of the process) as well as local property owners who want to keep an eye on the real estate market. Please feel free to share!
Before jumping into numbers and commentary, you should know that all of 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 - you can subscribe to future report updates from this link - for free (if you were notified directly from CalNeva Realty with an email for this, you do not need to re-subscribe!).
Let's start with price and home value trends...
The median price for all of of the markets below continues to rise at aggressive rates. The rate of price appreciation for 2015 was fairly consistent from 2014 to 2015. The 2015 growth rate is down substantially from what we experienced in 2013 over 2012. The local market with the biggest percentage gain in 20215 was Fernley. This is primarily due to more affordable housing in Fernley and proximity to the Tahoe Reno Industrial Center (TRIC) where Tesla and other companies are making significant investments. The lion's share of the forecasted jobs for Tesla will likely not start to develop until sometime in 2017 with full employment capacity targeted for 2020. For 2016, we are forecasting the median price to rise but probably at slightly lower levels than in 2015 due to expected hikes in interest rates, home affordability based on local earnings. The continued lower levels of inventory and anticipated jobs will continue to put upward pressure on prices.
|Median Price||2013||% Change||2014||% Change||2015||% Change|
|Reno||$ 221,000||30%||$ 250,000||13%||$ 290,000||16%|
|Sparks||$ 199,500||25%||$ 235,000||18%||$ 264,000||12%|
|Carson City||$ 175,400||23%||$ 200,000||14%||$ 230,000||15%|
|Carson Valley||$ 250,450||28%||$ 277,500||11%||$ 315,000||14%|
|Dayton||$ 139,950||21%||$ 161,000||15%||$ 190,100||18%|
|Fernley||$ 123,250||38%||$ 140,000||14%||$ 168,000||20%|
|Lake Tahoe||$ 681,250||41%||$ 747,500||10%||$ 745,000||(0%)|
Home Sales Volume
The growth in the number of homes sold is generally increasing, but is heavily constrained by the overall size of the housing market. Even as this number inches higher, the region will need housing for an estimated increase of 51,000 new jobs between 2015 and 2019. To accomodate this growth, there will continue to be a great deal of new home construction. Of note in the table below: Reno and Sparks both recorded new highs (previous highs were in 2005 at 4,175 - Reno and 1,896 - Sparks). In contrast, while the Carson Valley showed the highest growth rate in 2015, that market is still only at 71% of its record sales volume of 1,164 houses in 2004. Likewise, the Fernley market saw 57% of the sales volume in 2005 (915 homes).
|Homes Sold||2013||% Change||2014||% Change||2015||% Change|
What Might 2016 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.
Further Growth and Economic Activity
We continue to see a significant migration of people from Northern and Southern California to our region - one trend that will likely continue primarily due to better home affordability, lower cost of living, no state income taxes, and less congestion - 'quality of life'. In addition, the job growth from companies expanding and/or moving to the region is likely to continue as a result of the 'Tesla Affect'. The real estate markets in 2016 will see prices rising at a more modest rate and continued high demand in the lower price ranges.
If you have any questions from the statistics or analysis in this post, please feel free to comment or give your CalNeva Realty agent a call.
Thanks for reading!
Broker - CalNeva Realty