Reno median home price goes up again, just short of $360K
The rising cost of housing in the last few years is making home ownership a tough proposition for Reno home buyers. We look at what’s fueling the Biggest Little City’s housing crisis and potential options for people looking for a new place to call home Jason Hidalgo/RGJ
Temperatures are not the only thing on the rise in Reno this summer.
The price for an existing single-family home in the Biggest Little City rose to just a hair below $360,000 as June unit sales broke a record set a decade ago during the real estate boom.
Reno’s June median price of $359,450 represents a 1 percent increase from May and a 7 percent jump from the same period last year, according to the latest figures from the Reno/Sparks Association of Realtors. The data is limited to stick-built, single-family dwellings and does not include condominiums, townhouses and modular homes.
June's increase represents a smaller jump compared to previous months. Don’t expect pricing to see a big drop anytime soon, however, said Doug McIntyre, RSAR president-elect. Supply continues to be tight as the number of new home listings are down, McIntyre said.
HOUSING CRUNCH:Want to buy a house in Reno? Good luck
New listings in June were at 808 units, down a percent from May and 4 percent from the previous year.
“Clearly, we are not filling the funnel or meeting the demand for new inventory,” McIntyre said during the RSAR’s monthly “To the Point” presentation. “This will continue to drive prices upward.”
Combined with tight supply, the high cost of housing in Reno — which includes one of the highest rates of rent increases in the nation in the last few years — raises ongoing concerns about affordability. The spike in median home values continues to outpace median income growth even as the area sees an increase in companies and jobs. New home construction also has not kept up with demand, putting a tighter squeeze on supply.
The greater Reno-area housing market is hot. Limited supply and rising prices, however, are causing several issues, with housing affordability at the top of the list. Here are some key statistics. Jason Hidalgo/RGJ
Reno remains deeply entrenched in a seller’s market with supply dipping down to just 1.4 months in June. A balanced housing market typically has six months of inventory.
Sparks posted a lower median price at $299,000. The number represents a 3 percent decrease from May but is still up by 9 percent from the same period last year.
Sparks’ decline was not enough to prevent an increase in pricing for the overall market. The median home price in Reno-Sparks in June was $340,000, up nearly a percent from the previous month and 9 percent from last year. The number represents the highest point for the market since the recession started.
Reno-Sparks home values also continue to inch closer to the record set during the housing bubble. Median price for the combined Reno and Sparks market peaked in January 2006 at $365,000.
Demand remains strong in Reno-Sparks, which saw a record 736 unit sales for June. The previous record was 679 and was set in June 2005. New pending sales also continued a seven-month streak of increases. The 769 new pending sales for June represent a 36 percent jump from the same month last year. The average time in contract for existing homes was 40 days.
The Fernley market, meanwhile, posted a median price of $227,100, down 3 percent from the previous month but up 12 percent year over year. Unit sales are also up 30 percent year-over-year at 73.
The RSAR expects the region to keep up its sales pace this year.
“Assuming the majority of pending sales end in closed transactions, sales will remain strong through the coming months,” said John Graham, RSAR president.
Potential concerns for the real estate sector include a spike in interest rates and another recession in the U.S. economy. Unemployment, for example, just hit a 15-year low while the United States is about to enter the ninth year of its economic recovery, said Elliot Eisenberg, chief economist for economic consulting firm GraphsandLaughs and former senior economist for the National Association of Home Builders.
The likelihood of a recession at this point, however, is low, Eisenberg added.
“First, wage growth is very, very anemic (and) household balance sheets are much better than they were,” Eisenberg said. “Yeah, they are going to raise rates here eventually … but nothing coordinated, nothing quick, nothing sudden.”