Reno closes 2017 with 4th highest apartment rent spike in U.S.
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
Reno’s rising rents just got higher.
The Biggest Little City closed 2017 by posting the fourth-highest rent increase in the nation this month, further adding fuel to Reno’s ongoing rental crisis.
Reno rents jumped 6.5 percent from November for a median one-bedroom apartment, according to apartment tracker Abodo’s 2017 National Apartment Report for December. The number, which is calculated from more than 1 million Abodo listings nationwide, placed Reno among the top five rental markets in the nation for rising apartment rent:
- Newark, New Jersey: 12.9 percent ($1,036 to $1,170)
- Corpus Christi, Texas: 9.8 percent ($882 to $968)
- Saint Paul, Minnesota: 7.4 percent ($1,017 to $1,092)
- Reno, Nevada: 6.5 percent ($887 to $945)
- Indianapolis, Indiana: 4.3 percent ($748 to $780)
Another report paints an even pricier picture for apartment rents. The average rent for a one-bedroom apartment in Reno-Sparks during the third quarter this year was $1,071, according to real estate appraisal and consulting firm Johnson Perkins Griffin. When including all apartment types, the average rent jumps up to $1,202 during the same three-month period.
Vacancy rates improved from 1.17 percent to 2.41 percent for the third quarter but are still far below the 5 percent considered as an indicator for a balanced market. Apartment watchers typically consider a vacancy below 3 percent to be essentially a no-vacancy situation because the market is usually primarily dealing with turnover at that point.
Reno has been in the midst of a housing crunch as it sees significant economic activity while recovering from a historic recession. One big factor is the arrival of several companies, which run the gamut from manufacturers such as Tesla, which picked the area to house its Gigafactory, to logistics operations that build on Reno-Sparks’ strong reputation as a shipping and distribution mecca in the west.
In addition to rising rents, the area is also seeing rising median prices for single-family homes, further adding to the housing affordability crisis experienced by Reno residents. Reno, not including Sparks, briefly broke the record for a median price home after hitting $387,250 in July.
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The median price has since fallen but remains unaffordable for those earning the median income in the area. A household needs to earn $70,000 per year to comfortably afford a $318,000 house, according to the Reno/Sparks Association of Realtors. Various estimates peg the median household income in Reno anywhere between $50,000 to $58,000 a year.
In addition to job seekers, the influx of new residents is also being driven by transplants from California, including retirees. Despite Reno’s rising housing costs, it is still more affordable when compared to areas such as San Francisco and Silicon Valley.
In Abodo’s report, for example, three Bay Area cities were included in the top six markets with the highest rents nationwide for a one-bedroom apartment. San Francisco was No. 1 at $3,253, San Jose was No. 3 just below New York City at $2,397, and Oakland was No. 6 behind Washington, D.C., and Boston at $2,083.