A new high: Reno-Sparks median house price breaks 12-year-old record
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
Prospective homebuyers looking for relief from Reno’s long-running sellers’ market will have to wait longer.
Reno-Sparks just reached a new housing milestone in February, breaking a record that has stood for more than a decade.
The combined median price of an existing single-family home in Reno and Sparks reached $370,000 last month, according to the Reno/Sparks Association of Realtors. The new median breaks the previous record of $365,000 set in January 2006 during the height of the housing bubble.
The 2006 record remains higher when adjusted for inflation — the previous record is equivalent to $456,235 in today’s dollars, according to the Bureau of Labor Statistics consumer price index calculator.
The new mark remains a significant milestone for the area as it breaks the last remaining median home price record for Reno-Sparks that was set during the heady days of Northern Nevada’s previous housing boom. Reno broke its boom record of $380,000 from January 2006 after the median price for a single-family home in the city reached $387,250 in July 2017. Sparks took longer but eventually broke its previous record of $335,000 from 2005 just last month when it reached $337,200.
Home values in Reno have eased up a bit since last year’s new high but are starting to creep back up to record territory. The median price for an existing single-family house in the Biggest Little City was at $385,000 in February. Sparks, meanwhile, continues to see an upward trend, posting a median of $351,000 during the same month, up 2 percent from January.
Prices are expected to “inch up” this year as Reno-Sparks enters residential real estate's busy spring and summer season, said Doug McIntyre, president of the Reno/Sparks Association of Realtors.
“The good news is there has been a 10 percent increase in new listings (at 532 units),” said McIntyre, who also works as a Realtor for Reno Property Management. “With spring approaching, it’s traditionally a time when more people put their homes on the market.”
Tight supply resulting from near-zero construction during the recession combined with strong demand from buyers has fueled a housing crunch in Reno marked by skyrocketing home values. Housing supply for Reno-Sparks, which calculates how fast the current supply will sell out at the current pace of sales minus new inventory, is at just 1.3 months compared to 2.7 months a year ago.
Supply is especially limited at the lower end or entry-level part of the market. The Biggest Little City closed last year and opened 2018 with less than 100 existing single-family homes in the market priced below $300,000. The median household income in Reno, which has hovered between $50,000 to $55,000 in recent years, is also unable to comfortably afford the median home price in the area.
Reno-Sparks has also seen one of the sharpest increases in rent nationwide in the last couple of years, with near-zero vacancies leading to a surge in rents. East Sparks has especially seen rents rise, which has been attributed to its relative proximity to Tesla’s Gigafactory compared to other Reno-Sparks neighborhoods. Communities such as Fernley are also expecting to benefit from increased activity, not just from Tesla but other businesses inside the Tahoe-Reno Industrial Center.
In response, Sparks is seeing plenty of construction activity for apartments such as The Bridges and Fountainhouse projects in Victorian Square as well as new housing at the Sparks Marina.
“We’re the tip of the spear for Tesla,” said Sparks Councilman Ron Smith during the RSAR’s monthly To The Point presentation. “This is where they’re gonna be living so we’re doing everything we can to make that happen.”