Median home price hits $400,000 in city of Reno for first time
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
Good news Reno homeowners, the median home price in the city just reached $400,000.
Bad news Reno homebuyers, the median home price in the city just reached $400,000.
The Biggest Little City reached another milestone for its skyrocketing house prices as it set a new record in March for the cost of an existing single-family home. The new mark breaks the previous record of $387,250 set in July last year.
The Reno market remains firmly entrenched in seller’s market territory, said Doug McIntyre, president of the Reno/Sparks Association of Realtors.
“As we approach the spring selling season, sellers are seeing this as a good time to sell,” McIntyre said. “First quarter new listings are up 1 percent compared to the same period in 2017.”
Reno’s new median represents a 6 percent increase from February and a double-digit 21 percent increase from March of last year, according to the RSAR. It also brought up the combined Reno-Sparks median to $375,000, breaking the record set last month. This occurred despite a decline in Sparks’ median price to $344,000, down from the high of $351,000 that the city set in February.
Elliot Eisenberg, chief economist for economic consulting firm GraphsandLaughs and former senior economist for the National Association of Home Builders, cautioned about looking at the numbers for Reno-Sparks in isolation. Eisenberg noted that the last 12 years have seen a significant amount of inflation.
“The cumulative amount of inflation since 2006 has been 20 percent,” Eisenberg said. “That means that the house that sells today for $365,000 is really only $290,000 in 2006 dollars so we’re still $75,000 behind where we were and interest rates are much lower than they were back then.”
According to the Bureau of Labor Statistics’ consumer price index calculator, $400,000 today is worth about $318,000 during the peak of the housing bubble in 2006 .
Although home prices are still cheaper with inflation factored in compared to where they were during the bubble years, however, getting a new house remains a challenge for homebuyers. Housing supply, which is measured by how fast inventory would last at the current pace of sales minus new listings, is down to a low of 1.1 months in the Reno-Sparks market. That’s far below the standard for a balanced market, which is typically at six months.
“Last year at this point in time, inventory was at 2.1 months,” said John Graham, who served as RSAR president in 2017. “That was low then and 1.1 months is just ridiculous.”
The Reno-Sparks market also has no existing single-family homes priced under $200,000 in its active inventory. The bulk of the inventory — about 389 units — can be found in the price ranges between $300,000 to $400,000, but 73 percent of those are already under contract, according to the RSAR. New listings are also down 3 percent from February and 20 percent from the same period last year, indicating continued tight supply as well as upward momentum in pricing.
Graham says part of that issue is that a lot of homeowners are still hesitant to sell, which further limits supply. The reluctance they feel, however, is understandable, especially for homeowners looking to move up from a starter home, he said. Just like move-up buyers were hampered by the steep loss in home values after the housing bubble’s collapse, the sharp increase in housing prices combined with the market’s low supply is proving to be a challenge as well.
“Some of them are thinking, ‘Yes, I’ll make money if I sell my house now but what am I going to buy to replace it?’” Graham said. “Unless they’re leaving the area, they have to find another place to live in here as well.”