2015 Reno/Spark Residential Real Estate Forecast

The 2015 Reno/SparksResidential Resale

Market Report

Dave HansenPresident

Reno/Sparks Association of REALTORS®Coldwell Banker Select Real Estate

www.rsar.net

I thought this was interesting

On February 2, Punxsutawney Phil, the weather-predicting groundhog from Pennsylvania, regrettably saw his shadow. This means winter will last six more long weeks. But don't give up hope. Since 1887, Punxsutawney Phil has seen his shadow 80% of the time; he likes it cold. Perhaps because of this, his predictions are accurate just 44% of time. Poor compared to other meteorologists but good compared to most economists. • Elliot F. Eisenberg, Ph.D.

A Little History First

• Let’s look at the NAR data and then• Let’s look at the local data

• Some charts will be similar, but there are differences

Homeowner Households from 2010 (Decreased by 1 million)

In thousands

Renter Households from 2010(Increased by 4 million)

In thousands

Nationwide Home Price Recovery(Almost Doubled over 20 years)

FHFA Home Price Index

Local Home Price Recovery

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0ABSORPTION: MONTHS OF

UNSOLD INVENTORY

BALANCED MARKET

30-year Mortgage Rates

Value Is Again Supported By Sales

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

0

100

200

300

400

500

600

700

800# Listings Sold Median Price

Is It a Seller or Buyer Market?

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0ABSORPTION: MONTHS OF

UNSOLD INVENTORY

BALANCED MARKET

“As first offers are usually unrealistic, I would prefer it if you submit the second offer first.”

Market Rate Steady, Price Changes

Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

0

100

200

300

400

500

600

700# Listings Sold Median Price

Almost Constant Sales Appetite

0200400600800

1000120014001600180020002200

SalesTOTALS

Net ActiveTOTALS

SALES VS ACTIVE IN-VENTORY

Reno/Sparks Median Prices

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$260,000

$280,000

$300,000 Recent Median Price TrendingSingle Family Homes

New Listings Are Bouncing Back

100200300400500600700800900

1000New Listing TOTALS

New Pendings Are Down

0100200300400500600700800900 New Pending TOTALS

Active Listings

Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-150

250

500

750

1000

1250

1500

1750

2000

2250

2500Net Active Listings TOTALS

Just who are these buyers?

• The National Association of REALTORS (NAR) creates a survey of buyers and sellers every year and we have pulled some interesting details out of these reports

Reason for New vs. Resale Home2013 2014

New Home 16% 16%

Avoid renovations or problems with plumbing or electricity 32 40

Ability to choose and customize design features 25 24

Amenities of new home construction communities 14 17

Lack of inventory of previously owned homes 10 10

Green/energy efficiency 6 9

Previously Owned Home 84%

Better price 30% 32

Better overall value 28 32

More charm and character 17 19

Lack of inventory of new homes 9 9

Distressed Sales Disappearing

Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-150.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

NONE%

SHORTSALES%

REO%

The Sales Mix - 2013 - 2014

Shrinking Shadow Inventory(but not in CT, NY, NJ)

“Congratulations. After years of struggling,you’ve finally achieved the American Dream.You sold your home.”

2013 Distressed Sales

None Short Sales REO0

500

1000

1500

2000

2500

3000

3500

4000

4500None; 3943

Short Sales; 1498

REO; 402

2013 Special Conditions Home Sales Mix

2014 Distressed Sales

None Short Sales REO-500

500

1500

2500

3500

4500

5500

None, 4711

Short Sale, 569

REO, 333

2014

Where is our Shadow Inventory

• NOD = Notice of Default– Prospect for a short sale

• NOS = Notice of Sale– Going to Auction

• REO = Bank Owned– Sale at discretion of “Asset Managers”

383 Bank Owned Properties Not Currently For SaleGreater Reno/Sparks

Data is from RealtyTrac January 2015

577 Pre-Foreclosure PropertiesNot Currently For SaleGreater Reno/Sparks


150 Properties Going to AuctionNot Currently For SaleGreater Reno/Sparks


New Jobs Are On Coming!

Jobs are coming to our area

• EDAWN brings over 2000 jobs in 2014• Tesla will bring 6500 primary jobs

– And up to 10,000 secondary jobs• Defeat of Margin Tax removes stumbling block• Unemployment falls to close to 6%• Nevada Governor’s Economic Development

– GOED is bringing more jobs to our area

NV Jobs in Tourism & Gaming

Data from GOED

NV Jobs in Aerospace & Defense

Data from GOED

Nevada Jobs in Energy

Data from GOED

NV Jobs in Information Technology

Data from GOED

NV Jobs in Logistics & Operations

Data from GOED

NV Jobs in Manufacturing

Data from GOED

It pays to be different

• In the past we have evaluated affordability for the entire region.

• Home owners with different incomes are attracted to different areas.

• Here are some areas selected for continued population growth.

Affordable House Defined

• Used the median income for each Zip Code

• Used PITI and 28% Mortgage Debt to Gross Income

• Interest was increased by 1% for end of 2015

• The Washoe medium income in 2014 was $53,994.

Population 25,400 25,700

Homes Sales in 2014 = 370

Est. Shadow Inventory = 198

89434 Sparks East and Foothills

2014 2015 est.• Median Home Value $199,000 $208,600• Median Household Income$55,788• Affordable House Value $267,668 $238,309

• January 2015 Inventory 30• Homes below $267,668 11• Homes below $259,000* 9

*Washoe County Affordable Home




89436 Sparks Suburban & Spanish Springs

2014 2015 est.• Median Home Value $260,000 $270,000• Median Household Income $79,216• Affordable House Value $380,074 $338,309






89506 Reno North Valleys & Stead







89511 Old Southwest Suburban







89521 Reno South Meadows








89523 Reno Northwest Suburban







89408 Fernley




The January Numbers Are In

• The Median Price is down 4% to $252,000• 3 months over previous months up 3.3%• 12 months over previous 12 months up 14.4%• Unit sales at 360 down 29% from December• January inventory at 1314 down 5%

$0

$40,000

$80,000

$120,000

$160,000

$200,000

$240,000

$280,000

$320,000

$360,000

$400,000

Area 100 Median Price through January 2015

0

100

200

300

400

500

600

700# Listings Sold

Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-150

250500750

10001250150017502000225025002750300032503500

Net Active Listings TOTALS

December Numbers from Washoe County

• New Home Sales 106• NODs 103• NOS 76• Trustee Deed 53• New SFR/REO listings 21

The Take Away for 2015

• Median prices increase 5-6% in 2015• Interest rates historically low until midyear

– Should start rising to about 5% by years end• Job opportunities will continue to grow• Distressed sales will continue to fall off• Affordability will slowly decline• Underwriting controls in 2016

Look at “To the Point” monthly

Reno/Sparks Association of REALTORS®5650 Riggins Court, Reno, NV

775-823-8800www.rsar.net

Date post:	06-Aug-2015
Category:	Real Estate
Upload:	dave-hansen
View:	325 times
Download:	3 times