If you’re looking for a new home in Sparks or Reno, then you’re probably tired of hearing that there is very little inventory available, and we don’t blame you. Homeowners are staying in their homes longer, cash buyers are flooding the market, and housing costs are increasing. And, while it may seem like Northern Nevada is experiencing more appreciation and market volatility than other areas, that’s not the case.
Inventory levels have reached record lows across the country, which has caused demand to grow significantly over the last few years. Some have made a comparison between the 2006 housing market crash and the situation we’re in now. However, there are many key differences. In 2006, the lending process was essentially broken, the construction industry seemed to disappear overnight and many people became unemployed as a result of the crisis. Today, people are better qualified for loans, have more equity in their homes, and our regional economy is more diverse. Nevada’s unemployment rate is 5% below the national average.
Millennials, baby boomers, the increased cost of living, and the search for a better quality of life are factors driving the appreciation of home prices, which is not related to a bubble-driven demand. As a result, buyers are offering 105% to 107% above the asking price for homes in more sought-after areas.
However, we know that understanding the circumstances driving the housing market right now doesn’t make it any less frustrating if you’re looking for a home! At Dickson Realty, we’re here to help you take advantage of the market as new housing opportunities arise. That’s why we recently had a conversation with Brian Bonnenfant, the project manager for the Center for Regional Studies at the University of Nevada, to share some insight on how to do just that.
Expert Advice On Finding A New Home In Sparks and Reno
Tip 1: New Housing Developments Are On The Horizon
New housing developments are essential to providing Northern Nevada with more inventory. To give buyers and sellers the most accurate and up-to-date information, our team of experienced real estate agents has been tracking the number of new units coming online. They regularly visit new development sites and collect all the relevant information a homebuyer might need. With more than 300 agents in the area, our team has surveyed almost every up-and-coming development out there.
The good news is that there’s more housing on the way. In 2020, there were more than 2,950 residential housing permits submitted, and there are currently 11,632 units in active projects under construction in the Reno-Sparks region. With 17,151 units approved, including those under construction, we’re hopeful that residential developments will only continue to grow.
Talus Valley will be among the first to break ground this year. It will offer housing at different price ranges, including multifamily and single-family homes. New housing developments in North Valleys, Damonte Ranch, Spanish Springs, and Sparks will also have homes for sale below the median home average, which is currently at $481,377 for a new single-family home.
Tip 2: Expect Growth In The East
As the cost of living continues to increase in Reno and Sparks, we expect growth to expand east towards Fernley, Nevada. During our recent conversation, Bonnenfant explained why this might be the case.
“The future of Truckee Meadows relies on chasing flat and cheap land,” Bonnenfant said. “Fernley will provide the next 10 to 20 years of new single-family inventory.”
In 2020, more than 29 new companies and 10 corporate headquarters moved to Nevada and created jobs in manufacturing, technology, distribution, and healthcare. With this in mind, Fernley’s industrial supply company and carbon-free data center will attract more jobs and businesses to the area.
“We need entrepreneurs to go out there and take chances,” Bonnenfant said. “Developers in Fernley are waiting for jobs and demand to pick up.”
Businesses are waiting for population growth, and people are waiting for more business opportunities before making a move, Bonnenfant explained further.
Reno recently ranked No. 13 in USA Today’s Top 20 Hottest Housing Markets report. However, the Reno-Sparks area’s population growth decreased in 2020, according to the state demographer. Bonnenfant explained that the increased cost of living and the global COVID-19 pandemic could have contributed to this slowdown.
Developers are also concerned with higher construction costs for labor and materials, which could further influence the inventory of housing in Northern Nevada.
Tip 3: Any New House—Even If It’s Just One—Can Help The Market Grow
While we’re waiting for new housing developments to come online, it’s important to note that homes priced in the median-price range, $481,377, account for a substantial part of real estate sales. In March 2021, single-family homes between $400,000 and $700,000 accounted for almost 50% of sales, and homes priced at $400,000 and below accounted for almost 32% of all sales. However, more homes were listed above the $1 million range, accounting for about 8% of sales in March 2020.
While several new developments have received attention for their price tags, there are also many homes that are coming online with a base-price range of less than the median. According to the research by our Dickson Realty agents, at least 33 new developments of new homes in Sparks and Reno have an average base price below $400,000. These developments are primarily in the North Valleys.
“The luxury housing makes the news,” Bonnenfant said. “But in the North Valleys, you can buy a brand new, single-family detached for $261,000. But, those projects don’t get as much attention.”
Many homeowners are now deciding to relocate to less expensive areas where housing is priced below the median range. This trend should hopefully create more inventory for the Reno-Sparks market. Whether it’s priced below the median price range or considered luxury real estate— inventory is inventory—and any new home in Sparks and Reno can help the market. As different types of housing come online, it allows buyers and sellers to either move up to a larger or more expensive home or down to a smaller or less expensive home. This creates mobility in the market, can loosen inventory, and ultimately impact prices as well.
Tip 4: Don’t Wait For The Perfect Time To Buy Or Sell
One of the most common questions people ask us at Dickson Realty is, “Should I sell?” or “Should I buy?” While we don’t have a crystal ball that predicts the future, we can make some suggestions based on the conditions we’re seeing in the market.
If you’re looking to sell, then it’s important to strike while the iron is hot. Take advantage of the high demand and low supply market because this steep price appreciation won’t last forever.
Don’t wait for a bubble to burst and lose out on historically low mortgage rates. While we may see some quarterly adjustments in home prices, it’s unlikely that our market will see the same type of significant price decreases as we did in 2006. So, if you’re ready to buy, take advantage of low-interest rates and get into a home that fits your budget. Having a foothold in the real estate market will serve you well as our region continues to see more growth and attention.