Worried home prices and growth in Reno will crash? Many people seem to be. I have clients who think prices are too high and want to wait for the next downturn before purchasing a home.
Advice from the economic development and building experts: Don’t!
Growth of jobs and population in Reno/Sparks outpaced the “crazy” projections in the last five years — and those who study the numbers say the next five years will be more of the same.
Citing data from the Economic Planning Indicators Committee (EPIC Report), Aaron West, CEO of the Nevada Builders Alliance, contends Reno, Sparks, Carson City and surrounding communities are in for a wild ride and long-term growth in home prices and availability.
Growth is outpacing the “crazy” predictions
Some of the EPIC statistics and projections, West shared at a recent recent Residential Real Estate Council meeting include:
- From 2014-2020 (a five-year span) the region was projected to add 52,400 jobs.
- The reality: by the end of 2018, there were 58,400 new jobs in the region!
That’s more than 10,000 jobs per year — and we have a year to go on that projection.
What about the next 5 years?
That growth trend is expected to continue for the next five years, West said.
- At that pace, this area will have 50,000 more jobs by 2024.
That means more than 100,000 jobs will have been created in this area between 2014 and 2024. Each “job” is estimated to add 2.3 people to the area (spouses, children, extended family).
Crazy right? That’s not all: Retirees are moving here in huge numbers. Many sell their outlandishly-valued California homes. They come — and buy here for cash.
When we marvel that home prices in Reno have jumped by 10+ percent year over year, this is why.
This is basic supply and demand economics. All those newcomers have to live somewhere — construction of new housing has NOT kept up.
To further support the job-growth projections, take a look at the industrial/commercial side of the equation:
- In 2018, nearly 2.4 million square feet of industrial space was added to the region.
- Another 4 million square feet is in the works for 2019.
Does that sound like a recession is coming? No. Big businesses are investing here. They will need workers.
- Nevada has a much friendlier business climate in terms of regulations and costs than many surrounding states.
- Nevada has an incredible personal tax advantages over neighboring states (No income tax, no inheritance tax, no estate tax).
- While housing costs in Nevada are rising, elsewhere on the West Coast is much worse.
Conclusion: If you want to move up, do it soon! Prices are unlikely to fall, and with more people arriving monthly, competition will heat up for the best available properties.
Holly O’Driscoll is a Realtor (R) with Chase International Real Estate in Reno. Contact her at firstname.lastname@example.org