Will Reno’s “Crazy” Growth Continue?

Reno, Nevada

Reno, Nevada expects 50,000 new jobs in the region in the next five years.

By Holly O’Driscoll 

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.
employment_chart 2018

  • 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. 

Facts:

  • 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.

For more information on this topic see the Epic Report produced by the Economic Development Authority of Western Nevada (EDAWN)

Holly O’Driscoll is a Realtor (R) with Chase International Real Estate in Reno. Contact her at hodriscoll@chaseinternational.com


Interest Rate Jump Hurts Home Buyers

Since the election, mortgage interest rates jumped 1/2 percent, according to a briefing this morning from one of our mortgage partners.

“Interest rates should increase gradually during the next four years under a Donald Trump administration, which could dampen growth in the housing industry, economists and housing experts predict,” according to The Street, an online economic blog.

It’s already happening. Rates offered to borrowers with excellent credit jumped to 4.25 percent for  30-year fixed-rate loan. That’s a real shock to consumers used to rates starting in the 3-percent range. The new numbers are low by historical standards — yet psychologically, it hurts.

 

It also cuts into consumers’ buying power. The lender I spoke with explained that a half percent adds about $44 per month to the payment on a $200,000 loan.

That may not sound exorbitant. Over time it adds up. And, it cuts buying power for many clients. Depending on their income and credit rating, every incremental increase in mortgage interest rates means they can afford less house.

Various economic websites are using “skyrocketing” “relentless move upwards” when talking about recent spikes in interest rates. Will rates continue to rise? I have no crystal ball. In one weekly report, 50% of economists said “yes” If that happens, buyers will afford less house.

25 Back 4 10611 Buckhorn Ridge Ct. High Res (36 of 59) Back

10611 Buckhorn Ridge, Truckee, NV $2,999,000

How does that impact buyers? Higher interest rates mean higher monthly payments and it will take a higher income to qualify for the amount a consumer could get last week.

How does it impact sellers? By shrinking the buyer pool. Will it hurt list prices for homes?  Not immediately. Logically a sustained increase in mortgage rates has to effect sellers.

  • Will it spur buyers to lock in a rate before they climb even higher?
  • Will it price buyers out of the market?
  • Will sellers have to lower the property price? Will they negotiate more?

What do you think? Let me know!

Holly O’Driscoll, Chase International Real Estate, Reno, Nevada. Call/text: 775-762-7576

 

 


NBC’s Redesign — The Ruin of a Trusted Online News Site

Does anyone else out there hate the redesigned NBC News website? It looks like a Pinterest page … all big photos, no information. I am a self-proclaimed news junkie, veteran journalist interested in national and world news — as well as what happens in my city and state.  The new format repels me — the NBC News site used to be one of my top spots for a quick headline check.  Now I avoid it — even CNN’s website is better.

My first journalism job was a summer internship with WGBH-TV in Boston. Back then, the station had a live 10 o’clock news program — I ran the teleprompter and worked in the control room. I only went out on a few stories … but it was fun and I learned so much! I found WGBH a great experience for a complete novice. The news staff was generous with their time and information. I graduated from college thinking I wanted to become a TV news producer — not necessarily the on-air person, but the editor making all the decisions behind the scenes.

Circumstances landed me in Washington, D.C. — a mecca of political news. My first newspaper was USA Today. It was a brand-new (and much-ridiculed) concept at the time. I worked on big stories, learned about the power of big money and of cut-throat politics  — both inside the company as well as on Capitol Hill!

Top execs and politicians play hardball — very few manage to succeed without making serious ethical compromises. It’s reality. Those in the line of fire must constantly out-maneuver the competition to get ahead, or even just to keep their jobs. Those who don’t end up on the curb. I contend life outside the bubble — in a “real” community — has much to recommend it. Politics, ambition and money play a role in every city …  but usually on a more manageable scale.

I still keep up on the old rat race — the Washington Post, Politico, The Daily Beast, Slate, ABC, CBS, CNN — but rarely NBC anymore. I miss the old “news” format. I’m not the target audience, obviously. I wonder who is? My guess: People who care about photos, not facts, not perspective, not NEWS.

I wonder what the user statistics will reveal. I used to check it at least twice a day — sometimes lots more. Now, maybe once a week — and I haven’t clicked on a single story.

I read one comment that said it was as if Pinterest swallowed Windows 8 then vomited — I agree!

What do you think?  Are you a fan? Tell me what appeals to you about the new format.

Hate it? What should they do instead?