The U.S. median home price has seen a 23% increase since November 2011 to a little more than $180,000. Total year-to-date sales are also ahead of last year's numbers by 181 homes, according to Standard and Poor's nationwide Case-Shiller index.
Case-Shiller doesn't include Reno in their 20-city list, but we did receive November's market report from the Reno/Sparks Association of Realtors which just came out this week. It says the area is still experiencing rising home prices.
Reno/Sparks Association of Realtors president, and Remax realtor Kevin Sigstad says the Reno median now is "$182,500. Pretty amazing." Because of the limited supply of homes for sale, there weren't that many homes sold. But that demand for homes is the fuel behind prices in Reno lately, up 23% from November 2011, and a whopping $47,500 jump in just one year since we bottomed out at $135,000 in January. According to Sigstad, "You can tell that the bottom of the market has now moved up, and we're now selling more expensive homes."
Supply is still very tight…the market has not been correcting itself. Typically when prices go up, more sellers want to cash in, expanding supply. Why hasn't that happened? Sigstad says too many are still underwater in their homes, and are holding back on selling now because they'd lose money.
The best news from home prices is employment. If they go high enough they could bring back to work all the unemployed construction workers to build new homes. And real estate agents: Washoe County has lost over 1,400 agents over the past 5 years, who just were not making enough to keep their licenses active.
But for the rest of us, are the higher home prices really good news? High home prices hurt buyers, who will then have less money to spend on anything else. It could set us up for another bubble. The prices are causing problems for the Reno's Housing Authority, which has the job of buying homes for affordable housing. Executive Director David Morton told us, "You've got a lot of investors who have cash who are willing to buy, and it makes it really tough for first-time home buyers, or agencies like ours."
Morton buys cheap homes with grant money, to sell to those who can't afford traditional homes. He had a lot of foreclosed bargains to choose from, until recently. The pickings are not as plentiful now. "It's changed. Clearly we don't have the same number of vacancies in any of our target areas that are available, at this point."
He still says the agency is in good shape, and sees a lot of positives in the home price rise. David Sigstad sees much to celebrate too. In the meantime, if you're looking to buy, Sigstad says if you see a home you like, move fast. Make your offer at least as high as the neighborhood's recent comparable sales. And forget about asking for concessions. As he told us, "There are no concessions anymore. The 'you pay for these closing costs,' and 'you pay for my down payment,' things like that...the competition is such that those concessions have gone away."
Because that's the kind of market we're in right now.
Sunday, May 19 2013 7:02 PM EDT2013-05-19 23:02:30 GMT
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