A Sunnier Forecast for Reno's Economy - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

A Sunnier Forecast for Reno's Economy

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Every year, the Builder's Association of Northern Nevada flies in Dr. Eliot Eisenberg from Washington, D.C. to give a pep talk. He was in full form at the Atlantis Wednesday, waving his arms and pointing out some very positive charts on the big screen. To fire up this crowd of builders, agents and developers, he shouted, "New construction will improve! Margins will improve on houses that you sell! You are going to make money!"

Despite all the cheerleading Dr. Eisenberg does, some recent years at this yearly event were like funerals. During the recession, he told me, "There weren't many people here then. The news then was really gloom and doom for quite a long time. It was 'Things are not going to get better, things are going to get worse.'"

And this year? "It's a party! Well not quite a party…we're not pulling out champagne bottles, but it's a happier place to be. I don't have to fear coming here and receiving rotten fruit."

There is very little rotten fruit in the latest numbers. Good news abounds: the median sold price in Reno-Sparks just hit its highest dollar amount in over 5 years (since September 2008). December 2013 was a 2% increase over November 2013, and a 23% increase over December 2012:

Reno-Sparks Median Home Price (Northern Nevada Regional MLS)

Jan 2010 (recession low point): $167,000  

Dec 2012 $186,500

Nov 2013 $224,900

Dec 2013 $230,000

(Houses only. Excludes condo/townhouse & manufactured homes)

And inventory continues to fall. At last check, 828 houses are for sale, down 15% from November. There's now less than a 2-month supply of homes. It's a "seller's market," and getting tighter. As commercial real estate agent Scott Shanks with NAI Alliance told me, "As our economist detailed at today's forecast, it's getting better, so I think Reno is certainly on the up and up."

Folks we met at the conference attribute our housing market's ongoing recovery to flat-out consumer demand for existing homes, and especially for the few new homes that are out there. It's an atmosphere that has brought back the flippers…investors who buy a home, maybe do some work on it, and quickly resell it. Nevada's a flipping hot spot again, and as the Builder Association's Teri Scharosch told us, they're making money: "They sure are. Not like the old days, but certainly better than years past."

It's also brought back all-out bidding wars among buyers, especially in today's most sought-after neighborhoods. Scharosch says those are "South Truckee Meadows...Damonte Ranch…anywhere south Reno, and I think Spanish Springs is right up there too."

But there was still a bit of a hangover at this party. In the dark days of the recession, construction workers left Nevada in droves. Dr. Eisenberg told me, "It is hard to get them back, and builders are going to face a number of problems. There will be labor problems, and they'll have a hard time finding supplies."

And as prices go up, it will get tougher for buyers. Finding good, value-priced homes in the Truckee Meadows is getting tougher…but finding those deals is not impossible. As Teri Scharosch told us, "Talk to your real estate agent. There are deals out there. They can help you get into a new home."

But perhaps the biggest positive of this year's conference is the expected boost in jobs, rebuilding Reno's decimated construction industry. As the folks attending the builder's forecast know, and what everyone should know, is that the housing industry drives our economy…so any good news out of there is the silver lining for the rest of us.

-written by John Potter

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