Home Price Increases Outpace Wages in Washoe County, Again
If your family income is less than $75,000 a year, chances are, you'll have a hard time buying a home in Washoe County.
If your family income is less than $75,000 a year, chances are, you'll have a hard time buying a home in Washoe County. The median family income in our area is around $55,000, well below where it needs to be to buy a home at the median price.
"Things are a challenge if you're on the 'buy' side," Reno/Sparks Association of Realtors President John Graham said. "There's less selection, and you're paying more."
Part of the issue is low supply-- the Reno/Sparks Association of Realtors reports about 1.7 months of supply compared to the 4-6 months, which is considered a healthy rate. The supply issue is nothing new; we've seen low supply in the housing market, both to buy and to rent, for several years now. Unfortunately that trend hasn't changed. The supply of available homes was 25 percent lower in September than it was this time in 2016.
"I'm not ready to panic, but I think it's a challenge," Graham said. "I could see the possibility of us getting to a place because of lack of housing that it really stops our area's growth."
In Washoe County overall, the median home price is around $347,800. That's up 11 percent year-over-year, and up five percent from the second quarter of 2017.
While the year-over-year price is up eight percent in the Reno-Sparks area as well, there has been a slight drop in prices since the summer. The median price in Reno-Sparks is down four percent from August to September, and that's the second month in a row to show a small decrease. Graham acknowledged that the decrease could be just a typical season cooling, but he still called it "a good sign."
Experts are also pointing to an increase in building permits as a positive sign that the market could get some relief in the next few years. Builders have pulled more new permits in 2017 than they did in 2016, which means more new homes to balance out the market.
Unfortunately, Graham said we shouldn't expect most of those new homes to be below the median price, since the cost to build them has gone up. Graham said the cost of land, materials, and labor are all up. That, combined with the difficulty of getting financing for smaller projects, means prices for these new homes are likely to be higher than the median.
His advice if you want to buy is to get a very good realtor.
"In the $300,000 and down range, properties are going into contract pretty quickly," Graham said, "so you really need a quote unquote 'bird dog' who's following the market all the time."