Is Another Real Estate Bubble Forming?
Last year, at this time, the median price of a home in Reno-Sparks was $145,000. Currently, it's just above $190,000. That's not the only change we are seeing in the market.
I sat down with Michael Wood, a realtor with Re/Max Realty. He said homeowners are opting to short sale as opposed to foreclosing. I asked Wood if that is healthy for the real estate market.
"It's great if you're a buyer and you can be the lucky buyer of a short sale and you can at a great price. It's not good for everybody else, because what it does is short sales can, at times, artificially deflate a true housing value."
Wood said even finding a short sale in this market isn't going to be easy. He said there's only about five weeks worth of inventory left, meaning homes available. Wood said he is seeing an average of five bids per home and up to 15 on others.
Homes that are being sold for less than $300,000 are even more scarce because they are being swallowed up by investors.
Along with investors, Wood said 35% to 40% of his clients are relocating from California and looking to buy. All this adds up to low inventory, which means newer homes are starting to be built again.
Wood said Di Loreto Homes has 19 reservations on homes here in Reno that aren't even built yet.
I asked Wood, if he is concerned about another real estate bubble forming and bursting on all of us. He said he's not concerned, at least not yet. "The last time we've been this high was 2009. We're on the same trajectory going up as we were back in 2004 to 2006, right before the bubble. However, we started in the high $200's. I think it becomes cause for concern if we see this string continue for another 12 to 16 months."
The entire interview airs this weekend. Face the State airs on Channel 2 Saturday at 4:30 am. It also airs Sunday at 6:30am and 4pm.
Written by Chris Ciarlo