Wages, Housing Costs Continue to Rise
Wages are on the rise in northern Nevada but they are not keeping up with housing costs.
Northern Nevada's economy is booming. The Economic Development Authority of Western Nevada says about 15,000 new jobs came to Reno-Sparks over the past year. Those jobs are bringing a lot more residents to the region.
"You talk about 15,000 jobs, we don't have 15,000 people sitting around, waiting for jobs," Mike Kazmierski, President/CEO of EDAWN said. "So many of those jobs are being filled by people coming to the region that are looking for housing."
Many housing developments and apartment complexes are under construction but Kazmierski says there needs to be a lot more in the pipeline. As more people move into town, housing costs rise. Two recent surveys show the average monthly apartment rent is about $1,240. A one-bedroom apartment averages $1,085 and a two-bedroom unit is about $1,310.
"We do see a lot of families really only being able to afford maybe a one-bedroom vs. a two," Angelica Reyes, President of the Reno/Sparks Association of Realtors said.
Some prospective buyers are finding it harder to buy a home. The median home price in the Truckee Meadows is more than $400,000. Reyes says many first-time buyers only qualify for a $250,000 loan, so they are going in a different direction.
"It makes more sense for a lot of buyers to start investing in maybe purchasing a condo or a townhome where they could have a two-bedroom home to three-bedroom home and a little bit more space for their family," Reyes said.
While many residents from more expensive cities can sell their previous home and pay cash for one in the Truckee Meadows, Reyes says most still have to decide between an expensive mortgage or high rent. Some renters are choosing to buy.
"We do see buyers where six months prior to their lease expiring, they're actually going out there, looking for resources, seeing what they need to do to purchase a home," Reyes said.
Kazmierski says wages are on the rise but says they are not keeping up with housing costs. He says people who earned $10-$12 per hour five years ago, are likely making $18-$20 per hour.
"Our wages are moving up at an incredibly fast rate," Kazmierski said. "If you're a business owner and you have not increased wages, I guarantee you have a problem."
With so many residents moving to town, construction companies and developers are trying to keep up with demand. Kazmierski says prices will remain high until the new home supply meets that demand.
"We have to infill, we have to build smaller houses, we have to use condos and townhouses, the missing middle and try and use the available land we have in a higher density to meet the needs of our housing going forward," Kazmierski said.
Kazmierski says many of the area's new jobs have good wages, between $60,000 and $80,000 but it still is not enough to afford to purchase a home. Reyes says there are a lot of different loans that could allow people to qualify for a home purchase.
21,300 new jobs have moved to Las Vegas in the last year. Kazmierski says when you consider population, Reno-Sparks is tripling the job growth rate of Las Vegas.
"It's really an exciting story but we just need to address some of the challenges associated with it," Kazmierski said.