2015 reno/spark residential real estate forecast
TRANSCRIPT
The 2015 Reno/SparksResidential Resale
Market Report
Dave HansenPresident
Reno/Sparks Association of REALTORS®Coldwell Banker Select Real Estate
www.rsar.net
I thought this was interesting
On February 2, Punxsutawney Phil, the weather-predicting groundhog from Pennsylvania, regrettably saw his shadow. This means winter will last six more long weeks. But don't give up hope. Since 1887, Punxsutawney Phil has seen his shadow 80% of the time; he likes it cold. Perhaps because of this, his predictions are accurate just 44% of time. Poor compared to other meteorologists but good compared to most economists. • Elliot F. Eisenberg, Ph.D.
A Little History First
• Let’s look at the NAR data and then• Let’s look at the local data
• Some charts will be similar, but there are differences
Local Home Price Recovery
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0ABSORPTION: MONTHS OF
UNSOLD INVENTORY
BALANCED MARKET
Value Is Again Supported By Sales
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
0
100
200
300
400
500
600
700
800# Listings Sold Median Price
Is It a Seller or Buyer Market?
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0ABSORPTION: MONTHS OF
UNSOLD INVENTORY
BALANCED MARKET
Market Rate Steady, Price Changes
Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
0
100
200
300
400
500
600
700# Listings Sold Median Price
Almost Constant Sales Appetite
0200400600800
1000120014001600180020002200
SalesTOTALS
Net ActiveTOTALS
SALES VS ACTIVE IN-VENTORY
Reno/Sparks Median Prices
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
$260,000
$280,000
$300,000 Recent Median Price TrendingSingle Family Homes
Active Listings
Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-150
250
500
750
1000
1250
1500
1750
2000
2250
2500Net Active Listings TOTALS
Just who are these buyers?
• The National Association of REALTORS (NAR) creates a survey of buyers and sellers every year and we have pulled some interesting details out of these reports
Reason for New vs. Resale Home2013 2014
New Home 16% 16%
Avoid renovations or problems with plumbing or electricity 32 40
Ability to choose and customize design features 25 24
Amenities of new home construction communities 14 17
Lack of inventory of previously owned homes 10 10
Green/energy efficiency 6 9
Previously Owned Home 84%
Better price 30% 32
Better overall value 28 32
More charm and character 17 19
Lack of inventory of new homes 9 9
Distressed Sales Disappearing
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-150.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
NONE%
SHORTSALES%
REO%
The Sales Mix - 2013 - 2014
“Congratulations. After years of struggling,you’ve finally achieved the American Dream.You sold your home.”
2013 Distressed Sales
None Short Sales REO0
500
1000
1500
2000
2500
3000
3500
4000
4500None; 3943
Short Sales; 1498
REO; 402
2013 Special Conditions Home Sales Mix
2014 Distressed Sales
None Short Sales REO-500
500
1500
2500
3500
4500
5500
None, 4711
Short Sale, 569
REO, 333
2014
Where is our Shadow Inventory
• NOD = Notice of Default– Prospect for a short sale
• NOS = Notice of Sale– Going to Auction
• REO = Bank Owned– Sale at discretion of “Asset Managers”
383 Bank Owned Properties Not Currently For SaleGreater Reno/Sparks
Data is from RealtyTrac January 2015
577 Pre-Foreclosure PropertiesNot Currently For SaleGreater Reno/Sparks
Data is from RealtyTrac January 2015
150 Properties Going to AuctionNot Currently For SaleGreater Reno/Sparks
Data is from RealtyTrac January 2015
Jobs are coming to our area
• EDAWN brings over 2000 jobs in 2014• Tesla will bring 6500 primary jobs
– And up to 10,000 secondary jobs• Defeat of Margin Tax removes stumbling block• Unemployment falls to close to 6%• Nevada Governor’s Economic Development
– GOED is bringing more jobs to our area
It pays to be different
• In the past we have evaluated affordability for the entire region.
• Home owners with different incomes are attracted to different areas.
• Here are some areas selected for continued population growth.
Affordable House Defined
• Used the median income for each Zip Code
• Used PITI and 28% Mortgage Debt to Gross Income
• Interest was increased by 1% for end of 2015
• The Washoe medium income in 2014 was $53,994.
89434 Sparks East and Foothills
2014 2015 est.• Median Home Value $199,000 $208,600• Median Household Income$55,788• Affordable House Value $267,668 $238,309
• January 2015 Inventory 30• Homes below $267,668 11• Homes below $259,000* 9
*Washoe County Affordable Home
89436 Sparks Suburban & Spanish Springs
2014 2015 est.• Median Home Value $260,000 $270,000• Median Household Income $79,216• Affordable House Value $380,074 $338,309
• January 2015 Inventory 104• Homes below $380,074 87• Homes below $259,000* 22
*Washoe County Affordable Home
89506 Reno North Valleys & Stead
2014 2015 est.• Median Home Value $172,000 $181,400• Median Household Income $57,496• Affordable House Value $275,862 $245,605
• January 2015 Inventory 43• Homes below $275,862 29• Homes below $259,000* 27
*Washoe County Affordable Home
89511 Old Southwest Suburban
2014 2015 est.• Median Home Value $475,000 $489,100• Median Household Income $92,166• Affordable House Value $442,207 $393,705
• January 2015 Inventory 153• Homes below $442,207 11• Homes below $259,000* 2
*Washoe County Affordable Home
89521 Reno South Meadows
2014 2015 est.• Median Home Value $286,000 $294,000• Median Household Income $72,900• Affordable House Value $349,770 $311,406
• January 2015 Inventory 93• Homes below $349,770 49• Homes below $259,000* 10
*Washoe County Affordable Home
Population 33,400 34,300
Population 33,400 34,300
Homes Sales in 2014 = 545
Est. Shadow Inventory = 24
89523 Reno Northwest Suburban
2014 2015 est.• Median Home Value $280,000 $289,500• Median Household Income $67,952• Affordable House Value $326,030 $290,270
• January 2015 Inventory 90• Homes below $326,030 14• Homes below $259,000* 8
*Washoe County Affordable Home
89408 Fernley
2014 2015 est.• Median Home Value $144,000 $150,000• Median Household Income $50,213• Affordable House Value $240,919 $214,494
• January 2015 Inventory 63• Homes below $240,919 49• Homes below $259,000* 53
*Washoe County Affordable Home
The January Numbers Are In
• The Median Price is down 4% to $252,000• 3 months over previous months up 3.3%• 12 months over previous 12 months up 14.4%• Unit sales at 360 down 29% from December• January inventory at 1314 down 5%
$0
$40,000
$80,000
$120,000
$160,000
$200,000
$240,000
$280,000
$320,000
$360,000
$400,000
Area 100 Median Price through January 2015
Jul-08Jan-09Jul-09Jan-10Jul-10Jan-11Jul-11Jan-12Jul-12Jan-13Jul-13Jan-14Jul-14Jan-15Jul-150
250500750
10001250150017502000225025002750300032503500
Net Active Listings TOTALS
December Numbers from Washoe County
• New Home Sales 106• NODs 103• NOS 76• Trustee Deed 53• New SFR/REO listings 21
The Take Away for 2015
• Median prices increase 5-6% in 2015• Interest rates historically low until midyear
– Should start rising to about 5% by years end• Job opportunities will continue to grow• Distressed sales will continue to fall off• Affordability will slowly decline• Underwriting controls in 2016