New residents, low interest rates to keep sales hot

Here's a strong hint about the strength

of the residential real estate market in

northern Nevada this year:

While final figures aren't in, the volume

of sales crossing the Multiple Listing

Service of the Reno/Sparks Association of

Realtors in 2002 almost certainly will top

$1 billion.

As recently as the year 2000, by comparison,

the yearly total was $850 million,

and the 2001 total barely cleared $900 million.

Here's another hint that the market is

hot: The number of licensed real estate

agents in the market this month is about

1,900 compared to the 1,400 or so who

usually are work in the region.

And there's little indication that the residential

market will cool significantly during

2003.

Two oft-reported factors the lowest

interest rates in 45 years and heavy migration

of people from other states into northern

Nevada probably will continue to

drive the residential market next year.

The number of existing homes sold in

the Reno-Sparks market this year is

expected to be about 4,830. That's 5.7 percent

higher than 2001's number.

"The interest rates are going to stay low

for a while. The demand is there," said

Penny Mayer, president of the Reno/Sparks

Association of Realtors.

The lower interest rates continue to offset

some of the effects of the higher prices

that result from the demand for Reno-area

housing.

In October, the Realtors association

reported, the median price of a home in the

market was about $179,900 compared with

$161,000 a year earlier.

But the sales price isn't as important as

the amount of the monthly payment for most buyers.

"You can only buy what you can afford,"

said Mayer.

The continued low interest rates that

she expects to see in 2003 means that more

people can afford home ownership yet

another factor that keeps demand strong.

"We're seeing a lot of first-time buyers

whom we haven't seen before,"Mayer said.

"It's really gratifying."

While Realtors who sell existing homes

have enjoyed good business, so have the

builders who bring new houses to the market.

Prices for new homes this year were

about 8.5 percent higher than last year.

That's well above the average increases of

4.5 percent during the past 10 years.

Real estate experts and builders both

have said the upward pressure on prices is

likely to increase through 2003 because of a

shortage of lots available for building.

John Mitchell, president of the Builders

Association of Northern Nevada, recently

noted that only 44 subdivisions in the area

currently have more than 10 lots available

for construction. That's a mere one-year

supply of new homes.

But toward the end of 2003, several new

subdivisions will be coming on line, and

2004 may prove to be the first year in a

while that shopping for a new home

becomes a buyer's market.

Among major residential subdivisions

that will meet demand in 2003 and beyond

are the Somersett master-planned community

in northwest Reno with 2,650 lots and

the 3,100-lot Peek properties in the north

valleys, where Barker-Coleman will be the

first builder.