Who is driving Northern Nevada’s real estate market?
In a white-hot real estate market, it’s common for homebuyers and sellers to cling to the misguided notion that homes “sell themselves.” Truth is, times like these make a real estate agent’s guidance and expertise more valuable than ever — particularly for the three groups of homebuyers who are driving the market in Northern Nevada.
Millennials and first-time homebuyers make up the first group. Demographically, their numbers are large — but their purchasing power isn’t as strong, and spikes in home values like we’ve seen in Reno/Sparks are pricing them out of the market. For this group of buyers, moving quickly and negotiating shrewdly when new inventory hits the market is key … which is why an experienced real estate agent can be their best friend.
The second group are the Transformers — home owners whose life circumstances have changed. They’re looking to sell and move to a home better suited to their needs. Some need a bigger house to fit their growing family. Others are looking to downsize as empty nesters, or upgrade as their incomes rise. The National Association of Realtors reports that, on average, people move every seven years. But the recession of 2009 prevented a lot of people from making these moves, and now that the economy is improving, pent-up demand is making its presence felt in a big way.
Unfortunately for Transformers, they’re still getting squeezed. The dramatic appreciation we’ve seen in home values makes their existing property too pricey for Millennials and first-timers. When they finally do manage to run the gauntlet of appraisals, inspections, etc. and actually sell, the lack of inventory limits their options for moving. All of which underscores the need for an experienced agent with a talent for navigating transactions that involve a lot of contingencies.
High-end buyers make up the third group of influencers in our market. They’re a discerning bunch who want what they want and are unwilling to compromise. Prior to the last recession, Californians relocating to our area weren’t picky about our upscale home prices — everything in the Silver State felt like a bargain compared to the Golden State. But the recession changed the wealthy’s buying habits, too — they’re more cautious about the risk of getting upside-down in a new home. They’re savvier, and less inclined to think of home purchases in Nevada as “free money.”
This mindset, coupled with high-end home sellers who tend to price their property a bit too high (they have the luxury of being able to afford NOT to sell right away) creates stalemates at the upper end of our housing market. Luxury homebuyers and sellers can both benefit from real estate agents who are creative in their marketing efforts and capable of tapping into national and international networks of high-end buyers.
Amy Lessinger is the broker-owner of the Reno office of RE/MAX Realty Affiliates.