Residential sales still booming
It’s unlikely anyone in the real estate business in northern Nevada was particularly surprised last week when an industry group said the state led the nation in sales of existing homes in the first quarter.
Realtors say the area’s white-hot market shows no signs of cooling.
If anything, it may heat up more during the traditionally busy summer sales season.
The National Association of Realtors said last week resales of homes jumped 28.5 percent in Nevada, compared to an average of 2.2 percent nationally.
“This is the most exceptionally sustained real estate market I’ve ever seen,” says Rick Lund, president of Ferrari- Lund Real Estate in Reno.
Snapshots from a feverish market:
* Homes priced at $250,000 or less the median price these days in the Reno-Sparks market is about $175,000 typically draw three bids within a half day after they come on the market.
buyers, need to move quickly.
“If a good house comes on the market, they have to be ready to make a decision immediately,” said Lund.
The strong demand results from interest rates that remain at 40-year lows as well and population growth in the area.
Tom Powell, president of IntoHomes, a residential mortgage lender, said the low rates have proven particularly attractive to the move-up market.
Homeowners do a little math and discover they can buy a lot more house while keeping their monthly payment the same.
That, in turns, opens inventory to be purchased by apartment dwellers who want to buy their own homes.
“Interest rates are what is really driving the market,” said Fennell.
Although the area’s economy has cooled, it’s still stronger than most parts of the United States.
New jobs mean new residents.
Fennell and Lund agree that much of the population growth has come from California, which continues to battle the effects of the high-tech meltdown and a state budget crisis.
“If it gets worse in California, it gets better here,” Lund said.
Another factor is the continued flow of retirees out of California in search of a better lifestyle and lower taxes in Nevada.
While demand surges, supply hasn’t kept pace.
“There’s not a lot of inventory in the marketplace.
Builders can’t get houses built fast enough,” said Powell.
Tight inventory, in fact, may be the only thing dampening the residential market as the weather warms.
“If we had the inventory, we would break all records this summer,” said
More supply will begin coming into the market later this year as the effects of major new subdivisions are felt in the market.
the new Somersett community in northwest Reno, for instance, includes 2,650 lots.
The Damonte Ranch area in southern Reno will bring another 5,600 lots into the market.
Business is slower, meanwhile, in market for upper end real estate at Lake Tahoe.
Compared to the first quarter of 2002, homes selling for less than $1 million in the Tahoe Basin decreased by 16 percent in 2003, with sales of homes selling for more than $1 million decreasing by 5 percent, found a study by Lake Tahoe-based real estate agency Chase International.
Some of the slow sales may be seasonal.
“As a rule, and in looking at the past three years specifically, the third and fourth quarters especially in August and October have proven to be the most active and lucrative, with often as much as 30 percent of sales for the entire year occurring in each quarter,” said Sue Lowe, corporate vice president for Chase International.
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