This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

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RSAR Monthly Market Report for Fernley, Nevada – September 2018

The Reno/Sparks Association of REALTORS® (RSAR) has released its Fernley Market Report for September 2018.

From September’s report…

“We are seeing a leveling trend of the median sales price in the area,” said Doug McIntyre, 2018 RSAR President. “Since January of this year, median price in the Fernley has hovered in the $240K to $245K range, except during the summer months, when it reached a high of $255,000.”

  • The median price at $241,750 is down 4% from August and up 9% from September 2017.
  • Fernley’s unit sales at 60 are up 5% from August and up 11% from September 2017.
  • September new listings at 57 are down 15% from August and down 15% from September 2017.
  • The Fernley market has 2.1 months supply of inventory, a seller’s market.

Click on the graph below to see the entire RSAR market report for September.

Fernley Market Report, September 2018

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RSAR Monthly Market Report for Reno-Sparks, Nevada – September 2018

The Reno/Sparks Association of REALTORS® (RSAR) has released its Reno-Sparks Market Report for September 2018.

From September’s report…

“We are seeing a leveling trend of the median sales price in the area,” said Doug McIntyre, 2018 RSAR President. “Since March of this year, median price in the Reno/Sparks has hovered in the $370K to $375K range, except during the summer months, when it reached a high of $389,000.”

  • The September median price at $374,000 is up 1% from August and up 11% from a year ago.
  • September unit sales at 439 are down 22% from August and down 28% compared to September 2017.
  • September new listings are down 22% at 630 compared to August and up 10.3% from one year ago.
  • The Reno market is a seller’s market, at 3.1 months supply of inventory. Months supply of inventory is the time it would take to exhaust the active inventory at the current rate of sales.

Click on the graph below to see the entire RSAR market report for September…

Reno-Sparks Market Report, September 2018

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

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Washoe County, Nev. real estate licensees at record highs

  • The number of active Salespersons licensees in Washoe County is at a ten-year high
  • The number of active Broker licensees in Washoe County is at an all-time high

The Nevada Real Estate Division (NRED) has released its latest statistics on the number of real estate licensees in the state (Table below).

source: Nevada Real Estate Division

The NRED tracks the number of both active and inactive real estate licensees across three licensee types – broker, broker-salesperson, and salesperson. The table above shows the numbers of each licensee type broken out by Nevada counties.

Drilling down and focusing on Washoe County (the county in which Reno, Nev. and Sparks, Nev. are located), we find that Washoe County currently has 3,157 total active licensees (across the three licensee types: broker; broker-salesperson; and salesperson), and 527 total inactive1 licensees.

Today I want to compare this most recent data with that of previous reports from the NRED. I would like to look at any current and historical trends in the number of licensees. I also want to take a look at how the number of licensees tracks with the median sales price. Is there a correlation? Let’s take a look.

The NRED has published real estate licensee statistic going back to June 2007. In the table below I’ve compiled this data into a stacked bar chart showing the number of Washoe County active and inactive licensees for all three licensee types (left Y axis). Additionally, I’ve overlaid a line graph showing the monthly median sales price for Reno and Sparks, Nev. over the same time period (yellow line and right Y axis).

From the chart above we can observe a correlation between the number of licensees and the median home price. Generally speaking, the higher the median sales price, the higher the number of licensees.

However, the chart also seems to indicate that the trends in the number of licensees tends to lag behind the behavior of the median home price (see the yellow line). For example, after the housing bubble burst in 2006 home prices plummeted for six years before bottoming in January 2012. The number of licensees also fell during this time, however it also continued to decline even as home prices turned the corner and began to increase.

It was not until November 2013 (nearly two years after home prices bottomed) that the total number of licensees hit it’s bottom. In November 2013 the number of Washoe County active and inactive licensees, across the three license types, totaled 2,998. Compare that number to the 4,458 licensees in June 2007 (the earliest data available). Over that 6-1/2 year period the number of licensees decreased nearly one-third (32.8 percent).

However, since bottoming in 2013, the total number of licensees has been increasing steadily (bar chart above) and currently totals 3,684. Though this current total is not as high as the numbers observed during the peak of the housing bubble, it does represent a 22.9 percent increase over that November 2013 bottom, and currently sits at a 9-year high.

Let’s look at only Salespersons

The bar chart below depicts only the Salesperson licensee data (both active and inactive) from the bar chart above.

Similar trends can be observed as were seen in the cumulative chart. Salesperson licensees totaled nearly 3,000 in June 2007; fell to 1,902 (a 36.1 percent decline) by November 2013; and currently total 2,584 (a 35.9 percent increase over November 2013) — again a 9-year high.

Drilling down a bit further, if we look at the number of active Salesperson licensees only, we see that the current 2,326 active Salespersons is at a ten-year high, and is on track to surpass the record high set in June 2007. I predict this June 2007 record will be broken with the next NRED report.

What about Brokers?

The chart below depicts only Broker licensees (both active and inactive) data.

Here a different picture emerges. Similar to the trend seen with the Salespersons licensees numbers, the total number of active and inactive Broker licensees was highest in June 2007 (the earliest date for which the NRED has published data), and then declined over the next several years until hitting bottom in November 2013. The total number of active and inactive Broker licensees fell from 675 (June 2007) to 517 (November 2013) — resulting in a 23.4 percent decline over that time period.

But, unlike the trend that was seen by the number of Salesperson licensees, the total number of Broker licensees did not go on to make a sustained recovery to historical levels. Instead the more recent totals have remained relatively flat.

However, if we drill down (as we did with Salespersons licensees) to look at only active Broker licensees, a wholly different picture comes to light.

The chart above shows the number of active Broker licensees since June 2007. What we see here is a relatively consistent number of active Broker licensees, hovering just above 400, throughout the years since this data has been made available.

That being said, one noteworthy observation from the above numbers is that the current number of active Broker licensees is at an all-time historical high — currently coming in at 430 active Brokers for September 2018. That number is up 5.4 percent from May 2018 and up 7.5 percent from December 2017. So, there appears to be a recent upward trend over the past year. This will be something to watch for in the next report from the NRED.

Thank you for reading. As always, I welcome your comment and questions.

1. Regarding “active” and “inactive” statuses — a license that is current (renewed), unsuspended or unrevoked, and is not affiliated with a broker, developer, or real estate company is an “inactive” license. The inactive status does not allow the individual to conduct any real estate transactions until the license is placed on “active” status.  Source NAC 645.040

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September median sales price and other market metrics

  • After setting a record high of $389,000 in July, the Reno-Sparks median home price pulled back dramatically in August — falling to $370,000, or a nearly a 5 percent one-month decrease. Did home price gain anything back in September? Let’s take look…

September’s median sales price came in at $373,500; for a gain of 0.9 percent over August’s median sales price. Year-over-year, September’s median sales price is up 10.9 percent.

Despite the slight increase in median sales price, September’s median sold price per square foot (PPSF) fell slightly to $210.74/sq.ft., down 0.4 percent from August’s median sold PPSF of $211.67/sq.ft. September’s median PPSF is up 8.3 percent year-over-year.

Lack of available for-sale inventory continues to take its toll on the number of homes sold in the Reno and Sparks markets. Units sales in September totaled 438 homes sold for the month — down a staggering 22.3 percent from the 564 home sold in August.

Now, to be fair, there is some seasonality at work here (i.e. homes sales are cyclical — typically peaking in June/July and bottoming in December/January [ See Chart] ). However, consider that last year 613 homes were sold during the month of September 2017. This means that this year’s September sales were down a whopping 28.5 percent year-over-year.

And, as another comparison, last year’s August-to-September’s drop in sales was 14.9 percent — compare that to the aforementioned 22.3 percent this year, and you’ll see this year’s drop in sales from August to September is nearly 50 percent greater than last year’s.

Many factors are contributing to the low number of sales: lack of inventory (especially affordable inventory); rising interest rates; homebuyer uncertainty; and, again, a bit of seasonality.

The good news is currently available inventory continues to increase. Presently 1,332 homes are available for purchase in the Reno-Sparks market. Given the current rate of home sales, available inventory equates to just over three months supply — inching us closer to a “balanced”, rather then “buyers”, market.

Currently available inventory is up 10.3 percent over the 1,208 homes for sales this time last month. Year-over-year, the current number of available homes for purchase is up a whopping 44 percent.

Despite the gains in the number of homes available for purchase, less than one-third (31.4 percent) are priced at, or below, the current median sales price.

The persistent issue of lack of affordable homes for sale in Reno and Sparks continues to weigh on pending sales, as well. Presently 725 homes are pending sale in the Reno-Sparks market. That number is down 8.2 percent from the 790 homes pending sale this time last month. Again, there is some seasonality to take into account, but consider this: year-over-year, current pending sales are down 18.4 percent from September 2017.

September’s median days on market (DOM) came in at 60 days — an increase of three days over August’s DOM. September’s DOM is in line with last year’s 59 days.

September sales by type, break out as follows:

  • REO sales: <1% – unchanged from August’s <1%
  • Short sales: <1% – unchanged from August’s <1%
  • Subject to Court Approval sales: <1% – unchanged from August’s <1%
  • Relocation sales: <1% – unchanged from August’s <1%
  • Equity sales: 97% – down from August’s 98%

September sales by price band, break out as follows in the table below…

Sales by Price Segment
sales price ($000’s) units sold cumulative % of sales
0 – 99 0 0.0%
100 – 199 3 0.7%
200 – 299 93 21.9%
300 – 399 168 60.3%
400 – 499 80 78.5%
500 – 599 34 86.3%
600 – 699 28 92.7%
700 – 799 12 95.4%
800 – 899 1 95.6%
900 – 999 4 96.6%
1M+ 15 100%
total 438

15 homes sold for over $1,000,000 in September. Last year a total of 143 homes sold for over $1,000,000 — for an average of 12 per month. Thus far, year-to-date, 172 $1M+ homes sales have occurred. If this pace continues, 2018 will see well-over 200 sales of $1M+ homes. [ See related post: Reno, Nevada Luxury Home Prices Gain Momentum in First Half of 2018.]

September’s median sold price for houses and condos combined was $351,000 — unchanged from August’s median sold price for combined sales of houses and condos.

The table below contains the past 13 months of data[1]

Past 13 Months of Home Sales Data
Month Year # Sold Median Sold Price Sold Price per Sq Ft Median DOM # of Actives # of Pendings
Sep 2018 438 $373,500 $210.74 60 1,333 725
Aug 2018 564 $370,000 $211.67 57 1,208 790
Jul 2018 565 $389,000 $216.37 53 1,154 838
Jun 2018 601 $381,900 $215.98 49 923 906
May 2018 574 $375,000 $209.04 49 725 920
Apr 2018 491 $374,000 $205.34 51 638 891
Mar 2018 548 $375,000 $200.88 50 529 814
Feb 2018 444 $370,000 $193.90 61 528 796
Jan 2018 406 $359,950 $191.74 68 514 782
Dec 2017 493 $345,000 $194.35 69 605 578
Nov 2017 534 $353,500 $197.03 62 767 713
Oct 2017 555 $345,000 $191.48 64 851 843
Sep 2017 613 $336,900 $194.62 59 925 889

Thank you for taking the time to read this market report. As always, your comments and questions are welcomed.


1. The medians table above is updated on a monthly basis. The median home price data reported covers the cities of Reno, Nevada and Sparks, Nevada [NNRMLS Area #100]. Residential data includes Site/Stick Built properties only. Data excludes Condo/Townhouse, Manufactured/Modular and Shared Ownership properties. Data courtesy of the Northern Nevada Regional MLS – October 3, 2018. For historical home sale data back to 1998 click here. Note: This information is deemed reliable, but not guaranteed.

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This week’s real estate headlines

Here are a few national real estate-related stories and news pieces that came across my screen this week…

Posted in headlines, News | Tagged , | Leave a comment

What is an Accessory Dwelling Unit? And can I build one in Washoe County?

If you haven’t heard yet, you will soon: Amazon just invested millions into a prefab homebuilder startup called Plant Prefab.

I woke up this morning and saw the news of Amazon’s investment all over the internet…

While most of the news stories focused on Amazon’s investment as an avenue for Alexa and smart home technology expansion, I was more interested in the prefab homes (prefabricated) offered by Plant Prefab. Plant Prefab offers a number of different models, as well as custom options.

One model that caught my eye is their AD1 Accessary Dwelling Unit, or ADU. This 400-sq.ft., one-bedroom, one-bath ADU has a base starting price under $100,000.00, and can be used as a stand alone “tiny house“, or as a guest house or “granny flat.”

I think these are pretty cool, and can see a whole host of uses for them: the aforementioned guest house; kids clubhouse; AirBnB rental; etc. Intrigued, the first question that came to mind was, “Am I allowed to install one of these ADUs on my property?”

So I visited the Washoe County Planning and Building Division to get some answers. The short answer is, it depends.

Washoe County, Nev. defines a “detached accessory dwelling unit”, or DAD, as a dwelling unit on the same lot as the main dwelling unit, but which is physically separated from the main dwelling unit. And there are a whole host of requirements for which properties may or may not have one installed — See Washoe County’s Planning and Development information on Detached Accessory Dwellings for the scoop.

From the linked Washoe County Detached Accessory Dwellings info above:

Can I build a DAD?

  1. How large is the property?
  2. a. Under 12,000 sq. ft. (.28 acres) – No, not allowed
    b. 12,000 sq. ft. or more – may be permissible
    c. Located in Incline Village or Crystal Bay, minimum of one acre required
    d. If on Septic, minimum of 2-acres required (for a second septic system –, this is a Health District requirement for the second kitchen) For more information see: https://www.washoecounty.us/health/regulations.php

  3. What is the regulatory zone of the property? [Ed. note: you may look up the zoning for your property on the Washoe County Assessor’s site.]
  4. a. Medium Density Suburban (MDS) – Special Use Permit required before applying for building permit
    b. Low Density Suburban (LDS), High Density Rural (HDR), Medium Density Rural (MDR) or Low Density Rural (LDR) – Detached Accessory Dwelling Administrative Review (DADAR) required before applying for building permit
    c. General Rural (GR) or General Rural Agriculture (GRA) – Allowed use, Building Permit required
    d. All other regulatory zones – No, not allowed

  5. How large can the accessory dwelling be?
  6. a. MDS – 50% of living area of main house, up to 800 sq. ft., whichever is less
    b. LDS, HDR, MDR, HDR or GR – 50% of living area of main house, up to 1,500 sq. ft., whichever is less
    c. GRA – no size limit

[Note: rules and regulations governing detached ADUs vary greatly across states, counties and municipalities, so your milages may vary.]

Unfortunately, I learned that my lot size is not large enough to allow a detached dwelling unit. 🙁

How about yours? Would love to hear your thoughts.

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