While luxury home sales weakened across much of the U.S. in 2017 (See Move.com’s Demand for Luxury Home Weakened in 2017 — High-end inventory glut contributes to slow down), the luxury market in Reno, Nev. saw the opposite trend. In fact, Reno’s luxury market can be described as booming.
Before I get into the numbers, let’s define luxury. The afore-linked-to Move.com piece above defines luxury as “…the top 5 percent of transactions based on sales price.”
There were 6,818 houses sold in the Reno-Sparks metro area in 2017. The top 5 percent of those sales numbered 341 units sold, and those ranged in sold price from $769,000 to $3.5M. Using $769,000 as a cut-off price and applying to 2016, we find that 217 houses sold for $769,000 and above in 2016. Resulting in 2017 seeing a greater than 57 percent increase in the number of such high-end sales.
$769,000 is but one price point. Many local realtors (myself included) typically define luxury properties as those homes priced at $1 million and above. And it seems that the $1M minimum price point is not unique to Reno and Sparks, Nevada. A recent U.S. News & World Report piece had this to say regarding the luxury price point, “In many large U.S. cities and metro areas, the typical luxury price point is $1 million and above”. [See U.S. News & World Report‘s How to Define Luxury Real Estate in Today’s Market]
Using $1 million as the cut-off price and performing the same comparison between 2016 and 2017 as above, we find a similar increase. 94 $1M-plus homes were sold in 2016. 2017 saw a whopping 143 $1M-plus sales. Yielding a more than 52 percent increase in 2017 luxury home sales over 2016 luxury sales.
The table below shows the rate of growth of luxury homes sales in Reno-Sparks. Note the surge in 2017 relative to prior years’ growth. If 2018 sees a similar increase as seen in 2017, sales of $1M-plus homes may number well above 200 unit sales.
|Year||Number of $1M+ Sales||Year-over-Year Increase||Percent of Total Unit Sales|
As the number of such sales increase, they also begin to comprise a larger share of our market. [See the last column in the table above.]
Fun fact: although the number of $1M-plus sales accounted for just 2.1 percent of unit sales in 2017, these $1M-plus sales accounted for 7.8 percent of total sales volume in 2017. [or $208,206,154 of $2,667,849,842]
If one prefers to define luxury sales using the first definition presented above — the top 5 percent of transactions based on sales price — the table below shows how the 5% cut-off price has trended upward over the past few years.
|Year||Top 5% Price Point||Year-over-Year Increase||Percent of Total Sales Volume|
In the table above, the “Top 5% Price Point” column shows the minimum price of the top 5 percent of transactions based on sales price. That minimum price has increased greatly over the past few years.
The last column shows what proportion of total sales volume for the year does the top 5 percent highest priced sales comprise. For example, in 2017 the top 5 percent of transactions, based on sales price accounted for 14.2 percent of total sales volume that year. [or $378,392,425 of $2,667,849,842]
Regardless how one defines the luxury home market, Reno’s is booming.
Note: The home price and other data reported above 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 – January 15, 2018. Note: This information is deemed reliable, but not guaranteed.
- How did Reno, Nevada’s $1M+ real estate segment perform in 2015? [published January 6, 2016]
- Million dollar (and above) home sales double in 2013 [published November 13, 2013]