Frequently readers write in and ask about the rental market here in Reno. Unfortunately we don’t track the rental market as closely as we do the residential sales market, so we seldom can offer specific data. [Note: to our commenters who provide answers to these queries, thank you very much.] Anyway this morning’ RGJ contained a couple articles with rental stats, so I thought I would forward them to the blog.
1Q apartment rents in Reno-Sparks up over last year
Some stats from the article: (click on the link above to access the article in its entirety)
- Occupancy: Reno-Sparks’ average in the January-March period was 93.6 percent compared with 93.5 percent in the October-December 2007 time frame.
- Monthly rent: Reno-Sparks’ first-quarter average of $862 was down $4 from the previous period and $24 less than Las Vegas, but it shows a 0.7 percent increase from a year earlier.
Nevada ranks low in affordable housing
Some stats from the article: (click on the link above to access the article in its entirety.)
- In the Reno-Sparks area, only 21.2 percent of homes are affordable for those earning a median income.
- To be able to afford fair market rents in the state, a Nevada worker earning minimum wage needs to work at least 120 hours each week.
smarten
Thanks for reporting this Guy.
First of all, the stats come from RealFacts out of Marin County. This outfit regularly surveys rents, but ONLY from apartment complexes consisting of 25> units. So its relevance should be understood with those limitations in mind.
I never got from the story exactly what size [Reno/Sparks] apartment we’re talking about at $862/month. But I suspect from prior experience with RealFacts, it’s probably a 2BD/2BA. And what you didn’t see in the article [but it was reported on the news] was that the average comparable monthly rent in San Jose [Silicon Valley] was nearly $1,700/month!
So if you think Reno/Sparks rents are high and not that affordable to the masses, you need to take a step back. For we “rich Californian” transplants [or wannabes], rents are cheap in Reno/Sparks.
But of course when we look at purchasing a home as an investment to rent out in Reno, rents are so cheap we can’t break even on our monthly cash flow unless we put a whole lot down [which defeats the whole purpose, doesn’t it?]. So I guess what the Lord giveth, she taketh away.
And just for historical perspective, average rents in San Jose peaked in early 2000 at about $2,150/month. That was a very good time to be a Bay Area landlord [and I was]. Now ask yourself; what percentage of the Bay Area population was able to afford an average 2BD/2BA apartment in 2000 based upon housing costs of $2,150/month? Probably the same affordability index that RealFacts refers to for Reno/Sparks now. Yet there were essentially no vacancies, even at that high number. Go figure.
BanteringBear
With all due respect Smarten, comparing rents in San Jose to Reno is apples to oranges, and pointless. Wages pale in comparison, so it is all relative. What is quite obvious, is the fact that neither place is attractive from an affordability standpoint. This doesn’t bode well for companies trying to hire good people as the prospective employees will undoubtedly choose more affordable locales.
Phil
I am making the same salary here as I was in San Jose for the same company (different office).
smarten
What I was trying to say BB was that if you look at a straight average salary/rents comparison at some multiple you’re comfortable with, the average wage earner in San Jose can’t afford to rent [just like he/she can’t afford to rent Reno/Sparks]. Yet he/she does.
If you look at the average wage earner in San Jose, he/she can’t afford to buy [just like Reno/Sparks]. Yet he/she does.
If you go to New York or Paris, virtually no one can afford to buy. Yet they do.
So I don’t think you can look at an affordability index based upon median salary in a vacuum.
Although you may think Reno is an expensive place to live, rent or purchase a home compared to other places [like Colorado and Idaho], some of us think it’s pretty reasonably priced. And I know you think real estate prices must plummet because the average Joe can’t afford to buy, but somehow he/she can [just like in Paris, New York and Silicon Valley] notwithstanding average Reno wages.
Transplant
With all due respect, Bantering Bear has hit the nail on the proverbial head, smarten not so much. I’m a recent-ish transplant to Reno; the company paid a bunch of money to relocate me (that should indicate that I’m making a decent, higher-than-median salary) and I’m seriously looking into moving away after my year is up so that I don’t have to reimburse my employer for the moving expenses. Unfortunate for all concerned. Hopefully prices drop to a reasonable level before that becomes necessary, but it doesn’t look good. I’m sick of renting, but houses that look like something I should be able to afford are ridiculously priced. I suspect Reno is undergoing a drain of talent. I know of two out-of-towners that were offered positions in the last 6 months for my department alone that declined solely because of Reno’s housing prices.
Reno Ignoramus
Transplant, if you don’t mind my asking, where did you come from before you arrived in Reno?
Transplant
Sorry, RI. That would be giving away too much information. The last thing I need is someone from the company figuring out who this poster is. I will say this, I didn’t move here from the boondocks.
Reno Ignoramus
I understand Transplant. My guess is you didn’t come from Atherton….:)
You are quite correct about the price of housing in Reno keeping some folks away. It has been a problem for UNR, for example, for quite a while.
konvpalto
The presented statistics as it relates to the housing prices is not very telling. The appartments are mostly occupied by the younger people/students. More mature families (would-be buyers) would prefer to rent houses.
So the proper statistics is how many houses are offered for rent and at what price and how well that market is saturated.
The price increase headline is misleading as 0.7% increase over a year is a reasonabe adjustment for inflation.
smarten
Transplant: you say you’ve been here for less than a year and you’re sick of renting? Sorry, I just don’t get it.
IMO when you consider where it is you want to make your permanent home, housing affordability as a homeowner [versus renter] should come in towards the bottom of the list. I must presume there were things about Reno other than the cost of housing a year ago that you found sufficiently appealing to justify the move. If so, what has changed? The cost of homeownership [which BTW, is less than it was a year ago]?
We saw what I think you’re talking about in the San Francisco Bay Area starting about a decade ago. People began looking for houses in the Central Valley [Stockton, Manteca, Tracy], San Benito County, Sacramento and even Reno [i.e., Diane] simply because they could afford to purchase something in these areas [whereas they were completely foreclosed from homeownership in the Bay Area]. In other words they made home ownership the number one reason for moving and in the process, traded the Bay Area lifestyle for 4 hour [round trip] work commutes each day!
Once gas prices started increasing and over building in these areas resulted in housing DEpreciation, these “transplants” realized they had made a big mistake. Had they remained in the Bay Area as renters, IMO they would have been far ahead of the game even though they were sacrificing the prospect of home ownership.
There’s an incredible amount of very nice housing available for rent in Reno and compared to many other metropolitan areas, it’s pretty inexpensive [I just went on craigslist and searched all Reno/Tahoe rentals priced at under $1,500/month – I received 2,776 returns (I understand some are duplicate listings and others aren’t really in Reno proper, but 2,776?). Just for fun, I limited my search to Somersett (now I’m not a big fan of Somersett but there’s a lot of nice, new housing to choose from), again at under $1,500/month, and I found 13 rentals! Now how about this one on Lone Oak Trail ( http://reno.craigslist.org/apa/619285433.html ); brand new 3 BD/2.5BA plus loft with maple cabinets, granite kitchen counters, two tone paint, jetted tub, access to Somersett Clubhouse with all ammenities including swimming pool, spa, tennis courts, cardio, etc. for only $1,450/month?]. And this is just one example!
I think given a choice all of us would prefer to be homeowners vs. renters. But when the cost to rent/own ratio is as out of kilter as it is in Reno [you’d be spending a whole heck of a lot more/month to own the Somersett rental I’ve pointed you to], why leave Reno given its other advantages?
I don’t know where you’re contemplating returning [or relocating] to but I can’t imagine it offers more attractive housing prices unless it’s either a very depressed area or located in the boondocks. And if it is, what kind of lifestyle does it offer compared to Reno?
I’d urge you to take a longer look at your options in Reno. If BB and RI are correct that housing is going to get a whole lot worse before it gets better, your options in the next year or so are going to be even greater than the many that are right before your eyes!
SkrapGuy
Smarten that Somersett rental you link to just shows how totally out of whack the rent v. own equation still is in Reno. Let’s see. I could buy that house (or one just like it) and pay 2.5 times the cost of rent, all the while I get to ride the market down on my depreciating asset until we finally hit the bottom (whenever that will be) and then get price stagnation for years to come.
Yes, that’s a tough call.
Tom
It was Smarten, I believe, who commented that Somersett was not one of his favorite areas; however, Diane chose to live there. I would appreciate comments and comparisons from those of you in the know locally, comparing Somersett with the Saddlehorn or Mt. Rose Highway – adjacent areas above Galena High School. I am intersted in housing density, proximity of entertainment amenities, traffic, driving time for shopping and restaurant access, the mix of people, lifestyle issues, how long it takes to get to the airport, not investment issues. We see more favorable pricing available in Somersett, so there must be a reason people in the suburban southwest value their location more. Thank you for any comments.
bob
Somersett is in the middle of knowwhere, it snows more and is earthquake alley. + no real retail is close by. Good for retired folk who dont need to venture out much, not the everyday commuter. Unless you like buying uber amounts of gas to get around reno.
Reno Ignoramus
Hi Tom,
It does snow more there compared to downtown, because its elevation is higher than downtown, but probably not appreciablly more than the areas above galena HS.
There is essentially no retail or restaurants at all, but again, not much different than the areas above Galena HS.
It is a bit of a drive, by Reno standards, to get to shopping and activity, but again, not much different than the areas above Galena, and perhaps nothing at all compared to SoCal standards.
It is all new, having all been built post 2003, and thus has that no trees look of new developments. It does have golf course sites, but none of the vegetation, desert style, is mature. Unlike the upper Galena area, there is no forest.
The house sizes are all over the place from 1250 sq. ft. to 6000 sq. ft.(There is one of 9000 sq.ft.) Some neighborhoods look pretty pedestrian. Even the large houses are packed onto small lots. If you are looking for some shoutin’ distance between you and your neighbnors, Somersett may not be for you.
bob
I agree with RI, however I think Old Southwest is better than both those places!