Reno’s bubble compared to the U.S.’s

Last week Zillow released its most recent Zillow Home Value Index numbers for the 156 metropolitan areas it tracks. The news out of the report was that, nationwide, “the rate of monthly depreciation has stabilized around -0.2 percent to -0.3 percent over the last few months”. Additionally, Zillow expects homes values to fall another 2 – 4 percent before reaching a bottom in 2012.

You can see Zillow’s full report here: U.S. Home Values Continue to Fall, But Rate of Decline Stabilizes

Reno compared to the U.S.

If you haven’t explored Zillow’s market stats lately, Zillow’s website provides functionality that allows consumers to select a market or markets across the US and compare the performance of each against the national median. For example, I selected the Reno metro area and compared it to the U.S. See the embedded interactive chart below.

US Zillow Home Value Index

The housing market bubble that Reno has experienced is readily apparent in the chart above. I selected a ten-year time frame that easily shows the dramatic rise and fall of the Reno housing market – especially compared to the nation’s housing market as a whole. But another thing that stands out is just how much more and how much faster the Reno market has fallen, relative to the US market.

The data underlying the chart shows Zillow’s October Home Value Index for the US has dropped 23.7 percent from its peak of $193,900 in May 2007. Compare that to the decline in Reno’s October Zillow Home Value Index of 58.5 percent from it’s peak of $360,800 reached in January 2006.

Also noteworthy is that Reno’s ZHVI is on the verge of falling below the ZHVI for the nation as a whole. October’s ZHVI for Reno and the U.S. were $149,700 and $147,900, respectively. Given the trend line of each, Reno’s ZHVI could easily fall below the U.S.’s ZHVI by the end of this year. When this occurs it will be the first time, since Zillow has been tracking this data, that Reno’s number would be lower than the nation’s.


  1. Martin

    The median price of houses in Reno has dropped 61% since the bubble peak 6 years ago if we use the data suplied by the NNMLS. Does anything else need to be said? Only when an enormous bubble bursts can the price of houses decline 61%. Nice chart, but hardly news to the readers of this blog.

  2. Carol

    Of the absolute worst housing markets in America since 2006, where does Reno rank? Does anybody know?

  3. Carleton

    Based upon available data, I would put Reno at about the 6th worst housing market in America since 2006. Stockton, Detroit, Phoenix, Cape Coral, Fla., and Las Vegas probably are ahead of Reno in awfulness, but actually not by all that much. (Detroit makes the list not because it had an immense bubble, like all the others did, but for other well known reasons about Detroit). Clearly Reno had one of the biggest bubbles in all of the USA and has experienced value declines among the worst in all of the country. LV has recieved all of the national press and Reno has been overlooked by the national media.

  4. Lynne B

    This might not be the right thread to put this in, but thought I would throw it out & see if I get a response. We have a 5.875% loan, 193k balance loan originated in 2003. Zillow estimate on our house is $231,000. We would like to reduce our monthly payment which is currently $1319 so that my husband can retire in the next 2 years. I called our lender who was not very helpful in providing rate information and didn’t seem to offer any advantage to our refinancing with them as opposed to somewhere else. We have excellent credit and an income of about 100k. Where should I go with this? Zillow loans, Quicken, a local lender? Should I wait for harp II? Since we don’t want to go to a 15 year loan would Harp II really offer us any advantage?

  5. Sean

    Lynne- Try El Dorado Savings Bank. They are a local lender, their headquarters is in Placerville, CA but have a location in sparks on Vista. Cindy is the branch manager there and everyone is very friendly and easy to deal with.

  6. Lynne B

    thanks Sean, I will do that.

  7. Ralston

    Nothing personal to Lynne, but I find it interesting that somebody nearing retirement wants to take out a 30 year loan. We truly have a become a debt based society haven’t we? When I was a kid, I remember the “mortgage burning” parties when the grandparents would finally get the mortgage paid off. The thought of heading into retirement with a 30 year mortgage was incomprehensible.

  8. Lynne B

    Fair question Ralston… I am not going to go into a lot of personal detail, but we bought this home when in our 50’s with about 40k down. Unfortunately, it’s probably not worth what it was when we bought it 11 years ago. It was never our plan to have a mortgage into our 80’s. We assumed that with a normal rate of appreciation, after 15 years or so, we could sell and buy a smaller place for cash and not have a mortgage. That clearly is not going to happen. At this point, why try to pay off a mortgage quickly when your house continues to drop in value? For us, it makes more sense to increase our cash flow, preserve our savings and 401k and not think of this house as something that will ever have value, but instead consider it much as you would a rental.

  9. Lynne B

    I checked earlier and Fannie Mae owns the loan and (which is really odd since I never saw fannie mae on any loan docs) I just can’t figure out if there is any real advantage to waiting until lenders figure out how to process HARP II..It doesn’t look like there is unless you are really upside down

Leave a Reply

Your email address will not be published. Required fields are marked *