Last week Zillow posted a piece providing an analysis on how homes in the most-affordable market segment are appreciating in value the fastest — relative to homes in the mid- and top-priced tiers. See Zillow’s Bottom Tier in Top Gear: Why the Most Affordable Homes are Gaining Value the Fastest
From the Zillow piece: “…in 44 of the nation’s 50 largest markets, home value growth was fastest in the bottom third segment.” Furthermore, “The spread of home value growth between the low-, middle-, and top-tier market segments is increasing…”
The Zillow piece includes an interactive chart where one can select from one of the top 100 metros in the U.S. in order to see the home price growth across the low, medium, and top-tier homes for each reason. See Chart below…
Using this data, the Zillow piece noted: “Among a wider pool of the nation’s 100 largest markets, bottom-third home values grew the fastest year-over-year in February in Boise (27.2%), Phoenix (19.4%) & Spokane (18.4%).”
Because Reno-Sparks is not included in Zillow’s top 100 markets, and curious as to how our market compared to those nationally, I pulled February home sale data, by tiers matching those of Zillow’s analysis.
For my analysis, the Low, Middle, and Top tiers represent the bottom-third, middle-third, and top-third of home sales, respectively for February 2021 and February 2020. The median sales price for each tier was used for calculations of year-over-year price growth rates.
As can be seen in the table above, it is Reno-Sparks’ top-tier segment that has seen the most home price growth year-over-year. The median sales price in the top-third of homes appreciated at 26.6 percent year-over-year; whereas the bottom- and mid-tiers appreciated at 15.1 and 14.6 percent, respectively. This observation is counter to that seen in the majority of U.S. markets.
As mentioned above, the Zillow piece noted, “…in 44 of the nation’s 50 largest markets, home value growth was fastest in the bottom third segment…” However, the piece also points out one metro, Austin, Texas, stands out from the others…
Austin stands out as a metro where growth of top-tier home values has outpaced low-tier home value growth, although the demand for low-tier homes is catching up to the top-tier homes. In February 2021, the top-tier homes grew the fastest at 14.9%, followed closely by the mid-tier homes at 14.5% and low-tier homes at 14.0%.
In this regard, Reno, Nevada more closely resembles Austin, Texas.
What are your thoughts on Reno’s top-tier appreciation? Are you surprised? Please leave your comments below.
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 – April 4, 2021. Note: This information is deemed reliable, but not guaranteed.