Regular readers of this blog are familiar with the monthly numbers I post for the Reno-Sparks housing market. I’ve tracked these numbers for a few years and will continue to do so; however today I wanted to take closer look at the Reno-Sparks housing market by breaking out the data by MLS area.
Because we find ourselves midway through the current year I decided to pull all residential sales for the time period between January 1, 2011 and June 30, 2011. I pulled data only for houses (no condos). [See Note that follows at the bottom of this post for additional criteria used.]
Click here to access a spreadsheet of data that I discuss in this post. This spreadsheet shows all forty MLS areas where sales have occurred since the first of this year.
Click here to access a map showing the MLS areas as currently defined by the Northern Nevada Regional MLS.
What’s selling?
I’m frequently asked, “Where are homes selling?” Although the data shows home sales occur throughout the Reno-Sparks area, clearly some areas see many more sales than others. The table below shows the top five areas, by number of sales, during the first half of this year.
| Rank | MLS Area | Number of Sold homes |
|---|---|---|
| 1 | Reno – South Meadows | 233 |
| 2 | Reno – Stead | 198 |
| 3 | Sparks – East | 194 |
| 4 | Spanish Springs – South | 191 |
| 5 | Sparks – Suburban | 188 |
The area that has had the most number of sales this year is Reno’s South Meadows area – with 233 houses sold. Stead comes in at 2nd-place with 198 units sold. Of the forty MLS areas included in the Reno-Sparks area, these top-five areas have accounted for 37 percent of the houses sold this year. Half the sales this year can be found in the top seven MLS areas.
What areas had the least number of sales?
| Rank | MLS Area | Number of Sold homes |
|---|---|---|
| 36 | Virginia City Highlands | 7 |
| 37 | Pleasant Valley | 6 |
| 38 | West Washoe Valley | 6 |
| 39 | Reno – Red Rock | 5 |
| 40 | Reno – Downtown Core | 2 |
It should be noted that this data includes only houses and excludes condominiums. Not surprisingly, Reno’s Downtown Core ranks in last position for home sales. If condos had been included, Reno’s Downtown Core would show 34 sales for the same period.
Units Sold is only one metric to consider. Because the average sales price varies greatly from area to another, another metric to consider is volume sold. Let’s take a look at the top five MLS areas ordered by Dollar Volume Sold.
| Rank | MLS Area | Dollar Volume Sold |
|---|---|---|
| 1 | Reno – South Meadows | $48,249,701 |
| 2 | Reno – South Suburban | $39,855,450 |
| 3 | Spanish Springs – South | $38,557,491 |
| 4 | Reno – Northwest Suburban | $33,605,530 |
| 5 | Sparks – Suburban | $33,176,800 |
Notice in the table above that although the South Meadows area still retains the number one spot, Stead is no longer in the top-five area. In fact, by dollar volume sold, Stead drops down to the 12th position. [Again refer to the spreadsheet of data to see all 40 MLS areas.]
Reno’s South Suburban area takes the number two spot when looking at total sales volume; however the South Suburban area had less than a third of the number of sales that the South Meadows enjoyed. Then how can the South Suburban area’s volume be so high? It all comes down to units times price. Which brings us to…
Average and Median Sales Price
The table below shows the top five MLS areas arranged by median sales price. West Washoe Valley tops the list with a median sales price of $595,000. However, with only six sales since the first of the year, West Washoe Valley sees less than a fifth of the dollar volume that Reno’s Southwest Suburban area sees. Reno’s Southwest Suburban area’s forty sales this year exhibited the second highest median sales price of $565,000.
| Rank | MLS Area | Median Price | Average Price |
|---|---|---|---|
| 1 | West Washoe Valley | $595,000 | $869,983 |
| 2 | Reno-Southwest Suburban | $565,000 | $679,593 |
| 3 | Reno-South Suburban | $452,500 | $538,587 |
| 4 | Verdi | $365,000 | $496,705 |
| 5 | Reno-Southwest | $294,500 | $343,196 |
This table below shows the MLS areas with the lowest median sales price.
| Rank | MLS Area | Median Price | Average Price |
|---|---|---|---|
| 35 | Reno-Stead | $95,500 | $92,236 |
| 36 | Reno-North | $89,900 | $114,167 |
| 37 | Sparks | $85,300 | $87,890 |
| 38 | Reno-Southeast | $82,500 | $85,762 |
| 39 | East Truckee River | $75,000 | $69,250 |
| 40 | Reno-Downtown Core | $48,000 | $48,000 |
Drop in Median Price
Regular readers know that house prices in the Reno-Sparks market are now approximately 58 percent off their bubble highs. However that drop is for the market as a whole. Although no area in the Reno-Sparks housing market has been immune from the post-bubble price declines, not all areas have fallen equally.
To determine each MLS area’s amount of decline from its peak, I looked at the six month period that provided the highest median price sold for the Reno-Sparks market. I chose to use a six-month period because 1) I wanted to make sure I had enough data points to make a comparison by MLS area meaningful, and 2) six months is the same period time in 2011 to which I am comparing. The six month period I found ran from August 2005 to January 2006.
The Reno-Sparks market’s median sold price for the six months running from August 2005 to January 2006 was $355,000. The market’s median sold price for the first half of this year was $155,500 – yielding a 56.2 percent decrease. So how do the median declines appear when broken out by MLS Area? [See all the deltas here.]
The ten MLS areas that exhibited the greatest declines from their approximate peak pricing are shown in the table below.
| Rank | MLS Area | Aug 2005 – Jan 2006 Median Price | Jan 2001 – Jun 2011 Median Price |
Change |
% Change |
|---|---|---|---|---|---|
| 1 | Reno – Northwest Foothills | $906,273 | $267,500 | ($638,773) | -70.5% |
| 2 | East Truckee River | $239,000 | $75,000 | ($164,000) | -68.6% |
| 3 | Sparks | $259,900 | $85,300 | ($174,600) | -67.2% |
| 4 | Reno – Southeast | $250,000 | $82,500 | ($167,500) | -67.0% |
| 5 | Reno – Stead | $285,000 | $95,500 | ($189,500) | -66.5% |
| 6 | Reno – Rancho Haven | $475,000 | $162,000 | ($313,000) | -65.9% |
| 7 | Reno – North | $255,000 | $89,900 | ($165,100) | -64.7% |
| 8 | Reno – North Valley | $302,500 | $113,950 | ($188,550) | -62.3% |
| 9 | Reno – Donner Springs | $318,000 | $123,000 | ($195,000) | -61.3% |
| 10 | Sparks – East | $310,000 | $120,500 | ($189,500) | -61.1% |
As can be seen in the able above, Reno’s Northwest Foothills area, which contains Somersett, has experienced the greatest drop in prices – coming in at more than 70 percent off its peak sold prices.
And what areas have weathered the economic downturn with the least price decline?
| Rank | MLS Area | Aug 2005 – Jan 2006 Median Price | Jan 2001 – Jun 2011 Median Price |
Change |
% Change |
|---|---|---|---|---|---|
| 30 | Reno – South Meadows | $415,000 | $199,990 | ($215,010) | -51.8% |
| 31 | Reno – Golden Valley | $350,000 | $177,000 | ($173,000) | -49.4% |
| 32 | Reno – Old South Suburban | $500,000 | $255,000 | ($245,000) | -49.0% |
| 33 | Reno – West Suburban | $425,000 | $227,750 | ($197,250) | -46.4% |
| 34 | Reno – Old Southwest | $388,000 | $210,000 | ($178,000) | -45.9% |
| 35 | Reno – Southwest | $535,000 | $294,500 | ($240,500) | -45.0% |
| 36 | Verdi | $662,500 | $365,000 | ($297,500) | -44.9% |
| 37 | Reno – South Suburban | $810,000 | $452,500 | ($357,500) | -44.1% |
| 38 | Reno – Southwest Suburban | $693,000 | $565,000 | ($128,000) | -18.5% |
| 39 | West Washoe Valley | $575,000 | $595,000 | $20,000 | 3.5% |
As can be seen in the table above, West Washoe Valley actually shows a price increase. However it should be noted that the data is quite thin for that area. For example only seven properties were sold during the Aug 2005 – Jan 2006 time frame, and only six have been sold in this area during the first half 2011.
Hopefully, the info provided above offers a little food for thought. I look forward to your comments and questions.
Have a safe and enjoyable Independence Day!
The home price 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 – July 2011. Note: This information is deemed reliable, but not guaranteed.
Cornish
70.5% down in Somersett. When I first came to this blog, about 4 years ago, I was considering Somersett. Then I read a great post by RI where he explained that there were two “monuments to the bubble” in Reno. He said one was the Montage and the other was Somersett. I never did buy there, or anywhere actually. Still happily renting and watching the carnage over the past 4 years.
Solemn thanks to RI and this blog for saving my ass.
Jeffrey Dow Jones
Great post — I always really enjoy examining the data behind the market.
To get a more accurate read on which areas are experiencing the most activity you should look at each area in relative terms rather than absolute terms. Instead of measuring the total number of sales in South Meadows, relate that to to the total number of properties in that MLS region.
Areas like South Meadows and Stead will obviously have more homes sold than zones like Old South Suburban or West Suburban where the supply of homes is substantially smaller.
Anyway, thanks for the work! I have no idea if you guys even get data on the total number of properties in each MLS zone, but if you do, send me a spreadsheet and I’ll crunch all the numbers.
Reno Ignoramus
Thanks Cornish. I remember that comment. I have to say though that never in my wildest imagination did I forsee Somersett losing 70% off the bubble high. That is absolutely astounding. Truly an epic collapse.
M
I recently relocated to Reno late last year from San Diego with my fiance, who grew up here in Reno. Now, granted, San Diego is one of most beautiful, amazing cities I have ever been to, let alone lived in. The weather is perfect, entertainment is abundant, the ocean, culture, restaurants, nightlife, etc….just incredible
But, having moved there in my mid 20’s, now being in my early 30’s, as I aged, my “life values” changed (does this happen to everyone :). Those things I previously loved about SD seemed less and less valuable and important to us. We both moved there from different cities, and had no family support there. Traffic was horrible. Cost of living was very high. State income tax. We didn’t really know what neighborhoods were good. Gas/food prices were high.. State budget was in shambles (not much better here huh?). And of course, good housing was ridiculously unaffordable. After we got engaged in the middle of last year, and after I subsequently lost my well-paying job, we both agreed it was in our best interests to leave.
Now, I feel really bad for all of those people who have suffered here in Reno in regards to housing. In our final years in SD, we saw the housing market drop and drop and drop, but nothing like here. It’s horrible….one of the worst markets in the country I’m sure. Yet, for first time home buyers like us, it honestly is a dream come true. We are able to get an unbelievable house for the same price as a 1-BR condo in SD.
And…to top it off…we actually love it here. I am accustomed to smaller town living anyways, and feel more of a sense of community here than I did in SD. We love the outdoors, and definitely love the seasons. My commute to work is less than 10 minutes. People are friendlier here. We have close family here. And to top it off, we were both able to find great jobs relatively quickly, and are finally getting hitched at the end of this year.
With all that said, after we marry, we are ready to move on with the next stage in our lives….home ownership and starting a family. We plan on entering the housing market at the end of this year.
This blog has been a GREAT resource for us to research different areas of Reno that we may want to live in. I look at it daily. I’m hoping to get a few responses on some of my concerns about the Reno housing market, having been here less than a year. Any answers are appreciated. Thanks everyone. And…no one told me they have a rib cookoff here…I freaking love ribs…so excited.
1. We REALLY like the Somersett area. What are some of the pros and cons of that area? I’ve heard everything from earthquakes and extreme wind, to high HOAs and really bad traffic? Seeing data showing that area has decreased up to 70% since the peak is both intriguing and disconcerning…what happened in that area, or what is wrong with that area, if anything?
2. Just how hard is it really to get approved for a loan these days in Reno, given all the forclosures and low employment? We have great credit scores, little to no debt, steady jobs, but could probably only afford a small downpayment, as would be required for an FHA loan (like 4-5%).
3. Is the end of this year truly a good time to buy, in anyone’s opinion? We think interest rates my increase…any input on that?
4. Does anyone have any other tips for first time homebuyers like us?
Thanks everyone….love Reno, and love this blog!
– M
Paul
Hey M – Welcome to Reno. If you like Sommersett, and can get a south-facing house (more sun in the winter) at 70% off, why not?
Since you’re not planning to buy until the end of the year, just spend time driving around the various neighborhoods, and see what you really want. In terms of mortgage credit, I suspect underwriting standards are the same everywhere, but I’m sure Guy can refer you to a competent lender.
You’ll love the airport here (I know i do, as a former Bay Area resident), its compact, efficient and has non-stop flights to SD if you want to go back and visit.
inclinejj
1. We REALLY like the Somersett area. What are some of the pros and cons of that area? I’ve heard everything from earthquakes and extreme wind, to high HOAs and really bad traffic? Seeing data showing that area has decreased up to 70% since the peak is both intriguing and disconcerning…what happened in that area, or what is wrong with that area, if anything?
**70% blows my mind also, being this is the 5th roller coaster up and down market I have seen. I never thought we would see anything as bad as the S&L crisis of the 80’s. Like I tell everyone I think the market has more downside in the next couple years, and If you plan on buying and staying in the house at last 5 years plus go for it.
2. Just how hard is it really to get approved for a loan these days in Reno, given all the forclosures and low employment? We have great credit scores, little to no debt, steady jobs, but could probably only afford a small downpayment, as would be required for an FHA loan (like 4-5%).
Go talk to a direct lender bank, mortgage banker and try to talk to 3 different people. I know none to nill about FHA but I know you can get in for very low downpayment. The A paper loan rates should not vary by about .25 of a percent cause the rate comes from the FNMA 30 day paper rate that is published in the wall street journal every day.
3. Is the end of this year truly a good time to buy, in anyone’s opinion? We think interest rates my increase…any input on that?
Well buyers normally start coming out right after school gets out for the summer and people like to be in the house before school starts. In the winter sales slow down cause people just don’t like to go out and house shop when it is snowing and or during foul weather and or the holidays. Rates should stay in a narrow .50 basis point range for the next year or so.
4. Does anyone have any other tips for first time homebuyers like us?
Yes go out without a realtor and get to know your areas. Drive around with a notepad and write down what you like and do not like. Pretty soon you will figure out the area you want to be in. Along with the monthy payment you will also have a tax payment to the county and also insurance costs plus utilities. First or all if you do not start doing a monthy budget and factor all of these items into it. Figure out a number you are ok with paying per month and stick to it. Try to get prequalified by a lender. Also try to figure you need emergency reserve money from 3 to 12 months in case of unexpected repairs and or if the worse case one of you lose a job or get hours cut.
Also when you are driving around areas stop and talk to people. You will be amazed how much people like talking about the houses and neighborhoods.
Jeffrey Dow Jones
Hey M — that’s a terrific comment. In my experience talking with others, pretty much everybody who hates real estate with a passion are those that were burned (badly) by it. Nothing surprising about that. But there are many who didn’t go through the experience of the bubble or others who understood what was going on in 2005-2006 and are today looking at the market with as much rationality as they were back then.
Hit me up at Jeffrey (at) TheDraconian (dot) com. My wife and I just bought a house up in Somersett after two years of research and shopping around in Montreux, ArrowCreek, Double Diamond / Damonte Ranch, and Somersett. The newer, non-Sparks areas, I guess.
I’m happy to share some of my objective conclusions (I’m a data-driven sort of guy) and anecdotal experiences so far. There are definitely pros & cons to living up there.
Sully
M, only thing I can tell you is check out some of the areas in Sparks before you commit to Somersett. Also Verdi.
I’m in my 5th (?) real estate bubble and this area is the worst I’ve seen (Las Vegas probably even worst). However the other bubbles were in CA and they bounced back, Reno has never had a bubble before and this one was (is?) a Grandaddy. I’ve said many times (too many) that this area was overbuilt and overpriced from the get go. Expectations of rich Californians flocking here to buy million dollar houses, with no reasonable expectations of long term jobs.
My research has shown this area (inflation adjusted) has flatlined since 1980. Any expectations of buying low and selling high should be put in proper perspective. That being said, if you can get something for 70% off peak then go for it, just don’t expect peak price again anytime soon.
Sully
I should have added – before and after the bubble regarding flatlined. It was flat before the bubble and is now back to the same relative price range after the bubble.
M
Thank you everyone for all of the great suggestions and useful information. I hope everything works out with our housing search later this year. I just wanted to get my research started now. I’ll definitely be driving around Somersett again to take notes and get a feel for the community. Sparks and Verdi are two areas we have not taken a look at as of yet…I’ll add them to my list as well.
All in all, I feel pretty confident entering the market this year….I’ll keep my fingers crossed.
bonanza
I think Somersett is one of the nicest planned communities anywhere. If you don’t want to pay the HOA fees there is a community (Canyon Pines) right above Somersett. The HOA is only $29 and yet the community looks nicely kept (no weird landscaping, house colors or hoops in the street).
bob_c
i’d stay out of the hoa at somersett…..golf course is in jeapordy….look just outside somersett’s domain
lomger term i think south suburban or verdi is the place to be
i expect long flatline…take your time….bid LOW and don’t fall in love with 1 house
inclinejj
Lots of factors involved. I agree we will see a long 3 year or so flatline.
Lots of bad loans still out there, lots of shadow inventory, unemployment still high, and 3 out of 5 homes with mortgages are underwater.
I think the 3rd phase or wave of NOD’s and Foreclosures will start this late fall.
rory
I think M should take a drive around the old southwest part of town. I think there is something very desirable about established neighborhoods. The Newlands area is gorgeous and the areas to the south and north of Mayberry drive are adjacent to some of the best elementary schools in the area.
Jackie
I just found this blog and it has some great info. I’ve also recently relocated to this area from the Sacramento area, for a job just over the state border from Reno, in Calif. For ease of commuting, I want to live in Cold Springs, and am considering buying rather than continuing to rent. However, I’m a little gun-shy because I lost over $100k cash in the last home I sold in Nov. 2010. I don’t plan on living here long- term and would like to return to the Sacramento area in 3-5 years, depending on whether I can find a decent-paying job there in my new field.
It’s probably not a great idea to buy right now, but I recently moved into a roach-infested, cat-urine sprayed rental house, and want to get out now. The landlords won’t fix it but they’ll let me out of the lease. Now I can’t seem to find any decent rentals, e.g. freshly painted, no pet odors, decent and clean carpet, for a reasonable rent ($1150 or less).
Does anyone have any ideas on whether it would be a good idea, disastrous idea, or something in between, to buy right now in Cold Springs? Although I may not stay in it the recommended 5 yrs. before returning to Sacramento, I figured it could be a rental after I move out. I’m thinking of buying in the $90-$130K range.
Thanks for any advice you can offer!