While more jobs are being created in Northern Nevada, that means more people are coming to fill those jobs. While the median Reno housing market has been on the rise, what does that mean for the luxury market?
Image courtesy of Dickson Realty
Only 3-4% of Reno-area home sales involve luxury homes with a price tag of $900,000 and up. That percentage is on the increase and there are predictions that the number of homes sales will double this year over 2017. Changes in the federal tax laws have already pushed up interest in the Reno market. Beginning this year, federal tax reform changes will cap interest rate deductions on mortgage debt up to $750,000 (down from $1 million) and limit local and state property, sales and income tax deductions to $10,000.
The area has seen a big influx of buyers from nearby Northern California, where housing costs are much higher. People with families are scouting the region with the intent to move after their kids get out of school. Mary Jurkonis is our fellow luxury associate at Dickson Realty and she said that she is also seeing the Reno-Sparks luxury market pick up.
“It’s booming,” she said. “The luxury market is loosening up compared to what it was a few years ago.”
According to stats compiled from the Northern Nevada Multiple Listing Service, in 2017 there were 144 homes priced over $1million sold in the market. This compares to a mere 95 homes in 2016 – a 51.58$ increase. The average sales price in the luxury market has also jumped up by 8.9%. There’s also been a dramatic change in the demographics of the buyers.
“We’re seeing younger people move into the area, with families buying luxury homes,” she said. “It’s not necessarily older retirees.”
Instead, it’s families from Silicon Valley and other Bay Area locations escaping the rising costs in California. The retirees are still coming, but they no longer dominate the market. For example, think of a couple of family in Silicon Valley with a home valued at $2 million to $3 million. This family could snag a home in Reno with the same characteristics and amenities for closer to $800,000 to $900,000. On top of that, by living in Nevada instead of California, they can save $30,000 on income taxes alone. This means that they are bringing a lot of equity with them into the state.
In many cases, these families are bringing enough equity to not only buy a house in Reno, but add a second home up at Lake Tahoe on top of that. Another trend that we are seeing is that Reno is no longer just a casino town. People can see the connection that the city has to Lake Tahoe along with the fantastic options for outdoor recreation. For those still working, traveling through Reno’s airport is incredibly convenient. Not to mention, the empty nesters living on Tahoe’s California side who are sick of the brutal winter conditions. The Nevada side of Lake Tahoe receives significantly less snow than the west side, making it much more convenient for recreational activities.
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