Nancy Fennell, President of Dickson Realty, shares her insight on the rise of luxury home sales in the Reno area.
The luxury market in Northern Nevada is defined as homes valued at $1,000,000 or higher. It’s also important to consider that people who own this price home in the Nevada market are very likely to own another luxury home in a different market. Fennell shares who is buying and selling these properties and what some of the trends in this price range are. Dickson Realty has been actively engage in the luxury market since 1988 when they were invited to join a small group of brokers from around the country. Dickson is now a member of Luxury Portfolio.
The luxury market in Northern Nevada is representative of just under 4% of sales in the entire housing market. While not significant in volume, these sales are important to view as an enhancement of the big picture happenings in the housing market. Luxury homes between $900,000 and $1,500,000 currently have five months of inventory in the region. For homes prices at $1,500,001 and above, there is 13 months of inventory available.
The latest Dickson luxury trends report shows that the total number of million-dollar homes sold in the first quarter 2018 vs. 2017 are up a whopping 225%.
From 2017, average sales price is up 9.37% and average price per square foot is up by 6.45%. And finally, the days on market from last year is a touch higher by 43 days. In the first quarter this year, there have been 52 home sales as opposed to the 16 homes that sold last year in the first quarter.
According to Marci Rossell, Ph.D and Chief Economist for Leading Real Estate Companies of the World, some of this increase is being driven by politics rather than economics. The U.S. tax code cap deduction for state and local taxes has recently been changed to $10,000. Rossell has predicted that low-tax states will see an increase in home buyers.
Rossell also predicts that because there is global economic growth, central banks are rolling back monetary stimulus and tightening up their policies. Home buyers can expect slow and steady interest rate increases as the global economy continues to improve. There have been strong gains in stocks over the past few years and buyers are now looking to increase their real estate ownership to balance their portfolios.
Fennell took these insights of Rossell’s and wanted to compare them to live data, so she conduced an informal survey of the transactions Dickson Realty had closed in the first quarter (which equates to almost 38% of the entire luxury market). She found that of them, 24% of buyers were local, 71% from California and another 5% from other highly-taxed states. Most of the California buyers were not employees of new companies, but retirees.
The luxury market is currently nearly at a balance with five months of inventory (a perfect balance would be six months). With the current sales trends, there is a shortage in parts of this market to be expected in the future as well. Be sure to stay up to date with your Luxury Specialists for the hottest new properties on the market!
Follow Luxury Reno Homes on Facebook, Twitter, and Pinterest to stay up to date on all things real estate, as well as Montrêux events and what’s happening in the Reno-Tahoe area. For real estate inquiries, stop by the beautiful Montrêux Welcome Center at 16475 Bordeaux Dr. in Reno, NV or call us at 775.849.9444. The Welcome Center is open 7 days a week, from 9:00 am – 5:00 pm.