It’s no secret: Northern Nevada has come a long way since the great recession.
Previously surviving on the gaming and mining industries, the region has morphed into a hub for advanced manufacturing, distribution, and technology. As a result, the area is booming, as companies — many from the Bay Area — are lured by Nevada’s business-friendly tax climate and open land.
However, as the population continues to grow, the housing market has struggled to keep up with the demand across the Silver State.
With that in mind, as fast-growing Northern Nevada embarks on a new decade, the Northern Nevada Business Weekly exchanged emails with the Sierra Nevada Realtors’ Claudia Saavedra, who was appointed recently as 2020 president, to talk about the real estate industry’s outlook for 2020, the affordable housing puzzle, and if a bubble burst is on the horizon.
Q: What’s the SNR’s overall outlook for the real estate industry in 2020 and beyond?
Claudia Saavedra: The market for our area remains strong and we are expecting continued growth. Interest rates remain low and job growth remains strong. The demand for housing in Northern Nevada will continue barring any unforeseen crisis. We will continue to see our population expanding as more people move into our beautiful area.
Q: With 2020 being an election year, how does that potentially impact the housing market?
Claudia Saavedra: The impact will be minimal throughout the year as people continue their day-to-day lives. The housing market may be impacted if people feel an urgency to buy in case there is a change in policies depending on the candidate elected and/or a threat of a recession on the horizon.
Q: What’s been the good, bad and ugly when it comes to the past decade — 2019 in particular — in terms of housing prices, inventory and the overall business of real estate?
Claudia Saavedra: Wow, the past decade saw the rise of home prices as the inventory of available homes tightened. But that has been across many areas and not just our market. New home communities are finally being developed and that will help ease some of the supply.
Q: Median prices continue to rise across the region and the region’s economy is booming. Do you foresee a potential bubble burst on the horizon? If not, how are we prepared as a region to withstand an inevitable recession?
Claudia Saavedra: This is always a challenge to forecast future growth. But, in our area, I feel we have more people relocating looking for housing. I don’t have a crystal ball, but I think the market remains strong with the influx of people moving to Northern Nevada. There is always a risk of recession, but I honestly don’t see anything indicative that one is on the horizon. As a region or any region, we have to be prepared for the ‘lean’ times and some of that happens in conjunction with our local government officials.
Q: Our region’s rising median prices dominate the headlines, and concerns among residents and businesses are mounting when it comes to being priced out. How do we find a balance when it comes to understanding the region’s “housing crisis?”
Claudia Saavedra: This is a nationwide issue. A balance is challenging to achieve. Perhaps looking at alternative housing, such as developing small home communities and, of course, the opportunity zones that were allocated under the tax bill, offering incentives to investors, so hopefully we will see a culmination of public and private working together to address this very big issue. It must be a broad-based collaborative solution with realtors being at the forefront.
Real estate is all about location, so to find the ‘affordable’ may include traveling some distance from where you want to be to afford the home you want.
Q: Homebuyers 37 years and younger were the largest share of the market in the National Association of REALTORS’ 2018 Home Buyer and Seller General Trends Report. However, real estate experts predict that rising mortgage rates could distance millennials from home ownership. Is that happening in this market?
Claudia Saavedra: No, our interest rates have remained low and several leading products are available to first-time buyers, which helps them get into their first home. Sierra Nevada Realtors and the (Reno Tahoe) Young Professionals Network are going to begin hosting information panels throughout our four-county region to help address buyers and sellers questions. We hope to have our first session soon.