Just Right

A few short years ago (2006), the Reno area was considered one of the most over-valued in the nation. In 2004, homes were considered fairly valued but by March 2005 homes were over valued by 29.4%. In 2006, this figure jumped to 40.6%.  Price corrections began in 2007 when the 40% figure dropped to 25.3%.

 

Today, a new report by Global Insight/National City House Value Report has ranked the Reno area as being fairly valued. Actually, the report says that Reno is under-valued by 0.2%. This means our median home price of $251,500 is JUST RIGHT.

 

The report studied 330 metro areas, evaluating population density, income levels and interest rates as well as historically observed market discounts. Comparing these factors to the actual selling price of homes determines the over-valued/under-valued rating. Only 8 metro areas are still rated as over-valued in comparison to 53 areas in 2006.

 

Prices have declined in Reno because of an over inflated market, as well as the spike in foreclosures and short sales.

 

Everyone loves when home values are on the rise, even buyers. Homeowners/Seller’s love the wind-fall equity; buyers feel they are investing wisely and will see a quick return on their dollar. But prices can only go so high before buyers are priced out of the market.

 

When buyers can no longer buy, prices will decline until the market corrects itself. At the same time Reno began to experience a correcting market, the poor lending practices that were quite popular during the inflation years came to “roost” causing a wave of foreclosures and short sales, which in turn caused the market to decline quite rapidly.

 

Currently foreclosure properties account for only 40% of the homes for sale in Reno; but 75% of the homes sold and in escrow are foreclosure properties. Due to this fact and the current standing inventory, we may still see some decline in values.

 

Considering that the Reno area is no longer over-valued and that interest rates have risen slightly (they are expected to continue to do so), waiting for further price reductions may not be the best answer.

 

Now that you have heard the good news: Property prices are just right. And you have heard the bad news: prices may still decline slightly and interest rates are going up. Consider this, Reno was considered a “best place to live when the market was over-valued and continues to be on several “Best Places” to live lists today. Now with home prices “just right”, Reno has just become better than ever.

List	Ranking	Compared to	Report by:
Top 100 Best Places to Raise a Family	#31	257 cities	Best Life
Best Places For Relocating Families	#39	50 Best small-sized cities	Worldwide ERC And Primary Relocation
Best Place to Live and Launch a Business	#54	100 Best	Fortune
Best Place for Business and Careers	#137	200 Metro Areas	Forbes
Best Walking Cities	#1 in Nevada #69	500 Best	Prevention Magazine American Podiatric Medical Association
Best Places to Live in the West	Rank in top 20	20 Best	American Cowboy Magazine