Reno Fine Homes Blog

The slow real estate market is taking its toll on the once almost immune Luxury Home Market segment.  Previously luxury home sales remained substantially constant despite downturns in the non-luxury market.  This was due to several factors:

·         Blimps in the economy have had less impact on the wealthy

·         Real estate has proven to be a good long term investment and a good place to diversify one’s portfolio

·         Lifestyle remains an important consideration for this market segment

However, the present impact on the economy has now crept up to this price segment.  As shown on the following chart, the number of million dollar plus home sold in Washoe County decreased 57% from Q1, 2007 to Q1, 2008.

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We are fortunate to live in scenic Northern Nevada which offers fabulous city, mountain, lake and golf course views.  I’m often asked how much as these views worth when buying or selling real estate. To take a stab at this question, I analyzed 2007 MLS sales data (through 12/27/2007) for 3 of the most popular golf course communities: Somersett, ArrowCreek, and Montreux.  The results vary by community, but overall golf course locations are still valued by buyers.

Somersett showed the biggest delta in average home price at a whopping 30%. However, much of this can be attributed to custom vs. semi-custom homes.  The lot premium for price per square foot was 9% for homes with golf course frontage.

 

ArrowCreek had the largest premium for price per square foot with a 12% delta.  I was really struck by the overall average sales price of $1,029,684. Of the 99 homes currently listed for sale in ArrowCreek, 44 are priced at $1 million or less.  The market for the semi-custom homes continues to be very slow in ArrowCreek.

 

Golf course premiums had little effect in Montreux.  There was a 3% increase in sales price for golf course homes, but a negative 2% price per square foot.  However, since 65% of the homes had golf course frontage, the impact was minimal.

 

So, what does this all mean?  If you’re planning to buy a golf course home, you should try to keep the price under the golf course premium. Since it’s a buyer’s market, you should be able to find a home with where the seller is willing to negotiate.  If you’re planning to sell a golf course home, you can factor the premium into your asking price; however, given the high levels of inventory, don’t expect to find buyers willing to pay it now.

Other views?  Over the next month I plan to do a similar analysis for city and mountain views.  If you need the information sooner, please let me know, and I’ll prepare a specific analysis for your neighborhood.

Data courtesy of NNRMLS

 

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Year to date the prices in the Reno Luxury Real Estate Market have remained stable, and have shown a modest increase during 2007.  However, because of mounting inventory, and few sales, this situation should change within the next 12 to 18 months.

MARKET OVERVIEWThe current market conditions for the $1 million plus market in the Reno area are extremely challenging. The number of million plus homes for sale in the Reno area has more than tripled in the past year and a half. On Feb. 1, 2006 there were 96 million dollar plus homes for sale; today there are 298!

Only 22 homes have sold for million plus since Sept. 1, 2007. The following graph shows number of listings by price band for each time period as well as the homes sold by price band.

The combination of increased listings and a low level of sales has casued the months on hand inventory to climb to 2 – 6 years worth of inventory!  The following chart shows the absorption rate (i.e. the number of homes sold per month by price band) and the corresponding months of on hand inventory.

 As shown on the above chart, there are over 48 months of inventory (4 years!) in the $1M - $1.25M price band, and over 71 months of inventory ( almost 6 years!) in the $1.75M - $2M price band. This means that at the current absorption rate per month of homes sold it will take this long to burn off the current inventory. This is without adding new inventory to the mix (which is unlikely).Because of this mounting inventory the basic laws of Supply and Demand suggest that there is going to be major pressure on prices on those few homes that actually sell in the next 12 – 18 months.  Data is courtesy of my Broker at RE/MAX Realty Affiliates and NNRMLS.

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Posted by Maureen Loeb, REALTOR with RE/MAX Realty Affilates

You don’t have to move to California to own a fabulous estate.  Reno currently has 14 homes priced >$3 million dollars offered for sale on MLS.  5 are located in Caughlin Ranch neighborhoods, 4 are located in Montreux, 2 are located in Holcomb Ranch, and 1 each in Fieldcreek, Pleasant Valley, and SW Suburban.  Here’s a summary of the homes. (Data provided by NNRMLS.)

Technorati Tags: ArrowCreek real estate, Caughlin Ranch, Cauglin Ranch real estate, Montreux real estate, most expensive real estate, reno real estate, reno realty blog, Sadlehorn real estate

Posted by Maureen Loeb, REALTOR® with RE/MAX Central Realty

Of the 116 Million Dollar Plus homes sold in Washoe County thus far this year, 24, or 20.6% were sold at Montreux.  ArrowCreek and Old south Suburban tie for second place with 13 million dollar plus homes sold in both neighborhoods.  The following chart shows the number sold by neighborhood year to date for 2007.

Incline Villages leads the pack wit the highest price per square foot for million dollar plus homes sold at an average of $654.56/SF.  Montreux I sin second place with an average of $414.55/SF.  Lakeridge Shores was third with an average of $380.36/SF. The following chart shows the average price per square foot by neighborhood.

Check back for neighborhood spotlights coming soon!

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