Inventory is at its lowest in years, builders are taking advantage of it, especially in the lower end
homes. 28% of home buyers are cash deals, pointing to the high amount of investors buying. So the builders look at that and see its time for them to dust off their tool belts and oil their nail
guns. If we have learned anything in the Reno housing market downturn, it's that home builders are surprisingly adept at dealing with market downturns -- not perfect but they know when to go with the flow of buyer's increasing or decreasing demand.
Although there is nowhere near the amount of houses being built as there was in 2005 with
4,000 new homes sold and 5,000 permits issued, there has been a 65 percent increase in new
homes sales to 785 in 2012 from 477 in 2011. And an increase of housing permits raising
from 520 to 798.
Mark Krueger, principal of ArchCrest Commercial Partners said, "The growth is expected to continue into 2013 with an estimated 925 new homes sales and 950 permits.
While Reno home building will increase, commercial builds will stay at a halt where it was for 2012, as commercial real estate market is still fairly low.
Vacancy rates for commercial buildings is at 12.3% industrial, and 17.7% in retail.
A bit of good news for the Reno commercial market: Scott Shanks the senior vice president of office properties for NAI Alliance said that some California businesses are looking into coming here to Nevada due to prop 30 which raises income taxes, and sales taxes.
I believe this will just pour much needed resources into the Reno economy, if new buyers get approved (and there are lots) they will have new homes in which they can actually buy; Reno builders will create more inventory and maybe release a little pressure on existing home sales, and more importantly, get those laid off contractors back on the job.
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