Why Reno Real Estate Could Only Get Better

I've always avoided writing posts that tried to predict the future.  I don't plan to start now. But I want to share why I think the Reno real estate market will continue to go to positive heights in the near future (2-3 years, minimum). I have based this opinion on current market facts and trends that I have been seeing this year.

Emerging Markets....

As New York Times Reported: "Old Economies Rise as Growing Markets Begin to Falter"

"The balance of world economic growth is tipping in another direction. Just as economists have begun lowering their forecasts for China and many other developing economies, the American economy is bouncing back."



Surprising Reversal for Emerging Markets:

"FOR more than a decade, investors loved emerging markets. Now many seem to fear them.

There have been sharp falls this month in several markets, from India to Turkey, reflecting concerns about weakening currencies. But even before those declines, emerging markets were underperforming relative to developed markets to an extent not seen since the Asian currency crisis of the late 1990s. "

As countries like Brazil, China, India, Indonesia and Turkey are experiencing capital outflows -- investors around the world are pulling their money -- to bring money back to the U.S. (I co-wrote an article last December warning the country I was born on this pending crisis)  Big time investors with budgets, literally, billions set aside for real estate, are only increasing.

This is not a new development as bank behemoths like Blackstone group have already bought 30,000 homes in the last few years in big cities like California. 

"The world's largest private-equity firm said last month that it was entering the later stages of its buying spree after leading a group of institutional investors who've spent at least $17 billion on more than 100,000 homes over two years, helping fuel the fastest price gains since 2006."

I believe this is the primary reason why the U.S. real estate market has recovered rapidly -- faster than I anticipated. Why? Because of these deep-pocketed investors don't buy just 10 homes, but whole swaths of communities and subdivisions. 

The banks have also found a way to navigate their distressed properties -- short sales and foreclosures -- to get top price for their suddenly attractive-again real estate assets.

This is an interesting development. But how does this affect our little Reno housing market?

As I have written before, real estate history tells us that the apple does not fall far from the tree -- the general U.S Market, lead by the big cities like San Francisco, Miami and L.A. will affect surrounding areas.  For better or worst.  This has been well documented in the last 10 years. When San Francisco & Los Angeles real estate are doing great, Reno is usually right behind.

Home Prices in U.S. Cities Increase by Most in Seven Years

"Home prices in 20 U.S. cities rose in the 12 months through July by the most in more than seven years, helping boost owner equity."