Around the country, regional real estate markets have one thing in common: demand is much higher than supply, and new housing starts don’t look promising. However, one city in particular is bucking that national trend. This summer, Reno, Nevada is experiencing a new home construction boom that’s benefiting both homebuyers and builders alike.
So what is Reno doing right?
According to the Reno Gazette-Journal, areas that used to be designated exclusively as single-family housing will now be home to multi-family and mixed-use developments. As a result, a number of upscale buildings, restaurants, and housing complexes are under construction.
“We opened the gates for all this construction,” said Garry Hill-Thomas of Pink Hill Properties. Hill-Thomas and partner Kevinn Pinkney are proud Nevada residents who have worked with the city of Reno for years to change the zoning regulations. As students at the University of Nevada, Reno, Pinkney and Hill-Thomas played on the UNR basketball team and went all the way to the NCAA Sweet 16 in the 2003-2004 season. After careers playing professional basketball, their company Pink Hill Properties is developing new student and multi-family housing for the city.
Now, thanks to their efforts and those of Nevada lawmakers, builders, and homebuyers, the city of Reno is experiencing a family boom in the housing market.
Nevada cities like Las Vegas and Nevada were hit particularly hard by the housing crisis, but the recent construction boom in Reno proves that the state is finally recovering. In fact, the state has a boom-bust cycle that dates back more than 150 years.
“Nevada has always seemed to find a way to either ‘Boom’ or ‘Bust,'” said Nevada construction and real estate attorney Tony M. May, Esq. “The first ‘boom’ started with the Comstock Lode back in 1859, when miners hearing of the rich find began to flood northern Nevada in hopes of finding their fortune. When the United States decided to limit the role of silver in its coins around 1870, the price of silver dropped and the flourishing cities around Virginia City turned into ghost towns.”
May added, “The boom and bust economy in Nevada has continued to show itself over the years with new mines being discovered throughout the state and the legalization of gambling, with the last bust occurring just a few years ago.”
Nationally, it’s a different story entirely. In a recent Marketplace report, National Association of Realtors chief economist Lawrence Yun lamented sharp drops in housing starts so far in 2017; new home construction dropped in March, April, and May.
“Ten years ago, the problem in the housing market was lack of buyers,” Yun said. “Today, the problem is lack of sellers. Inventory levels are near historic lows. Consequently, prices are running up too high. Over the past five years, prices have increased by 40 percent, while people’s incomes have only grown by 10 percent. That’s unsustainable, choking off affordability.”
Unfortunately, Reno’s construction boom may be the exception, not the rule.
