Bay Area homeowners finding luxury bargains in Reno market
RENO, Nev. — Only 3 to 4 percent of Reno-area home sales involve luxury homes, but that percentage is on the increase, says Mike Herman, chief operations officer for Oliver Luxury Real Estate.
The real estate firm, which has five offices around the Tahoe-Truckee region, opened an office in Reno late last year.
“I think we’ll see the number of home sales over a million double from 2017 to 2018,” Herman told the NNBW in a phone interview this week.
Changes in the federal tax laws have already pushed up interest in the Reno market, Herman said.
Beginning this year, federal tax reform changes will cap interest rate deductions on mortgage debt up to $750,000 (down from $1 million) and limit local and state property, sales and income tax deductions to $10,000.
“We’re seeing a pretty big influx of buyers from Northern California (where housing costs are much higher),” he said. “People with families are starting to look now with the intent to move here when the kids are out of school. They’re already scouting.”
Mary Jurkonis, a luxury home specialist with Dickson Reality, said she also is seeing the Reno-Sparks luxury market pick up.
“It’s booming,” she said. “The luxury market is loosening up compared to what it was a few years ago.”
In 2017, according to statistics compiled from the Northern Nevada Multiple Listing Service, 144 homes priced over $1 million sold in the Reno-Sparks market, compared to 95 in 2016 — a 51.58 percent increase. The average sale price in the luxury market has also increased by 8.9 percent.
Jurkonis noted a dramatic change in the demographics of those buying luxury homes in the area.
“We’re seeing younger people move into the area, with families buying luxury homes,” she said.
“It’s not necessarily older retirees,” she added, but rather families from Silicon Valley and other locations escaping the high costs in California. Retirees are still coming, but they no longer dominate the market.
Herman gave the example of a couple or family in Silicon Valley with a home valued at $2 million to $3 million. The family could buy a home with the same amenities in Reno for $800,000 to $900,000. If they can do consultant work, they can live anywhere. By living in Nevada instead of California, they can immediately save $30,000 in taxes.
“They can bring over a lot of equity,” he said.
In many cases, Bay Area families have enough equity to buy a house in Reno plus a second home at the Lake Tahoe, he said.
Another trend is the recognition, especially from Millennials, that Reno isn’t just a casino city.
“They’re beginning to see the connection (Reno has) with Lake Tahoe,” Herman said. “They now associate Reno with an outdoor lifestyle.”
There also has been a surge of empty nesters from the California side of Lake Tahoe who have had their fill of snow during last winter’s record accumulations, Herman said.
The Nevada side of Lake Tahoe receives less snow than the west side, so, by moving to the east side, people can still live at the lake, pay less in taxes, and deal with less snow. Or, they can move to the Reno area for even less snow.
In Reno, a $800,000 to $900,000 home is in the luxury market, Herman said. And those houses come with all the benefits of the northwestern Nevada lifestyle.
Christal Park Keegan’s professional experience includes working as an attorney for the National Judicial College in Reno and for the Chapman Law Firm in Northern Nevada.