Home builders are “battling back” from recession and expect a solid year ahead in Northern Nevada, a key industry official told a Reno audience Wednesday.
“We’re finally seeing builders and subs (subcontractors) making a few bucks now,” Mark Krueger, principal at ArchCrest Commercial Partners, said at the annual forecast event of the Builders Association of Northern Nevada.
The region’s home-building industry withered over the recession that brought construction to a near-standstill. But over the past couple of years a rebound has begun, and Krueger said he anticipates an estimated 1,150 new-home sales this year, up from 991 in 2013 and 780 in 2012.
That’s still well below the peak of 4,500 in 2005 before the onset of recession, but Krueger said “we’re definitely on our way back up.”
Krueger said the top five builders are Lennar, Ryder Homes, Toll Brothers, Pulte Homes and KDH Builders, and he expects limited interest from new out-of-area builders until overall sales volume increases.
He singled out south Reno and the Spanish Springs Valley of Sparks as the hot areas for home construction this year, and to a lesser extent, west Reno.
“We had 103 homes unsold as of the end of 2013. That’s very healthy,” he said. “We expect 145 this year as builders try to jump out ahead of demand.”
And as prices rise and the state’s employment picture strengthens, the ongoing challenge of home foreclosures will ease, Krueger said.
Nevada ranked second to Florida in foreclosure rates nationwide, California-based foreclosure tracker RealtyTrac reported in November.
But a 39 percent drop in foreclosure-related filings from September to October was attributed in large part to a new state Homeowners’ Bill of Rights that effectively slows the process.
“We don’t see (foreclosures) as a major issue going forward,” Krueger said.
Nevada was among the hardest-hit states in plummeting home values and soaring foreclosures during the recession. But the resurgent new-home sector mirrors improvements expected this year in the region’s broader economy, too, as outlined by other speakers at Thursday’s meeting.
“Even hard-hit places like here are going up. Things are better,” said keynote speaker Elliot Eisenberg, a Washington, D.C.-based economist, noted speaker and media personality. “We’re starting to spend. It’s not all puppy dogs and kittens, but it’s better and things will continue to get better.”
The same goes for the Reno-Sparks area’s existing-home market, said Mark Ashworth, president of the Reno/Sparks Association of Realtors.
The association is expected to release its year-end sales report next week. As of November, the median sales price for an existing single-family residence in Washoe County was $224,900, up 24 percent from November 2012 and up 67 percent from the recession low $135,000 hit two years ago.
Washoe’s all-time high median price of $350,000 was reached in 2005.
“There is no blood in the water today,” Ashworth said of the market, adding that in the coming year, housing will be influenced by unemployment rates, consumer confidence and other factors that are trending positive.
“We anticipate continued recovery for real estate in 2014,” he said.
Krueger, too, cited Nevada’s state and local unemployment rates that continue to fall into the single digits, including 8.2 percent in Reno-Sparks in November, the latest figure available and the lowest in five years.
He also cited continued improving economic conditions next door in California, where the statewide November jobless rate was 8.7 percent, below Nevada’s statewide 9 percent.
“California is our bread and butter,” Krueger said of Northern Nevada’s housing and other economic indicators. “As California improves, we improve.”
Source: Reno-Gazette Journal