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Home Prices Through The Roof Again--Time To Worry?

The story that helped build Nevada was that you came here, worked hard and could soon buy a home.

That story is being edited. Home prices are through the roof, especially in Reno.

It’s pretty well-known that apartment rents are rising in Nevada’s two urban hubs, Las Vegas and Reno. But home prices?

In Reno, the Reno-Gazette Journal recently reported that a home that cost you $135,000 in 2012 will cost you more than $320,000 today. For first time homeowners and millennials at the lower end of the pay scale, that kind of mortgage payment is almost impossible to make.

However, Mike Kazmierski with the Economic Development Authority of Western Nevada told KNPR's State of Nevada that while those prices seem high it is important to keep them in perspective. 

"That same house that you're talking about for $320,000 - three bedroom, two car garage with a nice sized lot - that would be a million dollars in the Bay Area," he said.

He also believes that while prices have gone up dramatically they will now flatten out and stay in the $350,000 range for a while.

While the housing market jumps, the job market in Northern Nevada is also growing fast. But the worry is, while Reno’s economy grows, workers will stay away because they can’t afford to live there.

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"If we cannot attract talent to this region, our tremendous success will be stifled," Kazmierski said. 

But he believes salaries are catching up with the cost of living and there are more rental spaces coming online in the next few years that will be affordable. 

Nancy Fennell is a realtor in Reno and she says a lack of affordable housing is a problem around the country. She told KNPR's State of Nevada that if a house is priced under $200,000 in Reno, the seller will get multiple offers quickly. To buy a home, she said buyers have to be smart about their offer and be pre-qualified for a loan by a bank but to get people to that point they're often rejected several times.

"People who are in the marketplace, looking, they are pretty educated about what's going on. They've looked at a lot of properties. They haven't been in first place but it's quick," she said.

Fennell said homebuilders are building homes in the affordable range, but the price of land and constructional materials are going up. Add to that, the credit market for home construction remains tight and homebuilders are struggling to build fast enough. 

"They're going to build maybe in different ways," she said, "Maybe they're looking at not stick building which has been our single-family house market here."

A state senator, Patricia Farley, I-Las Vegas, has some ideas about fixing the affordable housing problem.

"I think it starts when we begin to meet with these companies, especially the big ones the Teslas.." she said.

She believes before the state gives out tax incentives to companies that they bee required to work with the city and regional planners to see if there are enough homes, schools, roads and other infrastructure for the influx of workers they'll bring. 

Brian Bonnenfant is from the Center for Regional Studies at UNR. He said a report about what would happen with the economic improvements and more companies setting up shop in the Reno area was created and given to the local governments.  

"The local governments are hamstrung by the tax structure," he said, "So, we have to wait for those revenues to come in."

He said fixing the property tax structure will help communities be ready for an influx of workers as the economy continues to recover. 

Guests

Mike Kazmierski, Economic Development Authority of Western Nevada; State Sen. Patricia Farley, I-Las Vegas; Brian Bonnenfant, Center for Regional Studies at UNR; Nancy Fennell, Dickson Realty (Reno)

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