What does the future hold for Reno as younger people move in, housing costs increase and Renoites move out?
Retirees moving to Nevada for its low taxes, combined with 20-somethings who are finding high-paying jobs continue to keep housing costs on the rise in Reno.
In February, jobs in Washoe and Storey counties grew higher than pre-pandemic levels, but not in hospitality, said Eugenia Larmore with Ekay Economics.
Multiple factors have attracted large companies to the area, but many hotel, gaming and service jobs have yet to be refilled.
The jobs are there, Larmore said, “that’s a cause for celebration,” but the people aren’t yet.
“On the business side, we have a significant labor shortage. And so from business operations, as we talked before, restaurants may not be able to afford wages, they may not be able to find employment,” she said.
In the meantime, the median price of a home in Reno is about $600,000; about $150,000 higher than Las Vegas.
"It would be very hard to be a single-income earner" and own a home at the median price in Reno currently, said Larmore. “We were seeing a lot of investment purchasing, a lot of cash by people moving here from outside of the area.”
Brian Bonnenfant is project manager for UNR’s Center for Regional Studies. "We've been tracking migration patterns for 15-plus years … Clark County is the No. 1 source of people moving to Washoe," he said.
He said that’s followed by various areas in Asia, then Los Angeles County, and finally the Bay Area. Overall, he said, California accounts for a third of total migration into Washoe County.
What’s driving that? “Reno has always been a really good secret for that younger generation,” he said, noting access to Lake Tahoe, skiing, open desert, education, bars and restaurants.
More notably, many of the newer jobs in the area aren’t requiring multiple degrees to make $30 to $39 per hour.
“The secret’s out,” he said.
Much of the business in the area followed the Tesla announcement, both Larmore and Bonnenfant said. “Some call it the ‘Tesla effect,’” said Larmore.
Bonnenfant agreed, “You bring in the Tesla announcement, Reno lands on the map across the nation.”
But, he said he’s finally seeing declines in Reno's home sales.
"We would have to survey these builders" to see if it's labor or product shortage, or if the prices are slowing it down. "It's all about the inventory,” he said.
Despite the sales slow-down, home sales are still higher than they’ve been, and there are multiple reasons younger people and retirees specifically are searching for homeownership.
"Exuberance buying" is buying "for the sheer thinking, psychologically, that, 'I got to get into this market,'" he said.
Bonnenfant calls it the FOMO [fear of missing out] of the housing market.
Reno and Las Vegas are experiencing that "drastically,” he said.
Though despite the current housing climate, the future, economically, looks good to Bonnenfant.
“In addition to the logistics growing leaps and bounds, all of that is very global,” he said. “You know, [electric vehicle] car sales is still in its infancy. So our industries have decades of growth ahead.”
Eugenia Larmore, president, EKAY Economic Consultants; Brian Bonnenfant, project manager, Center for Regional Studies at UNR