Foreclosure Property Listings Push up Reno Affordability

Foreclosure property listings continue to push up home affordability in Reno and in other parts of Washoe County, Nevada, according to a California-based property research firm.

In the first 6 months of 2009, short sales, bank repossessed homes and other types of distressed properties accounted for three-fifths of all residential properties sold in Washoe County, based on data from the University of Nevada-Reno Center for Regional Studies.

Based on the Housing Opportunity Index prepared by Wells Fargo and the National Association of Home Builders, median-income residents in the Reno-Sparks metro area can afford the price of 78.3 percent of houses in the area. Out of the 226 metro areas tracked by the index, the Reno-Sparks metro area ranked 105th in home affordability across the country and ranked 16th in the region.

Brian Bonnenfant, project director at the Center for Regional Studies, said that home affordability in Reno is now better than in other affordable areas in the region such as Tucson, Salt Lake City, Sacramento, Boise and areas in the California valleys. He added that California residents planning to sell their homes can now use even just a part of their sales proceeds to buy a house in Reno, where there a lot of homes in foreclosure property listings.

Real estate businesswoman Julie Reynolds also said that home affordability in Northern Nevada has sparked interest among investors. Reno-based online real estate sellers said that the Reno metro area was fourth among 145 metro areas in online search activity in July, marking an almost 125 percent rise in search activity in July last year.

In July, 59 percent of 4,060 residential properties included in active listings in Washoe County were foreclosures. Only the areas of the New Southeast, Washoe Valley and Incline Valley had less than half of properties for sale in distressed listings.

According to Bonnenfant, a record 351 foreclosed homes were repossessed by banks in July as federal foreclosure programs failed to work out viable modifications for many homeowners.

Based on data from the Center for Regional Studies, the median price for new homes dropped to $242,000 in July, a decrease of 43 percent from the $423,311 peak price in February 2006. The median price for previously-owned homes fell to $182,950 in the April to June quarter, a 48 percent drop from the $350,000 peak price in 2005.

According to the researchers, previously-owned houses and homes in foreclosure property listings in Reno are undervalued by more than 18 percent.

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