Home buyers looking for a home that’s big enough to raise a family may want to look in the West. Nine of the eleven cities that ranked well for homes that will accommodate a growing family were in Western States. Reno, Nevada, where RealWealth is building homes, ranked second on a list of best cities for family homes, according to Smart Asset.
The Smart Asset analysis used six data points to compare one hundred cities and came up with a total of 24 that home buyers might want to consider. Those data points include: home value appreciation, rent growth, homeowners that are cost-burdened, housing costs vs. income, and property tax.
At the very top of the list is Fremont, California. It is not the most affordable city on the list, but it provides good appreciation and lots of housing stock with more than two bedrooms. Housing costs, as a percent of household income, are also on the low side, because salaries are so much higher in entire San Francisco Bay Area.
Reno is also not the most affordable city in the U.S., although it’s much more affordable than most cities in California. Known as the “Biggest Little City,” and certainly living up to it, Reno has moved from a rank of 19 last year on the family home list to number two this year.
Smart Asset highlighted a few reasons for the change in ranking. It says, 80% of the homes in Reno have at least two bedrooms. That’s not the highest percentage, but it also says that out of the cities it analyzed, Reno home appreciation was the third highest from 2013 to 2017. It also has the sixth-lowest effective property tax rate of just .53%. And, only 19% of Reno residents are cost-burdened. So go Reno!
The Reno business environment is also booming. The state of Nevada, in general, is known for its business-friendly policies. It offers plenty of tax incentives for businesses, and collects “no” state income tax from workers. Plus, it’s only four hours from the San Francisco Bay Area and the South Bay’s Silicon Valley, so many California businesses feel comfortable expanding in Reno.
As just one example, Google is building a huge facility in the Tahoe Reno Industrial Center on more than 1,200 acres of land. It’s just a few miles from the Tesla factory and the Switch Citadel data center. Google hasn’t released a lot of info yet about what it plans to do with this new facility, but the Reno Gazette says that many people expect it will be a data center. It’s part of a $13 billion dollar investment that involves major expansions in 14 states. (2)
CEO Sundar Pichal says of the company’s expansion plan, “These new investments will give us the capacity to hire tens of thousands of employees, and enable the creation of more than 10,000 new construction jobs in Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina, and Virginia.”
Again, that’s just one example of the kind of development we’re seeing in the Reno area. Apple recently finished a huge warehouse in downtown Reno. Switch also recently finished what’s being called the world’s largest data center at the industrial park. Amazon has a big presence there. Tesla’s $5 billion Gigafactory, which it shares with Panasonic, is still under construction. It’s expected to have almost 5 million square feet of operational space when it’s done. And lots of employees. There are more than a dozen geothermal companies in the area, and plenty of tech start-ups.
Business is booming in the Reno area along with housing demand. There aren’t enough existing homes to meet the demand, which is one big reason we knew Reno would be a great place to build homes. We have two subdivisions underway just outside Reno in Verdi right now totalling 273 lots on 100 acres of land. When the homes are finished, they will be located within commuting distance of all those companies I mentioned a few minutes ago.
Since the housing market is thriving in Reno, home prices are also following suit. According to the Reno Gazette, median home prices have topped $400,000 six times in the last year and a half. May was a record-setting month when the median hit more than $420,000. Prices are rising because there aren’t enough for-sale homes including both existing, and newly built homes. The newspaper reports, inventory is down to less than three months.
The homes we’re building at Quest near Boomtown are selling more quickly than expected, and our investors should be earning more than the 15% preferred annual return. We plan to build more homes in the area if we can find the available land so if you’d like to invest in a future build project like this, just become a member of RealWealth. It’s free to join, and once you do, we can unlock our private investor pages. We can’t share details publicly about private placements due to SEC regulations.