Rebecca Dickson
Historically, most buyers of Reno luxury homes entered the market from Northern California after they had retired or sold a business. The state's tax benefits provided a substantial draw and benefit to this group, whose entry-level price started at about $2 million.
However, the characteristics of the typical Reno luxury home buyer began to change about 30 months ago and became supercharged by the pandemic. Now, more buyers interested in Reno luxury homes come from Southern California, are in their 30s or 40s and have a budget of at least $4 million.
This shift in demographics, preferences, and geography of buyers is driving an increase in interest in Reno luxury homes. Coupled with a national trend of urban migration and changes in supply and material availability and pricing, this change is rapidly affecting the availability and nature of luxury homes for sale in Reno, Nevada.
These are some of the topics I discussed at the Luxury Broker Roundtable at the Leading Real Estate Companies of the World's Luxury Portfolio SUMMIT.Â
Leading Real Estate Companies of the World, also known as LeadingRE, is a selective global community of the highest quality independent residential real estate companies, with more than 550 companies and 150,000 sales associates in more than 70 countries. Dickson Realty is proud to be a longstanding member of this community and a trusted expert on luxury homes for sale in Reno, Nevada, and beyond.
I was honored to be asked to participate in this roundtable and represent a unique West Coast perspective alongside two other REALTORs with extensive East Coast experience. During the panel, I spoke about the markets on the West Coast and the Reno luxury homes market, specifically concerning California.Â
My contribution to this panel focused on discussing three significant trends:Â
The urban to suburban migration
Changing buyer demographics
Changing buyer geography
Below are some key takeaways, as well as advice for buyers and sellers in today's market
Trend 1: The Great California Migration
Even before the COVID-19 pandemic dramatically changed and energized suburban housing markets, more buyers from urban markets—specifically California, flocked to the Northern Nevada region. These individuals sought to live in the Reno area for our tax benefits and the fruition of economic development efforts.
While other areas of the country also experienced a shift from urban to suburban during the pandemic, they may also experience a reverse migration in the coming months as recent home buyers assess if living in a more remote area works for their lifestyle. Unless these areas continue to hold a core reason that drives why people choose to live there, individuals may return to more urban living environments, particularly people who have to be in a bigger city in an office.
However, I do not anticipate that happening here because of our region's longstanding business and workforce attraction efforts. The reasons these buyers came to Northern Nevada existed before COVID and will continue to exist after the pandemic.Â
Trend 2: Changing Buyer Demographics
With 34 years of experience in the local and global luxury market, I keep close tabs on the factors that impact buyers and sellers of Reno luxury homes. Over the past 30 months, I have seen a generational shift in the types of buyers coming to the market.
Historically, our region has seen a small demographic of people older than 60 years old coming into the market at an entry-level price of about $2 million. They were considering retirement or sold a company and wanted to be in a tax-free state. Often, they previously vacationed in Northern Nevada for decades, so the move was a relatively simple transition.
Over the past two and a half years, the demographic of Reno luxury home buyers has skewed younger. By 2030, millennials—adults born from 1981 to 1996—will hold five times as much wealth as they have today, and the group is anticipated to inherit over $68 trillion from their Baby Boomer parents. At 38%, this group represents the largest share of homebuyers in the U.S. Those millennials who already have wealth are quickly becoming a dominant force in luxury real estate, a trend that we've seen locally and globally.
Trend 3: Changing Buyer Geography
The third trend impacting the market for Reno luxury homes is a shift in where buyers are coming from. We are currently seeing more people relocate from Southern California. Pre-pandemic, of the most common 30 counties of where people lived before moving to Washoe County, 18 were in California, according to research by the University of Nevada, Reno, Center for Regional Studies. Some of the top in-migration California counties included Los Angeles, San Diego County, Sacramento, and many in the Bay Area.
These buyers are not necessarily coming here just for tax or typically urban areas. They're coming in here for commerce. Over the past decade, organizations such as the Economic Development Agency of Western Nevada (EDAWN) have attracted companies such as Walmart, Amazon, Tesla, Switch, Microsoft, and Apple to the region. It's no longer okay for those companies to have their top-level management commuting three days a week from Southern California. They now have to be in Northern Nevada.
This change location has almost doubled the entry-level price for buyers coming from California. The entry-level housing for a person coming from Northern California has on average been about $2 million. The average entry-level price for a Reno luxury home for the Southern California buyer has been $4 million. As a result, they've raised the bar in many of the values of the properties in the luxury space.
Advice for Buyers and Sellers of Reno Luxury Homes
These three trends create intense demand for Reno luxury homes, and as a result, buyers and sellers need an expert-level REALTOR representing them.
- If you're a buyer, you'll likely need what I'm calling layover housing—where you'll live before you can purchase an existing or new home. Position yourself in a place where you can live while you're looking for something. While this scenario may not be your first choice, it will give you more strength because you will not make a rushed decision.
- If you're a seller, you need a real estate agent who can help you deftly navigate this high-demand market. While it may seem easy to sell a home when everyone is interested, multiple offer scenarios require a REALTOR with deep market experience and negotiation expertise. Now, more than ever, you need a highly qualified real estate professional to help you sell your home.
Rebecca Dickson
