THE SELF-PROCLAIMED “BIGGEST little city in the world” may not be able to hang on to that slogan for much longer. At the very least, it may have to add “quirky” or “business-friendly” (distinctions recently earned from Modern Maturity and Forbes magazines, respectively) to the sign that spans the city's main drag.
Or, folks in Reno may just have to admit that, as activity continues to stretch to Carson City and Lake Tahoe in addition to neighboring Sparks, this little town in Northern Nevada is simply growing into a big city. And builders, specifically, must face a changing market. “We're experiencing a large influx of builders,” says Jesse Haw, a local developer and president of the Building Association of Northern Nevada in Reno. “Ten years ago, local builders made up 80 percent of the starts. Now, the larger national and regional builders do.”
In addition to the power shift, the market share among the top 10 builders is nearly 62 percent, by far the highest of the four hot markets featured in these pages, and multifamily permits are up to 28 percent of total starts after a 301 percent spike in the first quarter of 2004.
“The regeneration of the downtown and [Truckee] riverfront area has been a boost,” says Haw, as has the fifth-best job growth rate (4.4 percent) and among the best demand-supply ratio (1.22) among 75 metro areas in the country.
As for single-family expansion, developments are popping up in all directions, transforming sleepy towns like Dayton (east of Carson City to the south) into thriving communities. “There are 300-unit subdivisions with 500 people on the waiting list,” says Haw.
Despite the growth, Haw says, lot prices and regulations have yet to rear up to curb the area's activity. “For long-time [Reno] builders, it may seem like it's harder [to get approvals, etc.],” he says. But if you're coming from California, Haw adds, it's paradise, with six months or less to process a plat map, not to mention the ever-attractive lack of a state sales tax.
Haw expects the growth to continue, transforming not just the local housing industry, but also Reno's national reputation.
“People hear Reno and think gambling and quickie divorces—not very favorable,” he says. “But when big builders and other people come here and see the [Sierra Neva-da] mountains, Lake Tahoe, [and] realize they are only three hours [by car] from San Francisco, and the high quality of life—we're starting to get on the map.”
†SOURCE: NAHB/WELLS FARGO HOUSING OPPORTUNITY INDEX
Learn more about markets featured in this article: Reno, NV.