Residential realty market expected to stay hot in '05

In residential real estate, the first half of 2004 has been called a banner year, a feeding frenzy - and most definitely a good time to be a seller.

"The market was extremely active," says Reed Simmons, Dickson Realty partner,"with high appreciation."

The median price of single-family homes in the Washoe County, for example, rose from $230,475 to $295,650 through the end of the third quarter.

And residential appreciation jumped about 28 percent in Washoe County, according to the National Association of Realtors-- figures that have all been hashed over, rehashed, and discussed many times in every corner of northern Nevada, from kitchen tables to corporate boardrooms.

Simply put, the area had a shortage of inventory an imbalance of buyers to sellers in the residential resale market, says Simmons.

At the same time, new houses were under construction at ever-amazing levels.

Reno/Sparks and Washoe County issued 4,900 single-family building permits, said Ted Stoever II, Colliers International associate, at the company's Reno/Sparks Commercial Real Estate Forecast a few days ago.

Add to that some 1,800 building permits in Fernley and Lyon County and another 620 in Carson and Douglas County.

And yet,with all of this activity, almost every new residential development had a waiting list of eager buyers.

The active market did not go unnoticed outside of Reno.

Stoever reports that large national and public builders, such as KB Homes, DR Horton, and Richmond America have entered the northern Nevada market.

And the big, master-planned communities - Somersett, Damonte Ranch, Kiley Ranch North - all moved forward through building and permit stages,with more on the books for next year.

According to Simmons, the market started to move toward balance at the end of 2004, but it's still a strong seller's market.And the market, he forecasts, will continue strong through 2005.

"This market is driven by out-of-state buyers, so I do not see much change for the next year," adds Mike Soon, owner/broker of Re/Max Realty Professionals.

The California market might be slowing, but the California homeowner equities are so deep that a transfer into Nevada is still a highly profitable venture.

"I'll go out on a limb," adds Soon."The number of (residential real estate resale) transactions in 2005 will be close to last year; the dollar property values will continue to go up in the lower price range; but in the $600,000 to $1 million range, may be more sluggish."

The high end still looks booming at Lake Tahoe.

Susan Lowe, vice president and corporate broker at Chase International,with Tahoe offices specializing in lake property, identifies another push into the high-end market that is helping it stay healthy.

People are continuing to diverse their portfolios into real estate, she says.

Lake Tahoe, primarily a second-home market, had a record-breaking year, she says,with the number of units sold lakewide up by 14 percent and the dollar volume up 38 percent.

She's also looking to second-home baby boomers as a continuing source of buyers.

Stoever expects that, barring tragic events of a Sept.

11 magnitude, the real estate bubble is not going to burst.He sees the strong inmigration of California buyers sustaining the new building planned for 2005.

And new building is forecast to be higher than this year, up to 5,400 single family permits in the Reno/Sparks and Washoe County areas, according to Colliers International forecasts, and up to 2,000 in Fernley and Lyon County,with over 700 expected in Carson and Douglas Counties.