Boom amidst the bust

While housing prices stagnate along the Sierra front, demand remains strong in east central Nevada where Ely, Winnemucca and Elko each reflect distinct market forces.

Emigrants from California and Las Vegas drive some markets; the booming mining business drives others.

Ely, a four-hour drive from Clark County, is fast becoming a retreat for Las Vegas residents, and its housing prices reflect the economy of the state's largest city.

A riffle of emigration from Las Vegas can look like a tsunami when it hits Ely, with a population of just 6,000. White Pine County as a whole counts only 9,000 residents in its 8,905 square miles.

"It's mostly retirement; people buying second homes to get out of Las Vegas during the summer," says White Pine County Assessor Bob Bishop. "We had homes that two years ago sold for $60,000, now selling for $130,000 to $160,000."

The assessor guesses the rate of appreciation might slow during the next couple of years.

Retirees are also buying up vacant land in the mountains that once was used for nothing more than grazing.

Last year, says Dave Tilford, president of Ely's Desert Mountain Realty, about 44 percent of all residential property his company sold was to people fleeing metro areas.

"Ely is just a three- to four-hour drive from Las Vegas," he notes. "When it's 105 degrees there, it's 85 here."

Retirees also like Ely's amenities: A hospital, a campus of Great Basin College and direct flights to Las Vegas. And, while not cheap, property has not yet gone through the roof. A 3,000-square-foot new home sells for $300,000, says Tilford.

The majority of those Clark County buyers, he adds, have lived in Nevada for 20 years or more. They say, "My granddad used to bring me fishing here. If we wait, there might not be any land left for me."

But prices have softened a bit, he says, because Las Vegas homeowners can't finance a house in Ely by simply tapping the equity in their primary residence. And higher gas prices put a pinch on pleasure driving.

Higher housing prices are a mixed blessing, says Karen Rajala, coordinator of the White Pine Diversification Council.

"We're getting reports from employees of all sizes, saying it's hard to find and keep help. Business owners' desire is for quality of life, but their employees can't find housing. Labor force and housing affordability go hand in hand," Rajala says.

Higher construction costs, meanwhile, create worries among residential developers.

They worry, too, that Ely is also at the mercy of the cyclical mining economy, which is up yet again after Quadra Mining reopened the giant Robinson Mine.

But developers remember previous busts after previous owners closed the mine in 1970 and 1998.

Mining is driving the economy in Battle Mountain, too, says Gene Etcheverry, executive director of Lander County. Newmont Corporation's Phoenix mine is coming online. And to the northeast, Newmont is building a 200-megawatt power plant. That means 900 construction workers to house until next spring.

"All the rentals and motels are full," he says. And despite the mining demand, "Prices here increased more slowly than along the Sierra front."

In Winnemucca, says Humboldt County Assessor Jeff Johnson, the housing market has been exceptionally strong.

"A lot of retirees are moving here from California and Oregon. The Californians sold homes for a great deal of money and come to spend it here. There's not much stock left in the $135,000 to $165,000 range. Most is now $200,000 plus."

Real estate agents say they see a slowdown, but Johnson hasn't seen it. In fact, he adds, the tide of immigrants is driving a lot of new construction in Winnemucca.

In Elko, residents rather than immigrants are driving sales. "We're not a border town, so it's not Californians driving growth," says Elaine Barkdull, executive director of the Elko County Economic Diversification Authority. "Home prices are a lot higher than they were two years ago. We have buyers here renting because they can't find homes."

The housing shortage at Elko, says Jim Winer, broker-owner at Coldwell Banker Q-Team Realty, is due to a lack of product. "When gold prices went up a few years back and the mines started expanding, we couldn't get the builders and subcontractors back from hot markets in Las Vegas and Reno," he says. "There was no one to build houses."

Barkdull notes that incomes in Elko can support home purchases. Miners at Barrick Gold, Newmont Mining and Anglo Gold earn $68,000 a year average, and $90,000 is not uncommon.

"And every mining job builds four service jobs," she adds.

Where will all those workers live? Developers from Reno and Las Vegas are building four planned communities of about 180 homes each to the south, where Elko sprawls toward Spring Creek.

"The population of that valley is almost that of Elko," says Burkdull. Elko counts 19,000 residents and Elko Township 40,000.

Californians were buying about 15 percent of those homes, says Winer, mostly in the upper-priced markets of Spring Creek and Lamoille, which enjoy views of the Ruby Mountains. But another 5 to 10 percent were refugees from growth in Reno, Carson City and Las Vegas. "But all that's slowed down with the fall of the housing market in those cities; people can't sell in order to move," he says.

"We've gone from a red hot market to a hot market," he adds. "Now we're on more of a flat trend. Prices went up 15 to 20 percent over the past two years, but have slowed this past quarter." Homes in the area are priced in the low to mid $200,000s.

Says Barkdull, "We're what Reno was 20 years ago."