Declining year-over-year average home sale prices in Elko County aren't so much an indication of diminishing home values as they are an indication of residents purchasing less expensive homes, say Elko County residential brokers.
Average sale prices for homes in the City of Elko dipped 12 percent in the first quarter compared to the first quarter of 2009, shedding nearly $30,000. Average selling prices in Spring Creek dipped almost 5 percent, and the entire county was down 4.6 percent.
Jesse James, owner of Trinity Realty in Elko, says more buyers are avoiding homes in higher price ranges, which led to the average sale price decline in the city.
"A lot of people bought those houses in 2006, and if they bought them in '06 they are taking a loss," James says. "We still are not as bad as the rest of state; we are still going strong and still consistently selling houses. People are just choosing to buy more middle-of-the-road houses."
Tracie Parker, owner High Desert Realty, agrees that there hasn't been much movement in higher-priced homes in and around Elko.
"People are still being cautious," Parker says. 'It's been a little slower on the higher-end. People are still concerned about the economy and tend to be a little more conservative."
Layne Aufdenkamp, broker and co-owner of Elko Realty with Darlene Simon, says the average home price in Elko was skewed by a large number of first-time homebuyers taking advantage of a substantial tax credit to purchase entry-level homes.
Additionally, Aufdenkamp says, FHA loans were almost entirely the only avenue of financing for homebuyers in Elko County, and the FHA limit in the area is $325,000.
"It is much more common now to need a low down payment loan, and the only one in the market now is FHA," Aufdenkamp says. "Higher-end homes are very difficult to get financed. It only takes couple of $800,000 homes in our market to move the numbers."
Tammy Bawcom, owner of Bawcom Realty in Spring Creek, says her biggest market is for homes priced under $225,000 because more buyers qualify for purchases in this price range. High-priced homes in the Spring Creek area are staying on the market longer, Bawcom says, because few buyers can meet stringent credit and financial requirements for costlier purchases.
Countywide, there were 84 houses sold in both the first quarter of 2010 and 2009. Forty homes were sold in Elko in the first three months of this year, four more than the first quarter of '09.
Lower costs for new construction also are driving down average prices in Elko County, Parker says. New homes used to sell for about $130 a square foot, Parker says, and new home prices now are averaging about $115 a square foot.
Repossessions, though not as prevalent as other parts of the state, also have eroded home prices in Elko since most bank-owned and short sale properties are being purchased for less than owner-sold homes.
Aufdenkamp says repossessions and bank-owned properties are still relatively small part of the Elko County market, but short sales are becoming more common. But conventional buyer-to-seller transactions still dominate the market.
"And for that we are appropriately thankful," she says.
The residential market in Elko County still is going strong, Parker says, but home prices were slightly overvalued, and like other parts of the state Elko is experiencing a correction.
"We were in this little bubble, and it just kept growing," Parker says. "This process was needed to keep price coming down a young couple four years ago couldn't even afford to buy a home."
Parker expects home sales in Elko County to remain brisk as the weather warms and interest rates remain relatively low and prices shouldn't soften much further, she says.
"I think it will remain steady. We are seeing good turnover in the market. I don't think prices will drop too much more but it depends on what gold does."
