Dickson Realty Luxury Trends Year-End 2015

Luxury Trends 2015 Market Report from the Market Leader

Year-End 2015 DicksonLuxury.com

COVER PROPERTY FEATURED:

90 Hawken Road Reno NV 89519 $2,695,000 MLS #16000006

Welcome

TO OUR 2015, LUXURY MARKET REPORT. Happy New Year and Welcome to Dickson Realty’s year end luxury real estate review. As we begin the new year let us take a look at luxury home sales in the rearview mirror. 2015 was improved over 2014 in the number of homes sold over one million dollars. However, market times grew 32% as more homeowners stepped into the market in the hopes of participating in the recovery. Inventory levels remain fairly high with over 125 homes listed over one million dollars currently for sale. Consistently this year, 50% of all the sales and listings over one million dollars were between 1 and 1.5 million. Typically we see a stronger finish in high end sales at the end of the year but this year was a little sluggish possibly as a result of the big winter and reduced mobility of buyers.

All in all the market was positive and steady. As we look forward to 2016 we expect a similar scenario. Slow but steady sales with a slight improvement in the averages of both price per square foot and sales price. We hope you enjoy this year end edition of our luxury report and we wish you a happy new year!

Whether buying or selling, call one of the Luxury Specialist agents at Dickson Realty to help achieve your real estate goals. We look forward to the opportunity to work with you

—CEO Dickson Realty

2015 vs. 2014 Luxury Home Averages $1 million to $20 million*

+15

-4.6%

-1.3%

+32%

TOTAL UNITS SOLD

AVERAGE SOLD PRICE

AVERAGE PRICE PER SF

AVERAGE DAYS ON MARKET

2015: 92 2014: 77

2015: $1,471,240 2014: $1,543,310

2015: $288 2014: $292

2015: 294 2014: 223

*Source: Northern Nevada Multiple Listing Service (NNRMLS) transaction volume for transactions from $1 - $20 million for all Reno/Sparks areas (Area 100), January 1-December 31, 2015, as of January 4, 2015.

Excludes the $25,000,000 sale of Ranch Harrah.

Top 5 Luxury Real Estate Companies 2015 Market Share for Reno/Sparks Homes Sold $1 to $20 Million*

DICKSON REALTY

43.2%

Chase 15.47% Ferrari-Lund 6.98% Coldwell Banker 6.76% RE/MAX Affiliates 3.15%

Active Listings Over $1 Million $1,000,000– $1,499,999

47%

$1,500,000– $1,999,999

20%

Sold Listings $1 - $20 Million* $1,500,000– $1,999,999

13%

$2,000,000– $2,499,999

12%

$2,500,000$20,000,000

2%

$2,000,000– $2,499,999

12%

$2,500,000 and higher

$1,000,000– $1,499,999

73%

21%

$1,000,000– 51 Active Listings $1,499,999 $1,250,349 Average Price

$1,000,000– 67 Sold Listings $1,499,999 $1,186,333 Average Price

$1,500,000– 21 Active Listings $1,999,999 $1,760,666 Average Price

$1,500,000– 12 Sold Listings $1,999,999 $1,728,791 Average Price

$2,000,000– 13 Active Listings $2,499,999 $2,331,000 Average Price

$2,000,000– 11 Sold Listings $2,499,999 $2,185,545 Average Price

$2,500,000 23 Active Listings and higher $4,240,747 Average Price

$2,500,000- 2 Sold Listings $20,000,000 $5,525,000 Average Price

178 Average Days On Market

249 Average Days On Market

253 Average Days On Market

307 Average Days On Market

305 Average Days On Market

257 Average Days On Market

228 Average Days On Market

518 Average Days On Market

*Source: Northern Nevada Multiple Listing Service (NNRMLS) transaction volume for transactions from $1 - $20 million for all Reno/Sparks areas (Area 100), January 1-December 31, 2015, as of January 4, 2015.

Excludes the $25,000,000 sale of Ranch Harrah.

2016 housing market outlook

by Nancy Fennell, President & CEO, Dickson Realty as recently appeared in Northern Nevada Business Weekly We have heard the national news that overall sales for existing homes in the last months of 2015 were down from the same time in 2014.

What does this mean? Are we headed for another difficult real estate market? Are we heading for another bubble in housing?

Lawrence Yun, chief economist for the National Association of Realtors, suggested sales were affected as the industry adjusts to the “know before you owe” rule, affordability levels or sparse inventory. The TRID (Truth in Lending Act/Real Estate Settlement Procedures Act which created the acronym the TILA/RESPA Integrated Disclosure Rule or TRID) doesn’t appear to have been a noticeable issue in our market. The title companies did an excellent job training for the past nine months preparing Realtors and lenders of the nuances of the new legislation. In our local market, I believe it is still the lack of inventory, particularly under $600,000, along with the normal seasonal slow-down that is causing our drop in sales.

While sales were down from the previous month in our market, pricing remains stable and demand appears to remain high at least in the under $600,000 market that currently makes up 95 percent of our sales. Remember, the inventory level under $300,000 is still hovering around a one-month supply and from $300,000 to $600,000, just about two months’ supply instead of six months which indicates a “normal” market.

With supply down and prices rising, are we headed down the same slippery slope we encountered from late 2007 to 2012? Will we end up with homeowners unable to pay their mortgages and prices falling? I don’t think so. The big difference is jobs; we are seeing an increase in jobs now and we were losing jobs in 2007.

I looked at existing housing sales in the Reno/Sparks area by price range from 2004 to 2015. What I find is encouraging and I hope it will put to bed any concerns about parts of our market becoming overpriced. In 2004, REALTORS® sold 3,263 houses through the Northern Nevada Regional Multiple Listing Service in the Reno/Sparks area under $300,000. The median days on market was 46 days in 2004 versus 57 this year, and the median price was $230,000 in 2004 and was exactly the same for 2015. During the years of 2005 to 2015, the highest median price was $265,175 in 2006 and the lowest was $144,000 in 2011. (continued on page 7)

Significant Dickson Sales in 2015

SOLD $3,050,000

Seller Representation by Dickson Realty

SOLD $2,210,000

Seller & Buyer Representation by Dickson Realty

SOLD $2,200,000

Seller & Buyer Representation by Dickson Realty

SOLD $2,180,000

Seller & Buyer Representation by Dickson Realty

South Suburban

Montrêux

Montrêux

Montrêux

SOLD $2,300,000

Seller Representation by Dickson Realty

SOLD $2,210,000

Seller & Buyer Representation by Dickson Realty

SOLD $2,200,000

Seller & Buyer Representation by Dickson Realty

SOLD $2,050,000

Seller & Buyer Representation by Dickson Realty

Montrêux

Montrêux

SW Reno

Montrêux

Significant Dickson Sales in 2015

SOLD $1,900,000

Seller Representation by Dickson Realty

SOLD $1,585,000

Seller & Buyer Representation by Dickson Realty

SOLD $1,450,000

Seller Representation by Dickson Realty

SOLD $1,437,000

Seller & Buyer Representation by Dickson Realty

SW Reno

Eaglesnest

Galena Forest

MontrĂŞux

SOLD $1,687,500

Seller & Buyer Representation by Dickson Realty

SOLD $1,480,000

Seller & Buyer Representation by Dickson Realty

SOLD $1,450,000

Seller Representation by Dickson Realty

SOLD $1,429,000

Seller Representation by Dickson Realty

South Suburban

Eaglesnest

South Suburban

Eaglesnest

Significant Dickson Sales in 2015

SOLD $1,425,000

Seller & Buyer Representation by Dickson Realty

Old SW Reno

SOLD $1,400,000

Seller Representation by Dickson Realty

South Suburban

2016 housing market outlook (continued from page 5) In the next most robust price range of $300,001 to $600,000, I found the same trends. In 2004, we sold 1,997 homes in this price range versus 2,276 in 2015. Median days on the market were 54 (2004), versus 67 (2015) and the median price was $378,000 in 2004, versus $365,000 in 2015. These trends suggest we are still in a slow but steady housing recovery. So, while we are seeing higher prices in these ranges, when we look at the big picture, we are still selling houses close to what we sold them for in 2004.

For sales from $600,001 and above, it was interesting to note the median price for every price level has remained fairly constant over the past 11 years without the disastrous drop in median price we had in the lower price ranges. In homes that sold from 2004 between $1 million and $1.2 million, the median price was $1.2 million for all 11 years except for two when it dropped to $1.1 million. We see the same trend in the $1.5 million to $2 million range. The median price in 2004 was $1.75 million and dropped to $1.7 million in 2007, $1.6 million in 2008 and has remained fairly stable at $1.7 million since. In homes that sold from $2 million to $3 million, the median price of $2.2 million increased to a high of $2.6 million in 2007, and today is $2.3 million. Although, only 15 resale homes have sold over $3 million in the Reno/ Sparks area since 2004, their median price has only fluctuated from $3.5 million to $4.6 million in 11 years, and with the small number of homes sold in this price range, one or two sales can affect the median significantly. I believe the median prices have remained fairly consistent over the years because most of these homeowners were better able to withstand the economic downturn and stayed in their homes, which kept the sales flat. Prior to 2007, many homeowners in this price range had the option to build their own dream home and they did.

Although the Federal Reserve Board raised interest rates slightly in mid-December, no one believes this will affect housing sales in any significant way and all signs are the Federal Reserve will apply a slow but steady increase in rates in order not to derail the slow economic recovery.

The Home Price Expectation Survey, a nationwide panel of more than 100 economists, real estate experts and investment and market strategists was just released. This is a study of where they believe home prices are headed. To put things in perspective, in the “prebubble” of 1987 to 1999, home appreciation was 3.6 percent annually. During the “bubble” of January 2000 to May of 2007, home appreciation was 6.9 percent; during the bust, homes depreciated at -5.2 percent, while during the recovery to date, January 2012 to September 2015, homes have appreciated 4 percent. Their projections have homes appreciating 3.9 percent in 2015; 3.4 percent in 2016 and 3.1 percent through 2020.

That kind of stability is comforting and sustainable, and bodes well for our housing economy in 2016, although not without some challenges; mainly inventory shortages in some price ranges. The good news is we have demand for housing.

Current Dickson Luxury Listings Click on the MLS number to view each listing online.

$5,480,000

MLS# 150007415 SOUTH SUBURBAN RENO

$4,800,000

MLS# 150002576

$4,500,000

$4,200,000

MLS# 150012198 SOUTH SUBURBAN RENO

$2,695,000

MLS# 160000006

$2,675,000

MLS# 150010094

$2,595,000

MLS# 140010060

$2,500,000

MLS# 150015524 SOUTH SUBURBAN RENO

$2,495,000

MLS# 150007996

$2,450,000

MLS# 140008664

$2,390,000

$2,385,000

MONTREUX

SW RENO

MONTREUX

EAGLESNEST

MONTREUX

MLS# 140010943

MLS# 140015612 SOUTH SUBURBAN RENO

MONTREUX

OLD SW RENO

MLS# 150008410 SOUTH SUBURBAN RENO

Current Dickson Luxury Listings Click on the MLS number to view each listing online.

$2,200,000

MLS# 150010606

$2,200,000

MLS# 150013612

$2,125,000

MLS# 140012423

$1,995,000

MLS# 150011528

$1,850,000

MLS# 150016214

$1,850,000

MLS# 150014883

$1,795,000

MLS# 140012641

$1,700,000

MLS# 150010345

$1,625,000

MLS# 140002121

$1,599,000

MLS# 150005814

$1,495,000

MLS# 150011666

$1,495,000

MONTREUX

ARROWCREEK

MONTRUEX

MONTREUX

SW RENO

MONTREUX

WASHOE VALLEY

MONTREUX

VERDI, NV

MONTREUX

MONTREUX

MLS# 150001974 SOUTH SUBURBAN RENO

Current Dickson Luxury Listings Click on the MLS number to view each listing online.

$1,488,000

MLS# 150015728

$1,375,000

$1,295,000

MLS# 150014640

$1,259,000

$1,250,000

$1,200,000

ARROWCREEK

GALENA FOREST

ARROWCREEK

GALENA FOREST

MLS# 150015385

$1,299,000

MLS# 150009616

MLS# 150012199 SOUTH SUBURBAN RENO

$1,250,000

MLS# 150002255

MLS# 150006757

$1,250,000

MLS# 150009037

$1,245,000

MLS# 150001077

MLS# 150009813

$1,150,000

MLS# 150014275

$1,135,000

ARROWCREEK

WASHOE VALLEY

SW RENO

MONTREUX

DOWNTOWN RENO

ARROWCREEK

MLS #150002107 SOUTH SUBURBAN RENO

Current Dickson Luxury Listings Click on the MLS number to view each listing online.

$1,070,000

WASHOE VALLEY

MLS# 150012542

CAUGHLIN RANCH

775.746.7000

$999,000 SOMERSETT

DAMONTE RANCH 775.850.7000 TRUCKEE 530.587.7444

MLS# 150010886

SOMERSETT 775.746.7222 DONNER LAKE 530.587.4811

$1,016,315 SOMERSETT

MONTRÊUX 775.849.9444

SPARKS 775.685.8800

GRAEAGLE 530.836.1700

DicksonLuxury.com | luxury@dicksonrealty.com

© 2015-2016 Dickson Realty. All rights reserved. Although the information above is deemed reliable, Dickson Realty does not guarantee its accuracy.

MLS# 150009520

DOWNTOWN 775.324.7000