Experts say housing prices could spike with influx of Tesla workers
Long-term trends show Nevada's housing market is recovering from the recession, but one economic analyst says that what the market really needs now is some stability over the next few years. Reno Public Radio's Michelle Bliss reports that's not likely with Tesla preparing to set up shop.
Housing prices and new construction have been up across the state, but Jeremy Aguero, with the economic research firm Applied Analysis, says Nevada's housing market could really use a brief respite.
"It's been a rollercoaster ride. We're growing really fast; we're declining really fast; we're growing really fast again. We need a three-year period that has some equilibrium in it," Aguero explains, "so that we can let the market just kind of settle down. Now, the problem is when you talk about bringing in a company that has 6,500 employees, that's going to be difficult to manage."
Aguero spoke to about a hundred realtors last week at an event in Reno sponsored by the state's homeowner relief program called Home Again Nevada. He explained that Nevada's housing market has seen some recent instability because home prices have recovered so much that demand has actually slowed down.
Looking forward to Tesla, Aguero says developers could hit some barriers trying to build enough housing in time, so it'll be critical to think outside the box.
"Millennials do not buy homes like their parents did," he says. "And so often we try to make everybody the same. It's okay that people rent, that they share homes. Those are all viable options."
Another concern is that Nevada's housing opportunity index is too low, meaning that because housing prices have improved so dramatically, they are starting to outstrip the gains in income that residents are seeing. Bruce Breslow, the state's director of business and industry, says economic development, including Tesla, could exacerbate that issue.
"You'll see a lot of the existing inventory swallowed up in the next couple years," Breslow explains, "which will spike home prices somewhat--at least, everyone's predicting that--but hopefully not too much because we don't want to put us out of reach of the income that people have here."
Right now, there are about 800 construction workers at the Tesla site, and Breslow says that'll grow to 2,800 within a year. As for permanent employees, he expects Tesla to hire 2,000 in the next two years, with the gigafactory's full roster of 6,500 employees complete in eight years.