If Tesla and Panasonic fail (Reno, Sparks: rental car, balloon payment, sales) - Reno-Sparks area - Nevada (NV) - City-Data Forum

livefree00 · 08-17-2018, 10:01 AM

What do you predict will happen to housing market in Reno?

Will prices drop significantly due to the concurrent rise in interest rates?

Or will that not cause much drop in prices due to retirees from California keep buying with cash?

I ask this now since I am planning on renting for now and buy a home in 2019, and since Tesla is on the news too much these days.

If this has already been discussed, please be kind enough to redirect me to that thread.

Vic Romano · 08-17-2018, 11:22 AM

Who knows? It's a battery factory so I'd think the batteries would still be in demand. After all, there are the cars already out there...at some point the batteries have to be replaced. If it was the car factory I'd be more "concerned".

This type of issue (a city dependent upon certain industries) is relevant to most cities, so Reno is no different. Reno continues to diversify away from gaming with tech and light industry.

If you are retiring in Reno, and you think long term, the price of the house is less of an issue. If you are trying to bet that housing prices are going down in 2019, good luck. How long do you plan to live here?

Gatopescado · 08-20-2018, 05:22 PM

When Tesla implodes, I think Reno will be fine. A whole lotta other **** out in that industrial park. It's quite amazing, actually.

ZeApelido · 08-24-2018, 09:53 PM

Well unfortunately the media is generally speaking "fake news" about Tesla's financial stability. In actuality, Tesla is in a safer position than Ford, Chrysler, and probably GM (check out the trend in those stock prices).

Tesla / Pano batteries would be in huge demand either way, so don't expect any major drop.

Cold Warrior · 08-26-2018, 10:07 AM

Tesla is on track to lose 3 to 4 billion dollars this year. Elon Musk is under investigation by the SEC for manipulating the price of Tesla stock. Ford and GM are showing profits. Chrysler is no longer a company, since 2014. Fiat Chrysler is making a profit.

The primary threat to the battery factory is political. An end to electric car subsidies would sharply reduce the demand for batteries.

utsci · 08-26-2018, 11:17 AM

I believe the failure of Tesla is when, rather than if. However, Panasonic would be smart if they are contracting with other manufacturers of electric and solar power. I don't think Panasonic would dry up and blow away, but it will not be the "gigafactory" that Musk touts.

I believe that some of the workers will be displaced, but I don't know that many locals working for either company. There are tons of contractors coming though and spending money in the local economy with long-term stay hotels, rental cars, food, etc. The few locals I know that have tried either Panasonic or Tesla on for size did not stay with either for more than a few weeks. The demands placed on working hours and low wages was not desirable as long term jobs.

There is definitely a shortage of reasonably priced rentals, and they are expensive right now, but I don't think it has anything to do with Panasonic/ Tesla truly. The demand is strong and the supply is low. I believe that housing is high because people perceive that they have more money to spend and more people are employed. Even though more people are employed, wages are low and stagnant. Corporations are not investing in their employees. They are sitting on profits, paying executives, and trying to impress shareholders. There will be no loyalty with workers, they will go to the next company that offers $0.50 more per hour and corporations will begin to lag in productivity.

I believe that we currently have a false economy that will implode sometime in the next few years. Interest rates are going to go up and stocks are way over-valued. I don't know what will be the impetus for the stock market to correct, but it will.

I believe if interest rates go up and the stock market corrects, then housing will likely come down a bit. Already, year over year housing sales are down this summer. If you can find a reasonable rental then I would be inclined to see where the housing market goes. We are definitely at the peak price of the market now, just like we were 10 years ago.

livefree00 · 09-01-2018, 11:46 AM

Thank you for kind replies.

We will be renting an apartment for now and observe how housing market does next 1-2 years. We are looking at $6 to 700k one story homes. Preferably new ones. We like William Lyon homes ,at least their ranch style layouts, but in Reno Toll Brothers or HomeCrafters are the 2 main builders. It would be worth a wait if we could save $80-100k.

Chigu · 09-04-2018, 11:21 AM

Quote:

Originally Posted by livefree00

Thank you for kind replies.

We will be renting an apartment for now and observe how housing market does next 1-2 years. We are looking at $6 to 700k one story homes. Preferably new ones. We like William Lyon homes ,at least their ranch style layouts, but in Reno Toll Brothers or HomeCrafters are the 2 main builders. It would be worth a wait if we could save $80-100k.

I agree that housing prices are pretty high but I don’t see it dropping in the next year or two. I do see prices stagnating and thus if you want to wait a year or two you may only pay 10-15k more than today for the same house especially a new build. The problem is that there needs to be a catalyst for a significant correction. The big crash of 2008 was caused by everybody writing junk mortgages (negative amortization, interest only, teaser rates with huge balloon payments). Those problems are not as rampant now as they were 10 years ago. Another catalyst could be a downturn in a core industry. Reno has moved away from just gaming as is starting to diversify. I lived in a city that was tied very much to the oil and gas industry and when that crashed a few years ago so did the price of higher end homes. Also Reno only has so much land to build on due to the mountains, so there is land scarcity. It would be different if we were in the Midwest where it’s all flat land and you could build outwards forever.

Reading articles that say that the growth will be about 4% next year. I think that’s high. I think housing will now increase at the rate of inflation. Unless something big happens.

GardnervilleNV · 09-09-2018, 10:40 PM

I don't think price are going down anytime soon just up.

This is my scenario.

Silicon Valley will slow down big time. Apple, Cisco, HP and others will be impacted by Trump tariffs. Tesla won't. Tesla will be rewarded for production in the US. Also other cars are going to be more expensive thus Tesla would have more sales.
There will be many other companies who will try to do manufacturing in Nevada due to low tax and cheap labor. I think Nevada will grow big time in next 5 years. Last chance to buy something.

Chigu · 09-11-2018, 01:00 PM

I just got this article and here is a snippet.

“In February, the Reno-Sparks area broke the 12-year-old record of $365,000 set in January 2006. Since then, it has set new highs in March, June and July.
The new median price record is still lower when the old boom record is adjusted for inflation — $365,000 in 2006 is worth $463,800 today, according to the U.S. Bureau of Labor Statistics.”

So although it seems like we are in dangerous territory looking at absolute dollars. When you factor in inflation there is still a lot of room to grow. I don’t see prices declining anytime soon, but I think the exponential growth is over and prices will climb at a much more reasonable rate (2% a year).