Classic supply and demand continues to rule the Las Vegas home market. Inventory is low, demand is high so home prices continue to creep higher. In May, the Greater Las Vegas Association of REALTORS® MLS shows 3142 homes sold, down 7% from a year earlier, but the median price continues its rise, now $294,000. That is the highest median price since August 2007. Just six years ago, in May 2012, the median price of the 3330 homes sold was $129,000, so prices have risen 129% in six years. Back then, 48% of the homes were sold to cash buyers! Last month, only 19% of homes were purchased with cash.
In fact, looking back six years gives a great view of how far the market has come. In May 2012, 65% of the sales were either short sales or repos. This May, only 3% of sales were short sales or repos. Back then, inventory was huge, so a buyer had several homes to see with new listings hitting the market daily. Today, homeowners are staying in their homes while new residents contnue to move in from California, Texas, Florida and other areas. Therefore, resale homes are in short supply and demand for new construction is increasing.
In April 2018, new home sales rose 22% in April over last year with a median price of just less than $375,000. Builders sold 9400 new homes in 2017 and have closed over 3000 homes through April of this year. Although these seem to be giddy highs, they pale when compared to the boom years like 2005, when over 39,000 new homes were sold.
Real estate sales in July 2018 were not quite as hot as the weather but remained extremely strong. Las Vegas, Henderson and North Las Vegas real estate agents sold 3077 resale single family homes, up 3% from July 2017 but down 3% from June of this year. With slowly rising interest rates and prices, these are strong numbers.
The median price has hovered in the $289,00-293,000 range for the fourth straight month. Are prices leveling off, as the $290,000 median price for July might indicate, or do we look back the past three years and see that prices tend to rise early in a year, then moderate to the end of that year? That has been the case in 2015, 2016, 2017 and, now, 2018, so it is not yet time to say the market has peaked.
Inventory remains very tight with just a 48 day supply of homes without offers. The industry norm is 180 days for a balanced market, so we are way out of balance toward the sellers’ side. The last month Las Vegas had a supply of homes over two months was February 2017, so buyers must be extremely motivated and ready to act! Gone are the days of seeing a home, mulling it over for a few days and asking the sellers for a contribution to the buyer’s closing costs.
Buyers must be prepared with a strong mortgage approval letter and a willingness to get out and see homes as soon as they are on the market. Cash buyers represent only 18% of the transactions last month, so a loan letter may now be the deciding factor when a seller looks at multiple offers. Of the 1242 homes homes for sale available at or below the median price of $290,000 August 8, 2018 in Las Vegas, Henderson and North Las Vegas, 346 have been on the market 7 days or fewer. Another 135 have been on the market over 90 days, so you know those homes are overpriced!
Looking for a short sale or foreclosure to purchase at a bargain? Might want to check another area! Only 46 foreclosure properties are currently available and 66 short sales. Thirty-six of the short sales have been on the market over 30 days, as have 14 of the 46 foreclosed properties. In a hot market, overpriced listings still do not sell.
Overall, the market might be taking a breather or this could possibly be the start of the end of the sellers’ market. Las Vegas remains a working wage town. We lack the high-tech salaries that have destroyed affordability in the San Francisco Bay Area, and the building of new homes continues apace. Again, Las Vegas and Henderson alone have 4 of the top 20 selling master planned communities in the nation, and new homes add supply to a tight market. Wages are inching up and job growth continues to be good, but this is not a town of vast wealth and incomes. Propelled by irresponsible lender practices and a raging speculative fever, the median price for resale homes edged over $300,000 briefly in 2007. Thankfully, the market is slowing as we approach the $300,000 mark again. Perhaps it is time for a pause.
The chart above indicates the number of resale single family homes DECLINED 10% from June 2017, however prices rose 13% over the previous June. But that is a small part of the story. Inventory of all homes in the valley is a VERY tight 1.4 months (traditionally, a 6 month supply is considered normal). Worse yet, if you are a buyer looking for a home below the MEDIAN PRICE of $293,000, you have only a 20-day supply. And worst of all, those looking for $250,000 and below, you have only a 15-day supply! That means you must act quickly Multiple offers are the norm in this price range and GOOD HOUSES are sold in a matter of 3-4 days!
Why is the Las Vegas housing market so hot? Compared to the median price of $850,000 a San Francisco Bay Area home, our $293,000 median for resale homes is a steal. Our $370,000 median price for NEW homes is a bargain as well. Yet, when you PAY over a million dollars for a home here, you can end up with a newer, OR NEW, highly upgraded home with a pool, not a clapped out 1960’s era home with easy acces to a one hour commute to work!
Our inventory is low because we who live here love the city and valley and do not want to move. The lack of a personal income tax and low property taxes make this an affordable city with great roadways, low congestion and a fabulous mix of retail, culture (yes, don’t snicker), sports, outdoor life, bicycle and hiking trails and restaurants. My wife and I just drove 3 hours to Brian Head, Utah, to spend a weekend hiking and ATV’ing though the mountains, complaining only about the chilly evening temperatures. Easy drive, wonderful weekend, easy drive up and an easy drive home. No bridge tolls, no 10-20 mph bumper to bumper traffic!
A recent article written by Eli Segall (July 10, 2019) in our Las Vegas Review Journal pointed out that four of the master planned communities in the Las Vegas Valley rank in the top twenty communities nationwide in the number of NEW HOMES sold! Those are Summerlin and Skye Pointe in Las Vegas, Inspirada and Cadence in Henderson. Each of these communities is reporting huge double digit gains over the previous year. I highly recommend you get a copy of that newspaper and give it a read.
Summit Properties real estate agents are busy! In fact, our listings are going under contract so0 quickly, we frequently have only one current listing available! Check us out at www.SummitPropertiesVegas.com . Our agents are also managing to help their buyers win in multiple offer situations, often without being the highest price offered. We are also PROTECTING our bvuyers from exposing themselves to the dangers of “overbuying”, such as committing to pay an obscene amount over the appraised price. We use the appraisal to protect our buyers. We lived through 2006 and 2007!
So if you want to escape California and Las Vegas is a possibility, contact us through our website. We are here to assist and support you in your move to Henderson, North Las Vegas or Las Vegas.