Las Vegas Home Sales Up in August 2019

The prices of resale homes continued its slow rise in August, with the median price rising to $307,000, the highest level since March of 2007. Sales were also up from August 2018.

Many feel this reflects the lower interest rates that now seem to have bottomed out. Inventory of available homes on Sept. 15, 2019, was down 10.7% from two months ago, as back-to-back months of 3,000+ closings ate into inventory. The median price is up 3.72% year over year, but only up 1.3% since January.

Las Vegas Home Prices June 2019

Many felt the meteoric rise in Las Vegas home prices would lead to a collapse, or at least a fall in prices. What we are seeing, however, is market stabilization.

The sales of existing single family homes in the Las Vegas Valley (Las Vegas, North Las Vegas and Henderson) for June 2019 has slipped a bit compared to recent years, but the market remains vibrant as the median sales price for the year has remained essentially unchanged. The market has been aided by low mortgage rates, as well as the continuing desire of Californians to escape unsustainable housing costs and the realization of retirees nation-wide that our low-tax state is a wonderful place to live. A resident in Chicago, for instance, may have to pay $7,000-10,000 per year in property taxes. Here, they may pay in the neighborhood of $1500-2000! That is a $5,000 improvement in life-style.

Plus, we are a growing vibrant community with new restaurants, parks, and entertainment options adding to our already exciting facilities. Downtown is busy with the construction of Stevens brothers’ magnificent Circa, which will set a new standard for the area. Resort World from the Genting Group continues its progress toward a late 2020 opening. The Drew, a huge Marriott hotel/convention property rising 60-plus stories above the Strip is slated to open in 2022. But it doesn’t end there! The MSG Sphere is a unique idea in entertainment venues, with high-resolution 360 degree LED screens and the most sophisticated sound system in the world.

The new stadium built in conjunction with the Oakland Raiders is over half complete. AEG Worldwide has just signed on to bring events to the stadium once completed. And we are experiencing new energy in revamped casinos such as the Sahara reverting to its original name and the Hard Rock slowly becoming a Virgin property. All of this revitalization beats the hell out of a stagnant neighborhood with declining appeal and rising taxes! Is it time for you to move to Las Vegas?

Las Vegas Valley Real Estate Sales March 2019

The long-term sellers’ market continues this month in spite of a significant slowing in the pace of home sales. In March, the Greater Las Vegas Association of REALTORS® totals show the number of homes sold continues to trail the previous year, but prices remain stable.

March 2019 sales dropped over 17% from the year before, and this is a trend we expect to continue, although not always to this degree. Although, for the first quarter, sales are down a little over 15%, the Las Vegas real estate market is still considered a sellers’ market because inventory remains tight, with just a 2.89 month (87 days) supply of homes available. A 120-140 day supply of homes in Las Vegas is considered historically “normal”.

Prices have held steady since September 2018. The Median Price for March was $302,000. What we are finding is an affordability limit with ever fewer homes available in the price range below $275,000.

We certainly can’t blame interest rates, as today’s 30-year fixed rated conforming loan quoted by Wells Fargo Bank is 4.375% with APR of 4.443%. With the Federal Reserve disclosing their increased reluctance to raise rates, we do not anticipate mortgage rates rising much this year.

Projected sales for April also lag the year previous. It will be interesting to see what happens with prices.

Las Vegas Resale Home Sales For February 2019

Las Vegas real estate prices remain stable in February as the number of homes sold continues to trail 2018. The median price remained in the same area as it has been since August 2018 at $298,000, but it is up over 7% from February 2018. The number of Las Vegas homes sold in the first two months of 2018 is down over 14% from last year because we seem to have hit an affordability limit!

Interest rates remain in the sub-5% range, so it is price that is limiting affordability. Sellers tend to overprice the homes at the start, but we are seeing a sizable number of price reductions each week. This year, just under half the homes sold have been on the market for 30 days or less. Last year at this time, almost two-thirds (63%) of the homes sold within the first 30 days. Available inventory of homes with no offers rests at almost a 4-month supply, almost double the supply of homes we had last year.

New home sales, according to SalesTraq (a Las Vegas research company), declined 12% in January compared to a year earlier. The median price of new homes rose 6% compared to January 2018.

The trend of declining sales seems to be continuing into March as projected closings of resale homes seem to be well below March 2018. The economy continues strong but ever increasing prices must end some time, and that time seems to be 2019. Each month, we will likely see ever smaller price increases year over year as Las Vegas drops from the ranks of the hottest housing markets nationwide.

Las Vegas Home Sales for 2018 and January 2019

January 2019 continued the Las Vegas home sales trend of fewer sales at slightly higher prices. The $303,000 median sales price was the highest here since June 2007, which was just as prices started spiraling downward for three and a half years. However, adjusted for inflation, we are nowhere near that peak number.

So, how is the Las Vegas real estate market? Is Las Vegas real estate in a bubble? Sales, although down 20% from the year before, remain strong. Low mortgage rates are helping people decide that they should buy now rather than hope prices and interest rates will go down. Most likely, neither will. So, are we in a bubble? No. Our local economy continues to grow, bringing new residents to fill new jobs. And we still have 3 billion-dollar-plus construction projects under way.

Our inventory rests at about a four month supply, which, for Las Vegas, is about normal. Gone are the days sellers would have three or four offers within a day of listing their home for sale. In fact, for the past two months, more homes listed for sale on the market have reduced their listing price than new homes have come on the market. For example, last week 879 homes on the market reduced the asking price, while only 735 new listings entered the market.

The much feared rise in interest rates appears to have moderated. It seems the Federal Reserve is less inclined to raise interest rates as much in 2019 as it did in 2018. Most lenders are offering 30-year FHA loans well under 5% these days. We can only hope that continues.

So, what is the Las Vegas real estate forecast for 2019? In the opinion of this REALTOR® Broker, I see the number of sales decreasing 5-10% compared to 2018 while prices inch upward because of the growth of the economy.

Las Vegas Resale Home Sales in 2018 – What is 2019 Going to Look Like?

Sticker Shock! Mortgage Rates! Lack of Inventory! These three issues contributed to a slowing in the number of sales of existing single family homes in Las Vegas in 2018.

Sticker shock comes with the ever increasing prices sellers are asking for their homes. That issue is in the process of being resolved as inventory grows, allowing buyers more options. We also saw a flattening of the Median Sales Price in 2018. It rose only a little over 1% from May through December. Many buyers are pausing to see if prices will decline. With an increasing population and solid employment in the valley, that is not likely, but neither can prices continue to increase at such a rate. The Median Price rose 26.8% from $235,000 in December 2016 to $298,000 in December 2018. That is not a sustainable rate of growth.

As for mortgage rates, they rose about one-half percent in 2018 as the Federal Reserve increased its rates three times. For a person with a $250,000 loan, that adds about $75 per month to their mortgage payment. Thus, houses become less affordable. It is predicted that the Federal Reserve will increase rates through 2019, but that depends on the overall economy. Mortgage rates certainly will NOT decline, so they will continue to be a factor slowing sales. For us older folks, it is difficult to imageine buyers thinking 4.5% interest is HIGH, when we remember rates of 7% being celebrated as reasonable in the early 2000’s and rates in double digits in the late 1970’s and 1980’s.

Finally, inventory has been tight. Through August of 2018, inventory hovered under a two-month supply. That caused buyers to match or exceed list price in their offers on many occasions. Those days are over! Since September, sales have slowed considerably. In fact December 2018 sales were 19% below December of 2017. Buyers have hit the pause button. Inventory of homes not under contract currently available is right around 7,000 today, so we now have over a three month supply of homes. Another good sign for buyers is price decreases of existing unsold listings almost equal the number of new listings. The market is correcting.

New home sales continue to outpace the year before. According to an article written by Eli Segall in the Las Vegas Review Journal on January 25, 2019, 2018 NEW home sales, including single family homes, townhomes and condominius, totaled 10,669 with a median price of $396,994. Although 10,000 new home sales is very good when compared to the recent past, it is far short of 2005 when 10,000 new homes sold in the 3rd Quarter! The median price for new homes did rise 7% from 2017. We expect that to stay level as sales of more affordable product such as condominiums increase in 2019.

So what lies ahead for Las Vegas home sales in 2019? REALTOR.com projects Las Vegas prices will rise over 8% in 2019, and volume will inch up over 2018 (a year in which sales went DOWN 7.4% from 2017). That may be true if you include new homes, condos and townhouses, but I see a much smaller increase in the median price for resale homes, as interest rates and affordability have started to curb buying power in a valley not known as a high wage center. I predict fewer homes sold in 2019 with a median price that inches up at a much slower pace.

This is Not 2008 All Over Again: The Mortgage Lending Factor

This is Not 2008 All Over Again: The Mortgage Lending Factor | Simplifying The Market

Some are afraid the real estate market may be looking a lot like it did prior to the housing crash in 2008. One of the factors they’re pointing at is the availability of mortgage money.

Recent articles about the availability of low-down payment loans and down payment assistance programs are causing concern that we’re returning to the bad habits of a decade ago. Let’s alleviate the fears about the current mortgage market.

The Mortgage Bankers’ Association releases an index several times a year titled: The Mortgage Credit Availability Index (MCAI). According to their website:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is…a summary measure which indicates the availability of mortgage credit at a point in time.”

Basically, the index determines how easy it is to get a mortgage. The higher the index, the more available the mortgage credit.

Here is a graph of the MCAI dating back to 2004, when the data first became available:This is Not 2008 All Over Again: The Mortgage Lending Factor | Simplifying The Market As we can see, the index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI (to below 100), as mortgage money became almost impossible to secure.

Thankfully, lending standards have eased since. The index, however, is still below 200, which is half of what it was before things got out of control.

Bottom Line

It is easier to get a mortgage today than it was immediately after the market crash, but it is still difficult. The difference in 2006? At that time, it was difficult not to get a mortgage.

Buyer Demand Growing in Every Region

Buyer Demand Growing in Every Region | Simplifying The Market

Buyers are out in full force this fall, increasing the demand for homebuying in all four regions of the country.

According to the latest ShowingTime Showing Index,

“Home showing activity was up again nationwide with a 4.6 percent rise in traffic, as the traditionally slow fall season began with a marked boost in buyer interest.”

Buyers clearly have the right idea, as mortgage rates have dropped over a full percentage point since the fall of 2018. They’ve hovered in a historically low range since this summer, making the overall cost of homeownership significantly more attractive and affordable.

Here’s the breakdown of how ShowingTime reports current buyer traffic patterns across the country:

“The West Region, which until August had experienced 18 consecutive months of flagging home buyer traffic, lead the four regions in year-over-year improvement with an 8.9 percent increase in buyer activity.

The South followed with a 6.4 percent increase, the largest such improvement in the region since April 2018, with the Northeast Region’s 5.6 percent increase the next largest among the four regions.

The Midwest’s more modest 0.8 percent year-over-year growth rounded out the nation’s promising month.”

Buyer Demand Growing in Every Region | Simplifying The MarketWith ShowingTime reporting “nationwide growth for the second consecutive month, a first since December 2017 – January 2018”, it’s one more reason why selling your house this winter is the way to go. List while buyers are on the market, before competition with other sellers pops up in your neighborhood.

Bottom Line

If you’re thinking of waiting until spring to sell, think again! Let’s get together to discuss listing your house now while buyer traffic is actively surging throughout the country.

Homeownership Rate Remains on the Rise

Homeownership Rate Remains on the Rise | Simplifying The Market

In the third quarter of 2019, the U.S. homeownership rate rose again, signaling another strong indicator of the current housing market.

The U.S. Census Bureau announced,

“The homeownership rate of 64.8 percent was not statistically different from the rate in the third quarter 2018 (64.4 percent), but was 0.7 percentage points higher than the rate in the second quarter 2019 (64.1 percent).”

Homeownership Rate Remains on the Rise | Simplifying The MarketToday there is still a lack of inventory, particularly at the entry and middle-level segments of the market, but that is not stopping buyers from making every effort to pursue homeownership. The many financial and non-financial benefits continue to drive the American Dream and will likely do so for generations to come.

Bottom Line

If you’re thinking of buying a home, let’s get together to make your dream a reality.

75 Years of VA Home Loan Benefits

75 Years of VA Home Loan Benefits | Simplifying The Market

Today, on Veterans Day, we salute those who have served our country in war or peace, and we thank them for their sacrifice.

This year marks the 75th anniversary of VA Home Loan Benefit offerings through the Servicemen’s Readjustment Act, also known as the GI Bill. Since 1944, this law has created opportunities for those who have served our country, ranging from vocational training to home loans.

Facts About VA Home Loans:

  • Nearly 24 million home loans have been guaranteed by the Veterans Administration.
  • Nearly 82% of VA home loans are made with no down payment.
  • The VA also provides grants to help seriously disabled Veterans purchase, modify, or construct a home to meet their needs. Last year the VA provided 2,000 grants totaling $104 million.

Benefits of a VA Home Loan:

  1. No down payment
  2. No Private Mortgage Insurance*
  3. Lower credit score requirements
  4. Limitation on closing costs
  5. Lower average interest rates

*More information on VA Home Loan Fees

 Bottom Line

The best thing you can do today to celebrate Veterans Day is to share this information with those who can benefit from these opportunities. For more information, or to find out how to qualify to use a VA Home Loan Benefit, let’s get together to navigate through the process. Thank you for your service!

Forget the Price of the Home. The Cost is What Matters.

Forget the Price of the Home. The Cost is What Matters. | Simplifying The Market

Home buying activity (demand) is up, and the number of available listings (supply) is down. When demand outpaces supply, prices appreciate. That’s why firms are beginning to increase their projections for home price appreciation going forward. As an example, CoreLogic increased their 12-month projection for home values from 4.5% to 5.6% over the last few months.

The reacceleration of home values will cause some to again voice concerns about affordability. Just last week, however, First American came out with a data analysis that explains how price is not the only market factor that impacts affordability. They studied prices, mortgage rates, and wages from January through August of this year. Here are their findings:

Home Prices

“In January 2019, a family with the median household income in the U.S. could afford to buy a $373,900 house. By August, that home had appreciated to $395,000, an increase of $21,100.”

Mortgage Interest Rates

“The 0.85 percentage point drop in mortgage rates from January 2019 through August 2019 increased affordability by 9.7%. That translates to a $40,200 improvement in house-buying power in just eight months.”

Wage Growth

“As rates have fallen in 2019, the economy has continued to perform well also, resulting in a tight labor market and wage growth. Wage growth pushes household incomes upward, which were 1.5% higher in August compared with January. The growth in household income increased consumer house-buying power by 1.5%, pushing house-buying power up an additional $5,600.”

When all three market factors are combined, purchasing power increased by $24,500, thus making home buying more affordable, not less affordable. Here is a table that simply shows the data:Forget the Price of the Home. The Cost is What Matters. | Simplifying The Market

Bottom Line

In the article, Mark Fleming, Chief Economist at First American, explained it best:

“Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers – surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.”

Summit Properties

9670 W. Tropicana Ave.    Ste. 115                                 

 Las Vegas, NV  89147

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