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.

A Great Way to Increase Your Family’s Net Worth

A Great Way to Increase Your Family’s Net Worth | Simplifying The Market

Every three years, the Federal Reserve conducts its Survey of Consumer Finances. Data is collected across all economic and social groups. The latest survey data covers 2013-2016.

The study revealed that the median net worth of a homeowner is $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth.

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why Gallup reported Americans picked real estate as the best long-term investment for the sixth year in a row. According to this year’s results, 35% of Americans chose real estate. Stocks followed at 27%, then savings accounts and gold.

Bottom Line

If you want to find out how you can use your monthly housing cost to increase your family’s wealth, let’s get together to help you through the process.

Busting the Myth About a Housing Affordability Crisis

Busting the Myth About a Housing Affordability Crisis | Simplifying The Market

It seems you can’t find a headline with the term “housing affordability” without the word “crisis” attached to it. That’s because some only consider the fact that residential real estate prices have continued to appreciate. However, we must realize it’s not just the price of a home that matters, but the price relative to a purchaser’s buying power.

Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by 3.5% over the last year.

Let’s look at three different reports issued recently that reveal how homes are very affordable in comparison to historic numbers, and how they have become even more affordable over the past several months.

1. National Association of Realtors’ (NAR) Housing Affordability Index:

Here is a graph showing the index going all the way back to 1990. The higher the column, the more affordable homes are:Busting the Myth About a Housing Affordability Crisis | Simplifying The MarketWe can see that homes are less affordable today (the green bar) than they were during the housing crash (the red bars). This was when distressed properties like foreclosures and short sales saturated the market and sold for massive discounts. However, homes are more affordable today than at any time from 1990 to 2008.

NAR’s report on the index also shows that the percentage of a family’s income needed for a mortgage payment (16.5%) is dramatically lower than last year and is well below the historic norm of 21.2%.Busting the Myth About a Housing Affordability Crisis | Simplifying The Market

2. Black Knight’s Mortgage Monitor:

This report reveals that as a result of falling interest rates and slowing home price appreciation, affordability is the best it has been in 18 months. Black Knight Data & Analytics President Ben Graboske explains:

“For much of the past year and a half, affordability pressures have put a damper on home price appreciation. Indeed, the rate of annual home price growth has declined for 15 consecutive months. More recently, declining 30-year fixed interest rates have helped to ease some of those pressures, improving the affordability outlook considerably…And despite the average home price rising by more than $12K since November, today’s lower fixed interest rates have worked out to a $108 lower monthly payment…Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%.”

3. First American’s Real House Price Index:

While affordability has increased recently, Mark Fleming, First American’s Chief Economist explains:

“If the 30-year, fixed-rate mortgage declines just a fraction more, consumer house-buying power would reach its highest level in almost 20 years.”

Fleming goes on to say that the gains in affordability are about mortgage rates and the increase in family incomes:

“Average nominal household incomes are nearly 57 percent higher today than in January 2000. Record income levels combined with mortgage rates near historic lows mean consumer house-buying power is more than 150 percent greater today than it was in January 2000.”

Bottom Line

If you’ve put off the purchase of a first home or a move-up home because of affordability concerns, you should take another look at your ability to purchase in today’s market. You may be pleasantly surprised!

The Benefits of Growing Equity in Your Home

The Benefits of Growing Equity in Your Home | Simplifying The Market

Over the last couple of years, we’ve heard quite a bit about rising home prices. Today, expert projections still forecast continued growth, just at a slower pace. One of the often-overlooked benefits of rising home prices is the positive impact they have on home equity. Let’s break down three ways this is a win for homeowners.

1. Move-Up Opportunity

With the rise in prices, homeowners naturally experience an increase in home equity. According to the Homeowner Equity Insights from CoreLogic,

“In the first quarter of 2019, the average homeowner gained approximately $6,400 in equity during the past year.”

This increase in profit means if homeowners decide to sell, they’ll be able to put their equity to work for them as they make plans to move up into their next home.

2. Gain in Seller’s Profit

ATTOM Data Solutions recently released their Q2 2019 Home Sales Report, indicating the seller’s profit jumped at one of the fastest rates since 2015. They said:

“A look at the national numbers showed that U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since the original purchase of $67,500…the average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of the original purchase price.”

Looking at the amount paid when they bought their homes, and then the amount they received after selling, we can see that some homeowners were able to walk away with a significant gain.

3. Out of a Negative Equity Situation

Negative equity occurs when there is a decline in home value, an increase in mortgage debt, or both. Many families experienced these challenges over the last decade. According to the same report from CoreLogic,

“U.S. homeowners with mortgages (roughly 63% of all properties) have seen their equity increase by a total of nearly $485.7 billion since the first quarter 2018, an increase of 5.6%, year over year.

In the first quarter of 2019, the total number of mortgaged residential properties with negative equity decreased…to 2.2 million homes, or 4.1% of all mortgaged properties.”

The good news is, many families have moved beyond a negative equity situation, and no longer owe more on their mortgage than the value of their home.

Bottom Line

If you’re a current homeowner, you may have more equity than you realize. Your equity can open the door to future opportunities, such as moving up to your dream home. Let’s get together to discuss your options and start to put your equity to work for you.

5 Real Estate Reality TV Myths Explained

5 Real Estate Reality TV Myths Explained | Simplifying The Market

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV binge session? We’ve all been there, watching entire seasons of shows like “Property Brothers,”Fixer Upper,” and “Love It or List It,” all in one sitting.

When you’re in the middle of your real estate-themed TV show marathon, you might start to think everything you see on the screen must be how it works in real life. However, you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and decide to purchase one of them.
Truth: There may be buyers who fall in love and buy the first home they see, but according to the National Association of Realtors, the average homebuyer tours 10 homes as a part of their search.  

Myth #2: The houses the buyers are touring are still for sale.
Truth: Everything is staged for TV. Many of the homes shown are already sold and are off the market. 

Myth #3: The buyers haven’t made a purchase decision yet.
Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy. 

Myth #4: If you list your home for sale, it will ALWAYS sell at the open house.
Truth: Of course, this would be great! Open houses are important to guarantee the most exposure to buyers in your area, but they are only one piece of the overall marketing of your home. Keep in mind, many homes are sold during regular showing appointments as well. 

Myth #5: Homeowners decide to sell their homes after a 5-minute conversation.
Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their homes and move on with their lives and goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee you can make the home of your dreams a true reality.

American Confidence in Housing at an All-Time High

American Confidence in Housing at an All-Time High | Simplifying The Market

Fannie Mae just released the July edition of their Home Purchase Sentiment Index (HPSI). The HPSI takes information regarding consumers’ confidence in the real estate market from Fannie Mae’s National Housing Survey and condenses it into a single number. Therefore, the HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions.

Great News! The index reached its highest level since Fannie Mae began their survey. Breaking it down, the report revealed:

  • The share of Americans who say it is a good time to buy a home increased from the same time last year.
  • The share of those who say it is a good time to sell a home increased from the same time last year.
  • The share of Americans who say they are not concerned about losing their job over the next 12 months increased dramatically (16 percentage points) from the same time last year.
  • The share of Americans who say mortgage rates will go down over the next 12 months increased dramatically (24 percentage points) from the same time last year.

The day after the index was released, Freddie Mac also announced the 30-year fixed-rate mortgage rate fell to its lowest level in three years.

Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae explained the uptick in the index:

“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges. Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category.”

Bottom Line

Consumers are feeling good about the real estate market. Since Americans are not worried about their jobs, see mortgage rates near an all-time low, and believe it is a good time to buy, the housing market will remain strong for the rest of the year.

Summit Properties

5510 S. Fort Apache Rd.
Suite 33
Las Vegas, NV 89148

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