Sales of new and existing homes in the Las Vegas area continued to be strong in September. The numbers in the chart have been adjusted to show all single family homes in the valley. Previously, only detached single family homes have been included. The numbers do not include townhouses or condominiums.
September saw the number of sales of existing homes drop about 1% from September 2016, but the MEDIAN PRICE continues to rise, up 13.6% from September 2016 to $266,000. The last time we saw a median price that high was December 2007, when prices had begun to plunge from their all time high median price of $310,000 in February 2007. They plummeted to a low of $118,000 in January 2012.
According to the Sept. 28, 2017 Las Vegas Review Journal, quoting numbers from Home Builders Research, new home sales and prices in Las Vegas, Henderson and North Las Vegas have soared as well. In August, builders closed 808 new homes at a median price of $342, 973. About 5800 NEW homes have been sold in the first eight months of 2017, up 19% from 2016.
Factors that drive the demand are the favorable tax environment of Nevada compared to California, Illinois and New England. The fact that the Oakland Raiders were able to con local and state politicians into paying over $750,000,000 toward a new stadium complex shows how gullible and naive our leaders are, thus encouraging more large employers to relocate here after receiving huge tax concessions. However, these tax benefits apply to individuals as well, as there is no personal income tax in the state, so retirees and small business owners find it a great place to live.
Several large construction projects are headed our way, from the north Las Vegas Strip growth to the Raider Stadium to revamping and updating of Strip hotels to Steve Wynn's lake project. Job growth and strength seems good for the foreseeable future. We are waiting to see what the Genting Group Resorts World does across the Strip from the recently purchased, and soon to be renamed, Fontainebleau Hotel. If we ever see one or both of those projects start up, that will mean thousands more construction jobs followed by thousands of permanent jobs.
Total existing home sales for the first nine months of 2017 are up over 8% from 2016, passing 26,000 on the Multiple Listing Service. The MEDIAN PRICE has risen over 9% since January of this year. The two dangers to continued price increases are the lack of inventory (less than two month supply) and the expected rise in interest rates by the end of the year. Experts predicted this year's interest rates boosts would harm mortgage rates, but the impact has been minimal, so, with little inflation, the likelihood of large interest rate increases is minimal. However, there comes a point where buyers SHOULD resist bidding ever more for the limited number of homes on the market. Supply and demand meets at price. Buyer desperation cannot last forever.