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Latest on Las Vegas Home Prices

Las Vegas home prices continue to rise. If anything, the trend seems to have strengthened in recent months. For example, during the first half of last year prices per square foot rose 4.35% from $115 per square foot to $120 per square foot. During the first half of this year prices per square foot rose 7.26% from $124 per square foot to $133 per square foot.

It remains to be seen if this trend will continue, but it has remained intact since January 2012 and we will still need to move up over 40% to reach the home price heights of May and June 2006 when prices were $188 per square foot.

One thing encouraging the home price increases is the steady drop in inventory from November 2014 when there was a 5.3 month supply of homes on the market to the end of last month when the supply had diminished to 2.2 months.

Of course, even if the trend continues upward, there are likely to be some pull backs and not every home or neighborhood will participate with the same vigor. Every neighborhood has its own characteristics. For example, while the overall price per square foot of Las Vegas homes has more than doubled since January 2012, prices in MacDonald Highlands have risen only by 68% and prices in The Ridges only 23%. The reason for this is that homes in those communities are quite expensive and so a relatively small number of homes is sold in any given month. Also, because each of the homes in those communities has unique qualities, the price of any home sold is specific to that home. These factors result in price movement in those communities to appear erratic when looked at on a grand scale.



If you are planning to buy or sell a home in the Las Vegas area, please give me a call. I have broad experience. I have sold a $130,000 townhouse, multi-million dollar custom mansions, a $2.6 million lot, and everything in between. I assure you that I can help you.

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Current Las Vegas Real Estate Market

Since hitting its low of $64 per square foot in January of 2012, by last month the median price of homes sold in Las Vegas had risen to $126 per square foot. Although we are not quite there yet, that 97% increase has gone a long way to bring the Las Vegas real estate market back to its pre-recession levels when the median sales price per square foot of Las Vegas homes hit its high of $191 in May 2006.

Although the rate of increase has slowed in recent months, the price increase trend has been fairly steady. (Although there are seasonal dips.) To illustrate this point, I have provided a chart below of the trend from January 2012 to August 2016, and, to focus on more recent data, a chart of sales during the last year.

In the last 30 days, 2,841 homes listed on the Greater Las Vegas Association of Realtors® MLS have sold in the Las Vegas area. Today, there are 8,069 homes on the market. This means that the absorption rate (the number of months that it would take to sell all of the homes on the market at the current pace of sales) is a little under 3. As a rule of thumb, any absorption rate under 6 is considered to be a sellers’ market. When I wrote about the trend of the market in September of last year the absorption rate was 3.5. During that same period prices have increased about 6%. So, if anything, the Las Vegas real estate market has gotten a little stronger over the last year.

Another indicator of the strength of the Las Vegas real estate market is that the median days homes are on the market has dropped from 32 days in September 2015 to 22 days last month.

Although house prices are not likely to rise at the pace of the early years of the recovery when from January 2012 to January 2013 prices rose 27%, with demand remaining strong it appears likely that a generally upward trend will continue.

To some extent this trend is supported by historically low mortgage interest rates and an increase in rates may dampen demand for homes to some extent. However, since its quarter point increase in December of last year, the Fed has again and again put off its next rate increase. The Fed is set to meet again on the 20th and 21st of this month and may make a move at that time. Although, even when they make their next interest rate move, they have indicated that they expect further increases will be slow and deliberate. Interestingly, after the Fed made the move to increase rates last December, rather than increasing in tandem with the increase in short term rates, mortgage interest rates actually declined.

Another factor suggesting at an interest rate increase will not have a dramatic effect on home prices is that 20% of homes purchases in Las Vegas last month were cash. Although this is not as high as the 54% of homes purchased for cash in February 2013, it demonstrates that there are still a lot of buyers in the market who won’t feel the impact of a rate hike.

GLVAR sales since January 2012
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GLVAR sales since August 2015
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July 2014 Las Vegas Real Estate Market Trend Report

Here is a video that my assistant prepared illustrating how the market for single family homes in Las Vegas has performed since it hit bottom in January 2012. The report cover all of the properties sold through the Greater Las Vegas Association of REALTORS® MLS system, however, most neighborhoods have exhibited similar trends. If you would like information on any particular community, send me a text or email or give me a call.

Chart of Las Vegas Real Estate Prices Over the Last Year

Here is an interesting chart of the average prices of Las Vegas single family homes over the last year.

Do you think it might be time to buy while properties are still relatively inexpensive? If the trend continues they won’t be cheap for long.

The Las Vegas Real Estate Market is Changing

Because of the rapid changes in the Las Vegas real estate market, I have done a detailed analysis of what the market looks like TODAY. The changes are occurring so rapidly that by tomorrow this might be old news, but the trend is clearly in the direction of improvement. If you want to buy or sell a home in the Las Vegas Valley, particularly the area of Henderson around Seven Hills and Green Valley Ranch where I specialize, call me today and if you can’t call me today, call me tomorrow. I keep generally apprised of the Las Vegas real estate market and update my knowledge of the market in my area of specialization almost every day.

Today there are 4,300 single family residences (2,939 equity sales, 383 bank-owned, and 978 short sales) listed on the Greater Las Vegas Association of Realtors MLS as actively on the market.  In the last 30 days, 2,893 single family residences sold.
 
Over that 30 days there has been a slight increase in inventory (a few less than 200 properties). The number of bank-owned and short sale properties has remained relatively stable, so most of that increase has been attributable to additional equity sale properties entering the market replacing properties that sold.
 
Recently, I have been seeing properties moving through the market more and more quickly. Many properties are now receiving multiple offers within a few days of listing.  This is apparent not only in the lower priced properties where the buyers are often investors but also in properties over $200,000 which are more likely being purchased as personal residences.  To statistically examine just how fast properties are moving, I looked through the MLS for properties currently in escrow that had been actively on the market for 2 days or less before getting into escrow.  There are 1,478 of those!  Of those, 214 are properties that were listed for more than $200,000.
 
In the last 60 days 351 single family residence listings closed within 30 days of the listing. Fifty-eight of those closed for more than $200,000.  One of those properties was a property that sold for $2,500,000, received the offer that was accepted 2 days after being listed, and closed 3 days later!
 
Sales are occurring so fast that while I was writing this note 43 more houses showed up as closed! So right this second, the data show that 2,936 sold in the last 30 days.
 
It appears that the Las Vegas real estate market is healing.  I have not done statistical analysis of prices across the entire market, but I have in regions of my focus area and they are beginning to move up. Of the entire number of homes listed on the Las Vegas MLS that sold within the last 30 days, 59% sold for list price or more, 7% sold for 10% or more above list, and 2.5% went for 20% or more above list!
 
Given the supply and demand characteristics of the market that I have outlined above, now might be a good time to move if you have been considering buying a home in the Las Vegas area.  For sellers, it might be a good time to sell because it is clearly a sellers market.  This is particularly true if you have an equity position in your home and plan on moving up to a larger home.  Although you might be able to get a little bit more for your home down the road, by that time there will also be a corresponding increase in the price of the home you want to buy.  For example, say you have a home that you can now sell for $200,000 and you want to buy a home that is now selling for $500,000.  Next year you are able to sell your current home for $220,000. Of course during that time, the $500,000 home likely will have risen by at least the same percentage so you are now looking at buying that $500,000 home for $550,000.  You got $20,000 more for your home, but had to pay $50,000 more for the new one so you lost $30,000 by waiting.  Another thing that you might take into consideration is that more expensive homes have been increasing in price more rapidly than other homes.
 
So now is the time to sell and now is the time to buy.  If you want to sell a current home or investment property or by a new home or investment property or know anyone who does, send me an email at joani.pemberton@gmail.com or give me a call on my cell at 702-235-2869. Calling the cell is better for me, and I am available now. I can make it happen.

Interesting Times

Today there are 4,139 single family homes listed on the entire Greater Las Vegas Association of Realtors MLS that are actively on the market. That is up just little bit from the 4,113 five days ago on June 29. Bank-owned properties on the market have continued to decline during such period from 406 to 384 as have short-sales from 1,003 to 986. During that same five day period, properties that are traditional equity sale properties (properties that are neither of bank-owned properties or short-sales) on the market have increased from 2,704 to 2,769. Most of those changes can be accounted for by activity in the Las Vegas Valley (i.e. the overall the net inventory increased by 26 homes overall and by 27 homes in the Las Vegas Valley, equity sale properties increased by 65 homes overall and by 64 home in the Las Vegas Valley, bank owned-properties decreased by 22 homes overall and by 23 homes in the Las Vegas Valley, and short-sale homes decreased by 17 overall and 15 in the Las Vegas Valley).

These changes in inventory suggest that stability is returning to the residential real estate market in Las Vegas. As the inventory of bank-owned and short-sale properties has declined, people who have equity in their properties and have postponed selling are once again venturing into the market as the unprecedentedly low inventory has began to move prices up again attracting buyers into the market who wish to take advantage of the low prices before they go away.

Since May 31, there have been 3,641 sales throughout the Greater Las Vegas MLS. A rate of a little over 100 sales per day. About 47% of those sales were for cash. Apparently, a lot of investors are interested in putting money to work in the Las Vegas market. One thousand and forty-one of the sales since May 31 were of bank-owned (REO) property. Available REO inventory dropped by only about 35 homes during that period, so banks had to have put about 1,000 homes on market from their inventory of foreclosures during that period.

I know that a lot of people are still expecting a flood of “shadow inventory” to be dumped on the market. The evidence cited above, however, suggests that the banks are limiting their release of properties to the market to quantities that the market can readily absorb. Of course that filter effect may be because banks are not able to process foreclosures as rapidly as before because of AB 284, but it seems to me that the banks are wise enough to understand that if they were to dump thousands of homes on the market it would cause prices to plummet and substantially impair their capital. Bankers are first and foremost business people with fiduciary duties to their shareholders to maximize value. They probably do not want to repeat the mistakes they made that lead to the existential financial crisis of the last few years.

There is a reputed ancient Chinese curse, “May you live in interesting times.” To tell you the truth, I would rather live in interesting times than in boring ones. It is an interesting market and I am sure that there is more to come.