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 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.

Continuing Inventory Decline

I just looked at my post of March 5 when single family inventory on the Las Vegas MLS was 7,139. Since then it has gone down by over 38% and stands as I write this at 4,358. Of that 4,358, 3,910 are in the portion of the MLS that encompasses the Las Vegas Valley. In that area alone 3,100 homes, equivalent to almost 80% of the existing inventory, sold in the last 30 days! I keep hearing rumors of the backlog of foreclosed properties that the banks are going to flood the market with soon. I think the foundation of the prognostications of a large inventory overhang is illusory. Even if they do have a substantial inventory of properties, the banks are not likely to flood the market and depreciate their asset base. Hopefully if they have that imagined massive shadow inventory they will at least trickle them out. If they would just release 3,000 it would help. We need the inventory. There are multiple offers on nearly all properties and recently properties have been selling within a few days of listing at list price or greater. I have one client who has made bids on three properties, sometimes substantially above list, and yet he has been beaten out on all three. Such is life. Always challenging and always changing. Have to love it.

What You Need to Know About Developments in the Las Vegas Real Estate Market

Since I posted on March 5, the inventory of single family homes has dropped from 7,134 to 5,658. A net decline of 1,476, 20.69%, in one month! During that time 3,360 sales closed which indicates that the ratio of sales to new listings is approaching 2 to one. Moreover, there are 12,841 houses with either contingent offers or pending sale. Of course, some of those will come back onto the market, but the numbers suggest that the real estate market in Las Vegas is changing dramatically.

What is causing this change? A number of factors can be identified.

  • Homeowners who were compelled to sell or be foreclosed upon by reason of hardship by now have mostly sold or been foreclosed upon.
  • Homeowners who decided to sell or and those who “strategically defaulted” and let their homes go to foreclosure because of discouragement over the declining values of their homes have been largely been shaken out of the market.
  • Although a considerable number of homeowners remain “underwater,” owe more than their homes are worth, most of those have the resources to continue to make their mortgage payments, like where they live, and have no intention of selling.
  • A Nevada law, AB284, makes it more difficult for banks to complete the foreclosure process by requiring them to present documentation establishing that they possess an interest in the relevant indebtedness sufficient to authorize them to foreclose.
  • Investors have flocked in to take advantage of the being able to buy homes at such low prices.

Although all of these factors have contributed to the diminishing supply of homes.  There are rumors of a huge shadow inventory overhanging the real estate market that the banks are just waiting to dump when and if the foreclosure impediments of AB 284 can be surmounted.  The extent of such a shadow inventory remains subject to considerable debate and uncertainty.  The factors outlined above suggests that it may not be as ominous as some imagine.  Regardless of how large it is however, even if the banks could do so it is unimaginable that they would deluge the market with supply and devalue their assets.  Bankers likely have learned from their mistakes and are back to thinking through basic economic decisions.  If anything, AB 284 is a god send to the bankers since it prevents them from shooting themselves in the foot.

All things considered, it appears that the real estate market in Las Vegas has stabilized.  Of course, it is a fundamental principle of basic economics that if supply diminishes and demand remains stable, prices will increase.  I will have to research it, but don’t believe that there is an accelerating population outflow.  If not, housing demand should remain basically stable or increase with the natural growth of household formation.  Accordingly, if basic economics principles prevail (and the bankers are not as stupid as some think) it is likely housing prices in the Las Vegas Valley will begin to increase in the near future.  I don’t believe that in the near term those increases will be large or rapid; however, if the hoped for economic recovery materializes, price increases could accelerate. Now is a good time to buy.