Las Vegas real estate market shows ‘unusual’ moves
After the hottest real estate year in some time, the market, as some see it, is looking a bit unusual these days.
In Las Vegas and across the country, total sales have fallen lately as once-low mortgage rates have soared. At the same time, selling prices continue to rise and homes that sell are selling fast.
Housing markets are subject to ups, downs and other changes, especially in Las Vegas, and it’s unclear how long current trends will last. But overall, it’s a jumble of market moves that I don’t recall seeing all at once before in my nearly 10 years of reporting on real estate in Southern Nevada.
Lawrence Yun, chief economist of the National Association of Realtors, highlighted the rare state of the US real estate market in a recent press release.
“The market is quite unusual as sales are falling, but listed houses are still selling fast and house prices are much higher than a year ago,” Yun said.
Frank Nothaft, chief economist at CoreLogic, told me Friday that he agreed with Yun.
“It’s a really unique market we’re in right now,” Nothaft said.
In Southern Nevada, the median sale price of previously owned single-family homes was a record $475,000 in April, up 3.3% from March and 26.7% from April 2021, according to the Las Vegas Realtors trade association, which pulls data from its resale-heavy listing service.
Amid the typically busy spring buying season, 3,001 single-family homes traded hands last month, down 8.3% from March and 14.9% from April 2021, the report reported. ‘association.
Of homes sold last month, 87.2% had been on the market for 30 days or less, compared to 82.8% in March and 81.5% in April 2021.
Overall, Nothaft said his team noticed the same factors that Las Vegas sees in “so many other places around the country.” The flow of new listings is down and availability remains “pretty thin”, but demand for homes is still strong.
Nothaft believes the number of new listings is down partly because existing homeowners, when considering selling, may have to take out a higher rate mortgage for a new home, prompting them to put their mortgages on hold. moving plans.
He also said some people who could afford to buy a home when rates were lower are now “stretched” to qualify for a mortgage or may be reluctant to pay the monthly payments.
According to Nothaft, if the same home listed today had been on the market a year ago, the monthly payment would be about 50% higher now given rising prices and higher mortgage rates.
“It’s huge,” he said.
Fueled by low borrowing costs, the Las Vegas housing market accelerated last year as prices hit historic highs virtually every month, homes sold quickly and the annual number of resales reached a record high.
Lately, however, sales totals have been dropping locally and nationally as the cheap money has gone.
The average rate on a 30-year home loan was 5.1% on Thursday, up from 5.25% last week, but still up from 2.95% a year ago, the banking giant reported. Freddie Mac mortgage financing.
Nevertheless, there is still a “core of buyers” who can afford the larger payments, Nothaft said, adding that some may leave more expensive cities such as Los Angeles or San Francisco.
Compared to those markets, “Las Vegas seems a lot more affordable,” he said, although it’s become “increasingly difficult” for current residents of southern Nevada who don’t earn as much as Californians. to buy a place here.
“For someone who is a local, he sees his accessibility really eroding,” Nothaft said.
So where will the Las Vegas market go from here?