Las Vegas Market Watch - Buyers Are Buying - Sellers Are Selling!
The Las Vegas Home Market is being spurred by low interest rates, affordable housing, local job growth, new attractions, and the national rebounding economy. Here are the supporting numbers and details.
July New Home Numbers
651 New homes were recorded in July 2013.
4,264 New homes were sold YTD through July That is 69% (1736 units) better than 2012
Great jump from a year ago and after the worst recession/depression in over 20 years.
In July builders pulled 509 new home permits – for a YTD total of 4,383 – 28% (947) better than 2012.
Overall the prices have increased 20% to 30% this year. And now land prices are going up which will increase prices. The price of land is going up after it tanked 5 years ago.
Currently the median new home price is $262,265 if you eliminate the high rise sales. There may be another bump but not a jump. The new home market is normalizing.
Nationally the new home market is rebounding with major home builders optimistic about their sales growth.
New home permits are at a 5 year high. The confidence of builders is stronger than it has been since 2005.
The July Resale Home Scoop
3795 homes were recorded in July with a median price of $162,500. Last year the median price was $122,500.
Inventory levels hit lows in May and June as investors continued to take advantage of the prices. Now inventory is up over 30%.
The resale market reached a plateau.
Some were worried about another bubble. But, the market pricing is recovering from its major downturn.
There are pent up buyers and eager sellers.
It seems like the sellers and the buyers met at the top and now they are settling down.
Sellers are realizing that the increased inventory is due to higher prices. The number of cash investors has decreased as the prices increased.
The typical Las Vegas investor will continue to buy - but the flippers and the bulk investors will slow down as their return on investment (ROI) decreases with the rising prices.
If sellers want to sell they have to list close to market or their homes will not appraise for the borrowing buyers.
The profile of the market is not a bubbling one. It has the appearance of a stabilizing market. But there are still some unknowns.
Many sellers who had to Short Sell more than two years ago are coming back into the market to purchase a home. There are still many underwater. There were 492 notices of defaults in July.
More short sales will be coming on the market. The Banks were moving slowly while the prices were increasing which increased the Banks assets. It will be interesting to watch the Banks’ next move as the prices level off. Some Banks offer bulk sales of REO’s to cash investors.
Where are the rest of the REO’s? It seems the Banks’ strategy is to hold and sell slowly in order to maintain values.
- Notices Of Defaults
- Short sale inventory
- SB321 - New Nevada Law
- Land prices and sales
- Building permit numbers
- New home traffic patterns
- Resale buyers and sellers activities
- Commerical and industrial markets
- And the interest rates.
The SB321 new Nevada Law will take affect October 1, 2013. Will this law slow down foreclosures?
Most laws slow down activities while attorneys take time to understand the details.
Banks will investigate how SB321 will affect their foreclosure procedures.
This is a wait and see.
The Las Vegas Job Growth is another factor with the downtown building activities, the Strip activities, residential construction of homes, and construction of the major NW retail center.
The Genting Group will open its first resort in Las Vegas in 2016. Pictured on the left, this resort will have 3,500 hotel rooms, 175,000 SF casino, convention areas, along with retail and dining.
The Linq -will open in late 2013 with Shops and Restaurants and the 550 foot observation ferris wheel called the High Roller. This $550 million center is an example of a job creator and will bring more business to the Strip which also creates more jobs.
The overall economy grew at an annual rate of 2.5% in the second quarter.
Total construction is 5.2% higher and residential construction is up 17%.
The home market is a major factor that drives the economy and creates jobs.
Keep an eye on the interest rates.