Las Vegas Market Watch Sifting Through The Numbers
Is there a recovery taking place in the Las Vegas housing market, or not? The word “recovery” is now one of those overused terms by pundits, economists, politicians, and reporters. If used to describe the overall economy, then yes the improvements are there, albeit at a much slower pace than most would like to see.
NEW HOME PRICES
In April there were 428 new home recorded sales (all product types). This brought our 2014 sum to 1,715, which is a year to year decline of 570 transactions, or 25%.
There were 24 high rise closings, which brings the April “traditional’ new home recorded sales to 404, and 1606 year to date. This is a 30% decline from what we documented in 2013 during the same period of time. So, where are the new home closings? The monthly sum has to increase based on the research of Dennis Smith who monitors the builder traffic on a weekly basis.
The median price of the April new home recorded sales was $286,506.
(Without the high rises, it was $280,000.) This is a year to year change (increase) of $47,686, or 20%.
The year over year comparison is very impressive, but in no way represents what has happened in the last 6 months, which has seen the new home median fall by $6,675, or 2%. So, although many of the press releases still report the annual changes and their double digit gains, it is more accurate to understand the most recent status of the market performance.
In January 2014, the new home median price was at $300,000. Since then, it has dropped by about $14,000, or 5%. The new home median will recoup this decline by the end of 2014. The stronger price appreciation will be near new developments that have had to engineer raw land into finished lots.
RESALE HOME PRICES
There were 2,992 recorded resale transactions in April. This brought the year to date sum in 2014 to 11,044, which is a year to year decline of 3,636 resale closings. It is a year to year decrease of 25%.
The median price of the resale closings in April was $173,000.
The median price of $173,000 is a year to year increase of $24,000, or 16%. Like the new home segment, the number of resale closings also appears to be stuck below a viable, vibrant pace in the existing home segment.
Most of the existing home prices did rise by 20-30% YEAR TO YEAR, but in the last 6 months, the monthly resale median price has only risen by roughly 5%.
The number of distressed homes on the market, and those with negative equity has declined. Relative to what it was at the peak of the recession, this certainly was expected.
According to Residential Resources, the overall supply of single family listings is now 2.7 months, and has been steadily declining since the middle of February, 2014. In a normal market there is a 6 month supply of available homes.
If you are considering a home purchase, it may be the time to buy. After sifting through all of the statistics, it is still better to buy than to rent and start building equity sooner than later. Interest rates are low and prices have stabilized.
The national economy is recovering as evidenced with lower unemployment rates. A complete recovery may be a couple of years away but interest rates may rise and your payment would be more for the same home. And when there is a complete recovery who can predicate what the home prices will be?
CURRENT LAS VEGAS STATISTICS
Here are some of the positive Las Vegas economic year to year statistics. This is an update to the 1st quarter snapshot.
- Unemployment rate is 8.9% (national unemployment rate is reported to be about 6.3%.)
- Statewide, 37 consecutive months of positive year over year job growth.
- Visitor volume is consistent at about 40,000,000. That averages about 3,333,333 per month.
- Gaming revenues were up $6.5 billion.
- The Las Vegas metropolitan area population has increased to 2,062,254.