The most accurate analysis and predictions about the Las Vegas housing market
Las Vegas housing market updates that you read in news publications or other Realtor sites are from the Realtor Association’s monthly magazine. However, this report is incomplete and often misleading.
One of the most prominent errors is using the median price of Las Vegas homes or condos, which only show market direction, with price per square foot of homes or condos. Only the price per square foot measures whether or not home prices have gained or lost. We discuss it in a blog post titled median price doesn’t measure home price gains, losses. What does?
In the past 14 years, we have witnessed the whole spectrum of Greater Las Vegas housing market activity from rocketing prices of 2003-2006, real estate crash of 2007-2011, and mind-boggling recovery of 2012-2016. Since mid-2016, we have entered a severe active listing famine.
Active listings are not under contract, and their severe shortage resulted in significant to eye-popping median price gains for homes, townhomes, and condos since January 2016.
There is no doubt that economic troubles due to COVID-19 will result in a significant rise in the number of foreclosures and short sales as we approach the end of the foreclosure moratorium.
As we wrote in the no tsunami of foreclosures in Las Vegas due to COVID-19, those who have purchased a home in Las Vegas in 2017 have 23% equity in their house. If they bought in 2006, that equity goes up to 36%. So don’t expect a tsunami of foreclosures or short sales.
Mastery of the Las Vegas housing market allows us to warn our buyers about quickly rising prices way before they happen or when a sharp downturn is underway.
Pessimistic about the Las Vegas housing market September 2020
We are well aware of the stellar sales numbers and new record prices of Las Vegas homes in July and August 2020. Yet we are pessimistic about the future of the Las Vegas real estate market in the next few months. To see why we have included about five minutes of an hour fifteen minute presentation by one of the most prominent economists in Las Vegas. In this alarming video, you will see some eye-popping statistics about how much trouble the Las Vegas economy is in at this time.
In this video, we will discuss the Las Vegas housing market for August 2020. And then will share with you some eye-popping numbers about how much trouble the Las Vegas economy is really in. You will not find this information in a regular housing market report. Read More
We have been warning about the Las Vegas real estate market since April 2020, while home sales are back to or surpassing 2019 numbers. Additionally, home prices set a new record in July and August. You might think we must be crazy. That is fair, but we are not delusional and will get to the reasons right after discussing what happened to the Las Vegas real estate market for August.
Only two factors control future home pricing in Las Vegas, supply and demand or home sales numbers and the active listing inventory.
While demand has never been in doubt, we believe that the number of listings will go up significantly in the next few months, arresting the price gains and probably leading to price cuts. Now, let’s discuss August market statistics.
Las Vegas real estate market statistics for August 2020
July 2020 homes sales have surpassed the previous year’s numbers, and August is not far behind last year.
At the end of August, we had 4639 active home listings that were not under contract. And this number is 40% less than the same time last year, and the main reason for escalating prices in challenging economic conditions.
To make the point, here is a map of the Las Vegas metro. If a buyer is looking for a 2200 to 2500 square foot single-family home, which is common in a large area bordered by Highway 215 and Summerlin Parkway, mountains, and I-95, they could only find 47 units regardless of price, lot size, number of bedrooms, and the pool. If the buyers are looking for a one-story house, only 12 will qualify.
The median price of Las Vegas homes has been escalating by $5,000 per month since June and set another record at $335,000, which is 9.8% more than January 2020. But the median price only shows the market direction in lower price ranges.
The real measure of whether or not home prices have gone up or down is the price per square foot of all homes sold. In August, the price per square foot of single-family houses stands at $183 per square foot, for about a 4% price appreciation since June 2020 and 6.4% since January. So, a $200,000 home in January is selling for about $213,000 by September. 9.8% median price gain since January is meaningless.
The months of active listing inventory controls home pricing
This chart shows the months of inventory, which is calculated by dividing the number of active listings by sales numbers. The months of listing inventory for Las Vegas homes dipped to less than 2.2 months starting February 2020, save April and May, due to the lockdown. The months of listing inventory for August is at 1.6 months, which should lead to mid-double-digit real home price gains in a year, but in a normal market.
In our previous video Irrational Exuberance about Las Vegas Housing Market, we explained that the months of listing inventory live in isolation and is only affected by the active listings and sales numbers. However, the number of active home listings and sales numbers are susceptible to economic conditions. In bad economic conditions, the number of for-sale listings would go up appreciably, stopping price gains and, in some cases, leading to price cuts.
Why we are not optimistic about the Las Vegas housing market in the next few months
Now, let’s discuss why we are pessimistic about the Las Vegas housing market despite the great sales numbers and record prices.
Masoud insists on saying this one line! How is this possible?
We have been following the news about the Las Vegas economy. But a presentation by Mr. Jeremy Aguero, one of the most prominent economists here, put it all together neatly in an hour and fifteen-minute presentation. You will not see these statistics in a Las Vegas real estate market video. We will play about five minutes of it here, which is named pause.
Pausing the US Economy to get to the other side of COVID-19 crisis
The pause was to allow us to say we are going to put the United States government on pause for a moment and we’re going to get past the Covid-19 crisis and then the economy is going to go back up and it’s not a bad idea.
It’s exactly what we should have been doing as a country. The problem is it may not be enough to get us over this Covid-19 crisis, particularly if a second wave starts to pop up as schools and universities and things like that start to open. And it matters to us, because how are households using these stimulus payments today, right, this just shows, this just shows the percentage.
Three out of every four households are using that stimulus money to pay household expenses. There’s some that are saving it, there are some that are paying down debt, but the vast majority are using it for food, for utilities and for household supplies. So imagine what happens if that doesn’t exist.
In our state, the state of Nevada has received almost 19 billion dollars in stimulus finding, 19 billion dollars overall in stimulus funding, and that is a huge amount of money to pour in to our economy overall. And how is Nevada households using that money? 77% of them are using it for food and utilities and household supplies. So although the some of us may have some savings and maybe even didn’t get a stimulus payment, or maybe used it for another person those folks down there at the bottom that are saying they are using it for recreation, marginally irresponsible, by the way, but using it for recreation, this is what we have to understand.
We are a state of three million people, or a community of two point seven million people and there are a lot of people who are paycheck to paycheck depending of unemployment insurance or stimulus payment overall.
Funds used by Nevada households in the past seven days to meet spending needs. Regular income number one thanks goodness, it is on the top. But look at this stimulus payments are twenty one percent. Just to meet spending has been used by on out of every four households. Using unemployment insurance to make those payments. If we look at Unemployment compensation as a percentage of wages and salaries just to show you how important that unemployment insurance is to us, it is higher than any point in United States history. And we are burning through our unemployment trust fund at the fastest rate we ever have in the State of Nevada.
Alarming statistics about Las Vegas economy and how it can effect on the Las Vegas housing market
And why it all matters, here is a few things that I believe this group might find particularly interesting. Here is those who made their rental payment that is eighty two percent. But eighteen percent of households indicated that they did not make rental payments. And when asked about the next rental payment forty one percent of households in the state of Nevada indicated that they have little or no confidence about their ability to make that rental payment next month.
And among those, those minority groups, some of those who are most at risk. Overall households with children are at the highest level overall. Again, why it matters further. What about those who indicated that they didn’t make a mortgage payment last month. Twenty two percent of homeowners indicated that they didn’t make it. And I know you all are monitoring what has been sold and what has been listed and we have seen what I think is unexpected stability in the market and I think it is for a number of different reasons.
I think Cos made some comments that have been absolutely on point relative to all of this. But the underbelly what we are seeing remember there was a time we were thinking huh how are can we be building all of these housing units how are people taking out all these home equity and taking vacations and buying these boats and doing all these kind of things. How is this possible, right, I think we are looking at it now and many of us are thinking how is this possible? And I think we need to make sure that, look if the virus sort of recovers and we get through that and we get passed it then it is going to be largely a non-issue. But if it extends for a longer period of time than it is something we need to be concerned about.
Nevadans reporting food insufficiency sometimes or often in the past seven days, three hundred thousand people almost twice as much a before the pandemic. And this the one that scares me more than anything else. Those reporting that they delayed getting some of medical care over the past four weeks as the result of either fear or they were asked to stay home is almost thirty eight percent of our population? I know we delayed things like elective surgery but elective surgery becomes emergent surgery when it isn’t there. And all of the sudden we see a large reduction in heart attacks and strokes, no we are not. People just don’t start going to get help for it. Right, this is a big concern for our community overall.
That Nevada Paycheck protection program, I will not going to spend a lot of time here. Other than to say it is keeping our small businesses afloat today in the state of Nevada. If we look at the summery of the loans that existed and the number of jobs it covered in Nevada alone as the result of that program they are massive numbers of those. And we ask rent or mortgage relief owners or business owners again in the same survey we talked to you about. Are you paying your full rent? Seventeen point one percent of businesses in the state of Nevada said I am not making my rent payment today. This is hugely problematic. For those with a mortgage one out of ten are saying I did not pay mortgage payment today. Obviously this is not sustainable. Because that stimulus that is buoying or economy is going to run out. And if it runs out before we get to to the other side of Coronavirus we are going to have a big problem in the State of Nevada.
Current economic conditions
These are genuinely alarming numbers. Let’s translate the problem that renters are in from percentages.
According to a recent report by the Guinn Center, a local nonprofit, bipartisan research and policy analysis group. Some 118,000 to 142,000 Nevada households are at the risk of eviction this fall. That’s the equivalent of 272,000 to 327,000 people.
The stimulus ran out in the third week of July, and so far, the only stimulus that has passed is three to six weeks of $300 per week unemployment stimulus. Things are so bad that the president and Nevada governor have extended the moratorium of evections to avoid a mess eviction. But eviction in Las Vegas is judicial, and a judge has to sign the eviction order. There are not enough judges to process thousands of potential eviction orders promptly.
We do not care about multibillion-dollar companies that own thousands of homes in Las Vegas Metro. But many of these rental units are owned by small investors like many of our investor clients. They use the rental income to pay their mortgage and help family finances. The eviction moratorium has hurt our investors badly since they are responsible for all of the property expenses since they have lost a significant percentage of their revenue since April. Some of these investors will list their units, thus growing the number of active listings.
Additionally, we have started to see retail vacancies in some highly sought locations in the metro. Other businesses are hanging on for their life and will be out of business in the following months. Many of these business owners are homeowners and have to find a job in unfavorable economic conditions and pay the mortgage again when the mortgage forbearance runs out. Many will list their home.
The future of the Las Vegas housing market
The argument over the future of the Las Vegas housing market revolves around how much the active listing will increase in the following months. We believe there will be a significant spike in the number of listings as we get closer to the end of the foreclosure moratorium, reversing the price hicks and leading to price cuts.
Lastly, just yesterday we learned that the problem solvers caucus in Congress are publicizing their plan for additional stimulus which can affect what will happen in the future months. We wish all the best but think that much damage is already done.
CoreLogic, which is the tech company that provides our Las Vegas MLS has predicted that home prices in Las Vegas will come down by about 7.3% in the next twelve months, and we concur.
Now you know why we are pessimistic about the future of the Las Vegas housing market despite the recent record prices.
If you are in the market to buy a home or condo, wait for better pricing. If you -plan to sell your home or condo, this is probably going to be the best time in the next couple of years. Call us at 702-478-7800 to start the process.
Now you know why we are pessimistic about the future of the Las Vegas housing market despite the recent record prices.
If you liked this video, please like and share. You can subscribe to receive future videos on our YouTube channel, LasVegas4us. This is Karen Saberzadeh with The Saber Team wishing you a great day.
July 2020 Las Vegas housing market
In this video, we discuss the Las Vegas real estate market statistics for July 2020. The impact of COVID-19 on home prices has been minimal so far, and why it shouldn’t be. The mortgage forbearance and eviction moratorium, in addition to unemployment stimulus, are masking the economic troubles.
We will talk about why news headlines about home prices set a record in June are dead wrong. While there is no danger of a tsunami of foreclosures for more than a year, what is the short term threat to home pricing and home? And lastly, what should homebuyers and sellers do now.
Las Vegas real estate market seven weeks after Coronavirus
Las Vegas housing market was on the way to near double-digit appreciation. And then COVID-19 invaded Nevada. We will show how Coronavirus has negatively affected the market. And what Las Vegas home buyers and sellers need to do in this market to protect their interest. Even though the sales numbers weren’t bad in March, it cooled down significantly in April.
In this video, we will show you what happened and, more importantly, what buyers and sellers should do in this market to protect their interest.
Prediction & overview of Las Vegas real estate market 2018, video:
In Prediction & overview of Las Vegas real estate market 2018, video we talk about how the shortage of active listing inventories for homes, condos, and townhomes has gotten worse over time, leading to double-digit increases in their median prices. When it comes to Las Vegas condos for sale, the median price gain of 34.9% is beyond belief.
In this blog post, we make a prediction on what will happen to Las Vegas housing market in 2018.
Overview of Las Vegas high-rise condo market in 2018, video:
In the overview of Las Vegas high-rise condo market in 2018, video we will show that even though the median price of high-rise condos has rebounded from the significant $44,000 drop in median price of 2016 to finish 2017 at $340,000, the main reason for the rebound is the big reduction in the active listing inventory and not increasing sales or the Raiders moving here.
It should be mentioned that the median price of Las Vegas high rise condos at the end of 2017 is only 3% higher than the same in 2014, but should go up by more than 5% in 2018.
Rocketing prices in a strange Las Vegas real estate market-Video: While the number of home and condo listings in the late spring should rise appreciably from January, the exact opposite has happened this year and active listings have dropped by 35%-50% since then. At the same time demand has gone up significantly. We explain how long we expect these price hikes that are based on an abnormal market to go on because at least when single-family homes are concerned, affordability becomes an issue.
Buying Las Vegas homes in July could cost 10% more than now-video: In this video, we warned buyers that waiting to buy a home that is priced below the FHA loan limit in July 2017 will cost at least 10% more than January and advised them to buy before March.
We not only talked about when price appreciation will come but by how much. Our prediction was right and if someone gets an offer accepted at 10% higher than 2016 for a house that is priced less than $287,500 they have done well.
Overview of Las Vegas real estate market in 2017-Video: We were the first and only to predict at least a 10% price gain for less expensive homes, condos, and townhomes. We did this video in December when we thought that we would get more active listings inventory that not only didn’t come, they were significantly reduced by summer while demand escalated.
We also discuss why median price gains do not apply to all price ranges equally. The days on the market before going under contract for luxury homes is 3-4 times that of cheaper homes, and competition among buyers is not as intense. So it is a great mistake to raise the price of a luxury home by the same percentage as the median price gain. Listing agents who raise asking list price by the same amount as median price gain fail to sell their listings due to incorrect asking list price because they have ignored this fact.
GLVAR doesn’t publish any high-rise condo market updates so ours is unique to this site and can’t be found anywhere else.
Overview of Las Vegas high-rise condo market in 2017-Video: The only formal high-rise condo market report available online. We take a look at the median price of all units sold in high rise condo towers since the recovery of 2011. Contrary to what you read in news articles and other Realtor sites, we prove that our high rise condo market is a buyer’s market.
In the subsequent video, we look at the median price of all units sold in each individual tower since recovery and margins are wide, from 76.2% median price appreciation for Metropolis, to 11.3% for a couple of condo hotels.
How is the market affecting buyers and sellers-Video? In this, we talk about how the low inventory of active listings and escalating prices that are affecting buyers and sellers. If you plan to buy or sell, watch this video.
Las Vegas housing will not see any price gains for now-video: in this video, we show that median prices of single-family homes escalate in February through July and stay flat and even going down a bit in late November or December before escalating in February again.
- April 2016
- February 2016
- Overview of Las Vegas housing market- homes 2016
- February 2015
- January 2015
For older posts please click the blog category, you will find all of our Las Vegas housing market reports there.