To many people, Las Vegas is a place you go to stay at a casino, play poker, bar hop, eat & drink at 5-star restaurants, or simply relax in one of the many luxurious Las Vegas hotels. It is also the unfortunate place where the Las Vegas shooting occurred, shocking the world. It’s hard to think that many people call Las Vegas their home. But they do. The housing crisis affected them as well, just like everyone else in 2008. But Las Vegas NV always seems to be able to reinvent itself, thanks to a shortage of real estate supply.
During the 2008 recession, everything seemed to stop in Las Vegas. Bankruptcies were up. Foreclosures were up. People fled the city. The housing market sank. Real estate in general sank. Nothing seemed to be able to stay afloat. But ten years later, it feels as though the recession never affected anyone, including the real estate market, which is feeling pretty good right now. The Greater Las Vegas Association of Realtors® (GLVAR) reported that throughout April 2018 local home prices continued to rise alongside an increase in contracting. It’s doing so well that Las Vegas is actually experiencing a problem with shrinking supply of local homes. Look at craigslist Las Vegas, it will confirm the same. Here’s what you should know about the real estate market in Las Vegas as it is today.
Facts & Figures of the Las Vegas Market Today
According to GLVAR’s press release, the facts and figures are impressive. Some key highlights include:
- $289,00 was the median price for single-family homes in the greater Las Vegas area throughout April and according to the Multiple Listing Service (MLS). That median price is up 3.2 percent from March and up a whopping 16.1 percent from a year ago.
- $155,000 was the median price for condominiums and townhomes in the greater Las Vegas area throughout April. That price is up an astounding 19.2 percent than this same time one year ago.
- $960 million was the total for all housing real estate transactions made locally during April. Total sales volumes for homes was up 17.0 percent in April compared to the previous year at the same time.
- $117 million was the total for all condominiums and townhomes sold locally during April. Total sales volumes for condominiums and townhomes were up 25.4 percent in April compared to the previous year at the same time.
- Cash played a large part in local real estate transactions in April. In fact, according to GLVAR, 27.3 percent of all April sales were in the form of cash. But that figure is actually slightly down by .2 percent from a year ago when 27.5 percent of all local property sales were made via cash transactions.
- Distressed sales, like foreclosures and short sales, according to GLVAR, are declining. These kinds of sales accounted for only 2.5 percent of all local home sales, and that percentage is well below the 8.4 percent distressed sales accounted for all home sales this same time last year.
What’s Causing the Price Increases & Overall Good Real Estate Environment in Las Vegas?
In addition to GLVAR’s report, other facts and figures support the real estate climate in Las Vegas. The price to income ratio is at a low 2.52 while the mortgage as a percentage of income also is low at 18.57 percent. Compared to Las Vegas NV’s neighboring states, these figures are impressive. Additionally, the gross rental yield — if in the city center — is 11.11 percent while outside the city center, it is 13.14 percent. Price per square foot is $153.69 if in the city center or $115.61 is outside the city center.
The main push driving up prices is housing supply. Month to month it increasingly gets tighter. Consider this: a six-month supply of housing is considered a balanced housing market, but in Las Vegas, there’s only a month and a half of existing homes ready for sale.
By April’s end, there were 3,816 single-family units listed for sale minus any offers. Compared to a year ago — April 2017 — that 24.9 percent less single-family units for sale with no offers. In addition to simply being less housing, they are also selling faster — maybe a cause for the decrease in housing In April 2018, 86.5 percent of single-family homes and 91.5 percent of all condominiums and townhomes sold within 60 days of listing. A year ago, it was 79.0 percent and 86.4 percent respectively.
The Downside of Severely Low Supply?
The severely low supply of homes to sell in Las Vegas is certainly working to drive prices up, which is a benefit. What are the disadvantages? The National Association of Realtors® (NAR) conducted a survey and part of the results indicate that 70 percent of U.S. homeowners believe it is a good time to sell. The only problem: in Las Vegas, you cannot sell unless you have another home into which to move. That’s a problem. And it’s a problem that could spiral down for Las Vegas. You cannot sell if you cannot move into a new home that you want, and if builders cannot build fast enough to accommodate the shortage of existing homes, then there’s a problem.
The Wall Street Journal is claiming that this historic shortage of new homes could vwell be the next housing crisis. Another housing crisis is not what the world needs. It’s like a domino effect, as one goes, so goes the others in consecutively.
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