The Las Vegas Valley Housing Market: Home Prices, Sales Rising
The March 2016 figures are in, and it’s showing good things for the Las Vegas real estate market.
While the latest numbers don’t point to a dramatic improvement, they reflect a trend toward a slow and steady rise – something the market has been experiencing in the last year or so.
With the recent developments, the market is seen to be coming closer to a more balanced state than it has been in the last five years.
Here are the highlights on current market conditions:
- According to the Greater Las Vegas Association of Realtors (GLVAR), home prices in Southern Nevada (including the Las Vegas area) rose 7.3% in March 2016 from the same period last year.
- The GLVAR also reports a 3.9% increase in home sales for March 2016, compared to the same period last year.
- Local analysis firm Sales Traq reported in March that all ZIP codes in the Las Vegas Valley area showed gains in home prices.
- Also in March, Zillow reported that Las Vegas enjoyed the biggest four-year home value increase, topping other big cities in California, Arizona, Florida and Colorado.Some analysts are saying, however, that these gains are largely the result of a market correction from the very low values posted during the Great Recession, instead of an actual increase in value.
- The National Association of Home Builders/Wells Fargo builder sentiment index indicates that builders expect new home sales in 2016 to be steady. In 2015, sales of new homes went up a robust 14.5% but went down to 9.2% in January 2016.
- Despite the price increase, home prices in Las Vegas are still seen to be largely affordable and remain lower than the national average.
- Short sales (homes sold for less than their mortgage amount) went down to 5.9% of total sales in March 2016, compared to 8.3% of all total sales in March 2015.
- Bank-owned closings in March 2016 was down to 7.1% of total sales from 9.3% in March 2015.
Increasing home prices and home sales
Home prices and home sales have been increasing, a trend that has been observed in the last three years.
Lower distressed sales
Another positive development in the Las Vegas Valley housing market is the continued drop in distressed home sales.
Analysts say the decrease in distressed home sales is a sign that the market is balancing.
Lower Interest Rates
Toward the end of March 2016, a decrease in average long-term U.S. mortgage rates was reported by Freddie Mac, perhaps in preparation for the spring home buying season.
One factor that could present a speed bump to the recovery of the housing market is low inventory.
In March 2016, the GLVAR reported that the home supply for the first quarter went down to three months from four months in previous quarters, partly because of the increase in home sales.
To be considered a balanced market, housing supply should be at six months.
The low housing inventory is also seen as a factor in home price increases.
In February, however, new home construction was higher than forecasted, signifying builders’ confidence in the housing market.