There is not a better time and place than fall in Las Vegas. Welcome to the October issue of the Monthly Minute Market Update for southern Nevada, and the coolness you’re feeling is a bit more than just our fall temperatures, as September’s surprising residential numbers caused many to take a pause.
The State Of The Las Vegas Market
New sales were down by 9.3% from August figures and slipped over 15% from September of last year, while closings were off an even greater than 21.2% from last month and 16.5% from last year, yet are only down 5.5% year-to-date.
Over the last two years, Southern Nevada experienced a significant decline in available for sale inventory, but over the last few months, we’ve welcomed an increase, and last month 9.3% more homes were available for purchase, and that figure is an almost 24% increase from this same time last year. This despite an 11.5% decrease in new listings for September, although it’s an increase of 15% from September of 2017.
A new milestone was hit in September as we once again broke through the $300,000 median price point, which was seen last 12 years ago in 2006. Based on several key factors, however, we believe this milestone to be an anomaly, and that we will likely end the year in the mid to high 290s, which would still be a respectable double-digit increase from 2017.
September’s closeout further supports the statements made in last month’s market update, that our marketplace is finding greater equilibrium between sellers and buyers, and the hyper-appreciation, excessively short days on the market and multiple offer situations are becoming descriptions of a market past. It also describes a market where your choice of real estate agent is more important than ever before. Whether buying or selling, the expertise of your Coldwell Banker Premier Realty sales professional will prove to be your best investment of the entire sales process.
2006 was a bit sobering for not only our market but the entire real estate market, because if you were living in Las Vegas then, you now know that we were entering what was to become the Great Recession, and it deeply impacted everyone in our community. While it’s important to learn from history and our personal experiences, it is also imperative to recognize the many differences between then and now.
The United States Real Estate Market
A recent article in the Wall Street Journal effectively addressed some of those differences, summarized in the subtitle as frenzied as the market has felt in recent years, it never came close to the level of the last boom by most measures. This article proceeds to identify the inconsistencies between our current slowdown and the nationwide set of circumstances behind the Great Recession, the biggest of which is an under-supply of available housing as nationally single-family housing plummeted from a peak of 1.7 million to just 430,000 in 2011. Quoting the article, this cycle is much different in part because building never really took off in this expansion, even though prices recovered in most markets.
Fortunately, our local market is a microcosm of these numbers. As new home construction, which came to a comparative standstill between the years of 2009 and 2014, has yet to come close to its 2005 and ’06 sales base of over 35,000 units, and likely never will. Combine this with the rising cost of land and the raw materials for construction, and you have a solid foundation for suggesting that home prices will likely stagnate, but not fall. Welcome news for those frustrated buyers that remain interested in home ownership yet took themselves out of the market due to its frenzied pace.
What’s New In Las Vegas?
And finally, the fundamentals of our Las Vegas economy have diversified significantly since the Great Recession as we welcome our own Vegas Golden Knights back to the ice for their second season, entertaining fans in both the state of the art City National Practice Arena in Summerlin and competing out of the amazingly experiential T-Mobile Arena. Additionally, and just next door to their practice arena, the topping off ceremony recently took place for the Las Vegas ballpark at downtown Summerlin where our own Las Vegas 51s will be the farm team for the Oakland A’s, with their season opener to be played in a few short months against the Sacramento River Cats on April 2, 2019. Wrap it all up with the breakneck speed in which Raider Stadium is being built by up to 1,200 dedicated construction workers in anticipation of substantial completion by July 31, 2020, just in time for both the NCAA and NFL seasons. The Raiders’ 30-acre practice facility located in Henderson is also scheduled to break ground by the end of this year.
Add it all up and you have billions in infrastructure investment for the continued long-term economic success of southern Nevada.
Have a safe and fun Halloween, and we’ll see you next month.