Tuesday, April 16, 2019 / by Geoffrey Zahler
The Las Vegas Market had a great first 3 months to the year. When we consider the last part of Q4 and the first part of Q1 as our "slow" time of the year, it was nice to see our markets to continue to grow and appreciate.
As I do with all of our Quarterly updates, I pull stats for Single Family Residences ONLY; I do not take into consideration Condos or Townhomes. These are an important part of our market too, so if you're interested in these, please let me know and I can pull separate reports for you!
Median and Average Sales Price
Our Median Sales price for the first quarter ended at $300,000 for Single Family Homes. This is about a 1% increase for the Quarter, as we started the year at $297,000. While not a 'large' increase, if you annualized this, we are looking at a +4% increase. Our First Quarter in 2018 ended at $280,000, so in the last 12 months, we've actually seen a 7.1% increase in home values. Once again, the market does continue to show strength in terms of pricing. The Average Sales Price for the Quarter ended at $353,081, up from $346,824 from the beginning of the Quarter.
Inventory Levels and Homes for Sale
At the end of March, which was the end of Q1, there were 8380 homes available on the market (not under contract or sold). The number is almost flat for the quarter, with only an additional 60 homes available at the end of March as were available at the end of December. What is interesting to note, however, is that a year ago (March 2018), there were only 5613 homes for sale. This increase of 2700+ homes represents an increase of 49.3% of inventory. Quite simply, there are a lot more homes available than last year. This is a benefit to BUYERS, as we are not seeing the same situation we did last Spring where there were 14 offers on every home.
This is the statistic that just shows the amount of homes that sold during the Quarter. During the first 3 months of the year, there were 6428 homes sold that closed. This is about 1000 less homes that closed during the same period from 2018, when 7542 homes sold. When you see articles regarding home sales, it usually discusses closed homes. So when we look at this statistic, it does look like the market may be slowing. I simply say it's the velocity of sales, and that home values are still rising. The difference could also be from Sellers who decided to try and list their homes for too much money and have them sit longer. The other thing could also be that Mortgage Rates are higher now than they were during the same time period last year. Combine all these and we did see a decrease.
Months Supply of Inventory
This is my favorite chart and statistic, and you'll see me talk about this all the time. Basically, what this shows, is that if NO new homes were listed, how long it would take to sell all the properties that are currently available for sale. This shows the health of a market. The lower the number, the stronger the market is, and the closer it is to be considered a 'Seller's Market' which would put more power in the sellers hands than the buyers. The higher the number, the longer things will take to sell, and this becomes a "Buyer's Market". Historically, 6 months of Inventory is considered a NEUTRAL market. However, I've always said that the Las Vegas market is a bit different and in my mind, 4.5 months or so would be considered a Buyer's market.
We are currently at 3.2 Months of Inventory, which still would be considered a Seller's Market. This is not much of a change since the end of Q4 of 2018, which ended at 3.1 Months of Inventory. However, we've seen some changes since the beginning of 2018. At the beginning of last year, our Inventory Levels were BELOW 2 months, dipping to about 1.9 Months during January and February of 2018. We haven't see inventory levels that low since, gulp, 2006/2007.
To compare where we are now, compared to the bottom of the housing market here in Las Vegas, there was over 8 months worth of Inventory during the latter part of 2010. If you look at the run up we've had in the last year, it is a strong one, but not historically unprecedented. It looks very similar to the 2007-2008 range, but also similar to the 2013-2014 range, when prices went up. Take a look at the chart below:
In Summary, Q1 of 2019 has started strong. The number of sales is definitely something to pay attention to, and compare it to the level of inventory, but I still feel we are strongly in an increasing market that benefits sellers. However, this doesn't mean it's NOT a good time to buy either. Compared to last year, our Buyer's are seeing less competition on homes, which is good, and we are starting to see more and more offers being accepted UNDER asking price, which was unusual for 2018. Combine this with the fact that Mortgage Rates have started to lower in the last few weeks, and I do see a lot of opportunity.
I believe we will see a STRONG Quarter 2, with increased Median Home Prices, perhaps to about $306,000, and our inventory levels to remain in the low 3 month range.
If you're interested in this information, or would like more information on specific market tendencies, we have a group of videos on our YoutTube page that you can access here: https://www.youtube.com/user/ZahlerProperties
Until Next Quarter!