As I thought, our housing market is transitioning into a buyers market from a strong sellers market. Our average sales price has dropped the past 2 months and is now down to $450,000.00 from a high in May of $482,000.00. Just in the past 3 months we have seen a $32,000.00 drop in the average sales price of homes here in the Las Vegas Valley.
Inventory in May was at 3,570 for single family homes with an average of 1.2 months supply of homes. May was the highest point in the sales price. In August, the inventory was at a 4 month supply with 7,997 single family homes available for sale. Our inventory doubled within a 3 month time frame. What does all of this mean? First off, as we continue to see pricing adjust to supply and demand, we will see the buyers that were side tracked by higher interest rates start coming back into the market now that they are able to afford a home based on higher interest rates. I still believe that pricing will continue to drop but it’s unknown how much more the average sales price will drop. Our inventory and supply of homes is still below the average for a strong buyers market which is usually 10,000 to 12,000 single family homes.
I think in the next few months we will see that it will be a good time to be a buyer in the Las Vegas Housing Market. Pricing may continue to drop until the end of the year and into January or February at the latest. Usually, the real estate market is slow from the end of November to the middle of January due to the holidays, school is out for kids, people are traveling and also weather is a strong factor as well reducing traveling to Las Vegas from other parts of the country. This also means that you may not see more new inventory hit the MLS until the end of January and the beginning of February. If this happens, there will be some deals out there to grab during this time period from now until the end of January/February.
These are the reports I used to compare my data:
I also believe that we will see some great opportunities with homes builders as well in Las Vegas. They may start taking offers on homes that are in their inventory or that may have fallen out of escrow. I would not get into a builders contract if it is more than 3 months to deliver a home. Home builders will hold you to paying the difference in the contracted value vs. the appraised value. If pricing falls during your contract period, you may be on the hook to come up with that difference in vale. Please keep that in mind.
Can I guarantee everything I just said above? No I cannot. I can use the data I have attached to this email which is what I am basing my opinion on and what is to possible outcome to our housing market. If we see economic conditions worsen, then the market will continue to go down in pricing and that may discourage some buyers to not buy a home. The other problem we are seeing is that rentals are still out of control with their pricing. This is a huge factor as well for The Las Vegas Housing Market. Would you rather pay $3,000.00+ a month for a 2 bedroom 1,200 square foot apartment or would you rather pay $2,500.00 a month on a 1,800+ square foot home for $450,000.00 and get the tax benefits as well from home ownership? This is why I believe our housing market continues to make more sense than renting a home now.
In closing, it’s my opinion that the time to buy will be from now until January/February.
Why? It’s my opinion that we will see buyers that got kicked out of the May 2022 peak of the market and they will start coming back into the market. Once those buyers come back in, the inventory once again will be bought up. This will cause us to have another limited supply of homes again by the Spring of 2023. Pricing could rise again or it could flat line out if interest rates continue to rise.
If you have any questions about the Las Vegas Housing Market, please contact me anytime. Let’s have a conversation about your home purchasing options.