Las Vegas housing market not so kind to buyers, sellers

The Las Vegas housing market is not kind to many people these days.

After last year’s buying spree, home hunters have seen a sharp rise in borrowing costs and large price increases in the past year, and have held back buying.

Sellers have increasingly lowered their prices, faced a plethora of competition and faced a shrinking group of people who can afford to buy a place.

The Southern Nevada market appears to be in a slump and there is no telling when it will break through.

“It’s impossible for people in this market to afford these homes, so something has to change,” said Nicole Bachaud, senior economist at listing site Zillow.

Bachaud, who spoke to me last week at the National Association of Real Estate Editors conference in Atlanta, said Southern Nevada was once a “very affordable area,” but that’s “not the case anymore.”

Rapid changes

Prices rose rapidly during the pandemic as the market “went very cheap very quickly,” she said. Sellers also face the prospect of a much more expensive purchase in a new place, which may convince them to sit still.

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Housing prices have been lower in Las Vegas in recent months, which helped “soften” the market, but “it doesn’t really make things more affordable,” Bachaud said.

The median sales price of previously owned single-family homes — the bulk of the market — was $450,000 last month, unchanged from August but up 10.7 percent from September 2021, according to the industry association Las Vegas Realtors. .

Prices stabilized after falling for three consecutive months, from a record high of $482,000 in May.

Buyers bought 2,030 homes in September, 36.7 percent less than in the same month last year, while 8,121 homes were for sale without an offer at the end of last month, 134.5 percent more than a year earlier, the association reports.

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With buyers pulling out, price cuts are becoming more common in Southern Nevada. According to Zillow, 42 percent of homes in Las Vegas fell in September, up from just 9.3 percent in February.

Of course, Southern Nevada is far from the only one seeing the market cool. Nationally, the pace of resale slowed in September for the eighth straight month, with sales falling nearly 24 percent from last September, the National Association of Realtors reported.

On the construction side, US builders’ confidence in the market is half the level it was six months ago, according to the National Association of Home Builders.

‘Wind from the sails’

Robert Dietz, chief economist of the builders’ association, declared a “housing recession” this summer. Last week in Atlanta, he told me he still sees it that way.

Buyer traffic for new homes has fallen to its lowest level in years, and about half of all builders now offer incentives such as price cuts or cheaper or free amenities, he said.

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Locally and nationally, increased borrowing costs are throwing cold water on the market as the Federal Reserve fights inflation with higher interest rates. The average 30-year home loan rate this week was 6.94 percent, up from 3.09 percent a year earlier, mortgage buyer Freddie Mac reported.

“Mortgage rates have risen at the fastest pace in four decades, quickly taking the wind out of its sails,” Freddie Mac chief economist Sam Khater said Friday.

The housing markets, especially Las Vegas, are subject to ups, downs and other shifts. Sales and prices will eventually take a new direction, as always.

But where are they going, and when will they change course?

We’ll know soon enough.

Contact Eli Segall at [email protected] or 702-383-0342. Follow @eli_segal on Twitter.



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