Nevada Real Estate Market: Trends, Analyses and Statistics
There’s likely no sector as important to the United States economy as housing. The economic growth experienced by the State of Nevada since the beginning of this year continues in the September as well. Job growth combined with low interest rates are the main factors influencing the steady growth of the housing market shifting from a recovery period to expansion. Southern Nevada is among the fastest growing metropolitan areas in the United States.
September closed with 7,427 single family units and 1,161 condos and town houses active listings; which is a little less than over the previous month. Median single family home prices reached $ 233,500 in September which was 6.1% more than compared to September 2015. Condominium/townhouse product posted the same median value as it did for the last three months: $115,000.
Although September is usually the end of the high season in regards to the residential real estate, this year it proved to be on a rising trend.
Single family homes for sale in September are moving 3.7% faster than last year, and that’s despite the pricing reaching record highs.
The total value of closings for single family units has risen to an impressive value of $ 782.0 M in September alone. For the condos and townhouses the total value of closings for the same month has slightly dropped to $76.5 M.
As expected in September we have experienced a typical seasonal slowdown, with properties spending a few more days on market (2.5 months) than in August (2.4 months); however the overall time spent on the market is still three days faster than last year at this time.
Mortgage rates could reach all-time lows
The mortgage rates are expected to reach all-time lows due to the United Kingdom’s vote to leave the European Union. Following the Brexit the treasury rates that are used as a benchmark for all mortgage rates have reached new lows. Currently the 30-year fixed-rate is at 3.6%. Even lower rates could significantly increase the demand for homes, as well as a raise in loan mortgage and refinancing requests.
In September 56.9% of the listed houses have been sold in less than 30 days; meaning an increase of 7.5% compared to last year’s figures. As homeowners are not selling and new construction remains slow the result are fewer houses for sale onto the market. Due to these factors houses are selling really fast and at high prices leaving potential sellers unable to purchase a larger house in the same neighborhood
Home-builders Have Been Slow to Respond to Demand
The rate at which homebuilders are constructing new single family homes is pretty low despite the constantly increasing demand. This summer the rate of new home construction was $1.138 million during which is almost 0.4 million less than what would be required.
Even more most of the homes that are being built are targeted for the high end of the market. Homebuilders have decided that it is more profitable to target up-scaled buyers. There decision has also been influenced by the fact that the middle class middle class is not able to get mortgages easily. As an effect of the recession most mortgage lenders are reluctant in lending to all. They are focusing only on creditworthy borrowers.
According to Jonathan Smoke, chief economist for Realtor.com
“New construction is failing to keep up with household formation, meaning that the low vacancies in rentals and the tight supply of homes for sale will continue to be a key theme for housing in the months ahead"
In a market where the supply is far from meeting the demand there are a few consequences for potential home-buyers:
- Home seller will not negotiate the prices. In order to secure a transaction you should make a quick and firm offer
- You might have to go above the asking price due to the high number of bidders
- It is best to be pre-approved by your mortgage lender as being fast is an important aspect in a hot market
State of Nevada is one of the nation’s hottest real estate markets, there are two main factors that dominate the market: the supply does not satisfy the demand and the deep rooted effects of the housing crash prevents owners from putting their homes up for sale.