The Las Vegas real estate market is showing some signs of slipping on the brakes after months of hectic activity.
Resale numbers have been falling over the past two months and available inventory has increased for three straight months as house prices continue to hit all-time highs. Builders have also seen a decline in sales and customer traffic during the historic spring buying season.
At the national level, too, the addiction to buying property seems to be cooling off.
“The real estate market was going 100 miles an hour and now it’s down to 80,” said Daryl Fairweather, chief economist at listing site Redfin, in a report this month.
Of course, there are still more than a few signs that the Las Vegas housing market remains in full swing, and there is no way to predict whether sales will continue to decline or inventory levels will continue to rise. Overall, sales prices are still rising, homes are still selling quickly, and the number of listings available remains low.
“What do we have, 12 days supply?” Said realtor Aldo Martinez, president of the Las Vegas Realtors trade association.
Still, real estate markets are always prone to ups and downs, and the recent frenzy won’t last forever.
Decline in sales
Driven by cheap money, buyers inundate southern Nevada homes with offers, often within days of their launch, and routinely paying more than the asking price, multiple sources said.
Overseas buyers, especially Californians, have bought more homes than usual in cheaper Las Vegas, not least because people worked from home without commuting during the pandemic.
Amid rising demand, home builders have put buyers on waiting lists, and on the resale side, buyers have been offering perks to get their bids, including the ability to let sellers stay rent-free after the deal is over to give them time to find them a new place.
When or how the buying boom will end is unclear. But apartment hunters have been pulling out recently as the series of record high prices raises concerns that some people will be priced out.
Last month, buyers bought 3,189 previously owned single-family homes, 9.6 percent fewer than in April. This month, sales fell 5.3 percent from March, according to LVR data.
The slump was a sharp reversal from March, when home sales shot up 34.7 percent from February, the association reported.
At the end of May there were 2,031 single-family homes on the market with no offers, 11.2 percent more than in April. Stocks grew by 3.1 percent month-on-month in April and 5.7 percent in March, according to LVR data.
Meanwhile, home builders reported 1,085 net sales – newly signed sales contracts less cancellations – in southern Nevada last month, 10.7 percent less than April, when sales fell 22.1 percent from March, according to figures from Home Builders Research in Las Vegas Vegas.
Customer traffic for the subdivisions in Southern Nevada fell 25 percent last month from its most recent high in March, reported Andrew Smith, president of Home Builders Research.
“Not the bursting of a bubble”
LVR’s Martinez cited the recent swings as “normal seasonal flows,” suggesting the market could regain momentum by August or September. However, he also noted that people may be doing things other than looking for accommodation, such as: B. Taking vacations, an industry that has grown dramatically recently with the introduction of coronavirus vaccines.
At the national level, the cooling of the real estate sector “is not a bursting of a bubble,” Redfin’s Fairweather said in the latest report, but “is instead a sign that consumers prefer to spend their time and money on other things than housing , now that travel, dining and entertainment “are resumed at full throttle.”
So will the Las Vegas real estate market collapse as it did after the easy money-driven bubble in the mid-2000s? Will it cool down gently to something more normal? Will it step on the brakes, accelerate and repeat for months?
Who knows?
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.
