• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Nevada Business Magazine

The Decision Maker's Magazine

Subscribe Now!

  • Subscriptions
    • Print
    • Mobile App
    • Email
    • Nevada News & PR Wire
  • Features
    • New This Month
    • View Issues
    • Cover Stories
    • Feature Stories
    • Industry Focus
    • Building Nevada
    • Special Reports
    • Meet the Decision Maker
    • Press Release Wire
    • Nevada Industries
  • Departments
    • A Matter of Opinion
    • Around the State
    • Business Indicators
    • Commentary
    • Commercial RE Report
    • Crossfire
    • Expert Advice
    • Face to Face
    • Free Market Watch
    • Inside Politics
    • Power of Attorney
    • Profit & Loss
    • Speaking for Nevada
    • Tech.knowledge.me
    • The Last Word
    • Vital Signs
  • Planning Calendar
  • Advertising
    • Advertising Info
    • Advertising Staff
    • Submission Requirements
    • Online Advertising
  • Events
    • NBM Events
  • About
    • About the Magazine
    • Contact the Staff
  • Connect
    • Business Directory
    • Press Release Wire
    • Business Calendar
    • Submit Listing
    • Post Press Release
    • Add Your Event
    • Sign Up
    • Log In
You are here: Home / Features / Building Nevada / Nevada’s Residential Housing Market

Nevada’s Residential Housing Market

November 1, 2015 By Jennifer Rachel Baumer Leave a Comment

One of the first questions that comes up during a discussion of the residential housing market is whether it’s a buyer’s or a seller’s market? One of the first questions that comes up during a discussion of the residential housing market is whether it’s a buyer’s or a seller’s market – who’s got the advantage? After the housing bubble burst in 2006 and the events of the recession, Nevada’s housing market began to grow again over the last four years, with 2013 stronger than 2014, and 2015 looking a lot like 2013. Builders are building again, houses are selling and the answer to the question of buyer’s or seller’s market appears to be – neither. The other alternative is a balanced market, and Nevada might just be there.

Doing the Math

“It’s a solid market, a normal market. This is not a sexy, staggering market. Basically, the stability of the market is the story,” said David Tina, incoming president, Nevada Association of Realtors. Median price is holding steady at $220,000 in Las Vegas as opposed to the $318,000 at the peak of the inflationary bubble, and the low of $118,000 during the economic downturn, with low interest rates holding.

Inventory indicates the number of months before the current homes for sale are exhausted if sales stay the same. More than six months and it’s a buyer’s market. Less than six creates a seller’s market.

The advantage of one market over the other is relative, said Kevin Sigstad, president, Nevada Association of Realtors, depending on who’s looking at the market. “The advantage of a seller’s market is it means prices are increasing, there’s a reason for builders to build. It means we need more housing so builders are hiring people and adding inventory and more suppliers.” The disadvantage: it makes it harder for people with median range income to buy.

Sigstad sees the market as a seller’s for the last two years in Northern Nevada, with inventory below six months and occasionally below four. “There’s a real small supply of homes on the market and a really large demand, so the result of that as we’re seeing year over year price increases now for the last four years, and in the last year, from August 2014 to August 2015, there was a 16 percent increase in median price.”

“One of our biggest crises this year is overpricing. I don’t know how that happened, but sellers seem to think their houses are worth much, much more than they are,” said Tina, adding that appraisers operate based on what’s sold before, so pricing homes correctly is a challenge. “The minute the house is priced right, it sells,” said Tina, giving the example of a home in Summerlin the owner priced at $339,000. “We reduced and reduced to $299,000 and they have two offers.”

Concern Over Another Recession?

Looking at Nevada as its own, separate economy, there may not be concern of another recession. “I hesitate to say this, because all economies are all tied together, but the number of jobs and the number of industries and the growth in town is independent of, say, the Sacramento market or San Francisco market. Right now we’re on our own trajectory,” said Sigstad. With Tesla due to hire in the neighborhood of 6,200 people, and the support companies that will come in, and with Switch SUPERNAP data center under construction at Tahoe-Reno Industrial Center, the larger concern might be how to handle the necessary infrastructure growth – schools, roads, sewage capacity and the like.

The Economic Planning Indicators Committee (EPIC) report produced by the Economic Development Authority of Nevada (EDAWN) forecasts some 50,000 new jobs in Northern Nevada over the next five years, along with a similar number of new residents causing a 1.4 percent growth rate. With the current 3.8 month supply of inventory, such growth would result in a seller’s market.

In Southern Nevada, said Tina, there’s a strong middle class and buyers who want homes, by and large, are getting homes. “I don’t see prices going crazy in any factor at all.” Sales are good, but not feeding frenzy good. In Southern Nevada a little more than 26,000 homes were sold in the first eight months of 2015, 1,200 more than were sold during the same period in 2014, and median price is steadily increasing at about 10 percent over one year prior.

Three or four years ago, investors were buying up all the properties available, making it nearly impossible for the average homeowner to compete. “The regular homeowner, the person living here, working on the job, had a hard time buying property because you’d see 10, 15 contracts on a property at one single time,” said Scott Beaudry, incoming president, Greater Las Vegas Association of Realtors. “It was crazy. Put a property on the market and within two days there’d be multiple offers. We’re not seeing that now.”

Beaudry’s also not seeing homeowners putting their homes on the market. Typically new listings slow during fall, due to upcoming holidays and children in school, but with the low inventory of homes in Las Vegas, Beaudry sees the Southern Nevada market as a seller’s market.

One factor in the housing market crash was overbuilding. From the homebuilder’s standpoint, Nevada is now a healthy market. In the late ‘90s, normal building in Southern Nevada was 19,000 to 21,000 new homes annually. Today, the new normal is 7 to 8,000, said Nat Hodgson, executive director, Southern Nevada Home Builders Association. In order to have a bubble burst, there has to first be a bubble, especially given an expected in-migration of 41,000. “We’re still under-supplying what’s needed.”

New Developments

Now that Nevada’s inventory of homes available is down to three months, builders are once again building. The differences with the new development now as opposed to 2006 is the speed at which homes are coming online and the amount of “skin in the game.” There’s not a lot of standing inventory, maybe 20 percent of the homes being built in development are available for buyers who need something in two to four weeks. “We don’t’ have a lot of new home building new house inventory,” said Hodgson. “And I don’t see there being a big appetite for it, either.”

“Just the fact that builders are adding homes is a benefit to us, because the inventory is three months, so any blurp to it, any change, and we’d be out of houses,” said Tina. “The fact that our builders are building is great for the state, because we’re having a market that can be taken care of rather than a market that would be short on inventory.”

Post-recession, many cities in the U.S. Are just that. In those cities, when builders aren’t building enough new inventory to keep up with demand, there is a chance for an inflationary bubble to form, as demand outstrips supply. “Since we have inventory and new homes, I think that keeps the bubble from coming back,” said Tina. “Builders are cautiously building. They’re not building a ton of houses in inventory.”

The state of the homebuilding industry is a very slow increase, according to Hodgson. That’s a good thing, because it’s far more sustainable than a spike. “The last couple months, month over month is almost immeasurable as far as going up, so [the industry] has really hit a ceiling if you compare the same square footage house to the same type house.” Permit numbers month over month are still good, nothing outrageous, and Hodgson said he expects the market will finish 2015 8 to 9 percent over 2014, which was down a little from 2013.

Typically new home pricing is upwards of 20 percent above existing, according to Sigstad, and the new homes will not only alleviate stress on availability but drag up existing home prices as theirs rise.

Foreclosures and Short Sales

Nevada led the U.S. in foreclosures for more than 60 months straight during the downturn. Today, “The market is more traditional than it’s ever been,” said Tina. “It’s like 86, 87 percent of our inventory is traditional.”

Which doesn’t mean there aren’t foreclosures and short sales. Despite laws passed requiring banks to be responsive during short sale procedures, wait times to close can still stretch six months or longer, leaving the seller in limbo. The Mortgage Forgiveness Debt Relief Act applies to home sales through calendar year 2014.

“So there’s no guarantee they’re not going to be taxed, no guarantee when they’ll closed, and though all the laws say everyone has to cooperate – the bank, the lien holder – they don’t, so that’s why short sales sit there and sit there,” said Tina. By the time they’re ready to close, the buyer may have already walked away, unable to wait eight months to buy a house.

But there are fewer distressed houses now. During the housing market crisis, foreclosures and short sales were probably 60 to 65 percent of homes on the market, said Beaudry. Today they’re 20 to 25 percent. Financing has also changed – when investors were snapping up everything available, 50 percent of the purchases were cash. Today it’s back to regular FHA conventional financing. “The regular home buyers are back. We’ve slipped into more of a normal market,” said Beaudry.

There are still investors buying on the courthouse steps, but it’s a small number of familiar faces buying. Having the foreclosures and short stales off the market creates a stronger market, because people who sell their homes without being in a distressed situation will probably buy another property and qualify for the loan to do so.

In Northern Nevada, foreclosures and short sales account for no more than 10 percent of the market, and there’s not enough to be considered separate categories anymore. “As housing prices are advancing so rapidly, we’ve been in the 10 to 15 percent appreciation for the last four years,” said Sigstad. Fewer sales are distressed properties and more are normal, which means the market is basically self correcting, simply because it’s moving so fast.

Which is comforting, given long-held fears of a shadow inventory of bank-held properties that might be released and flood the market. When housing prices fell, there were investors who bought multiple houses and then weren’t necessarily able to flip them. “Nobody knows what that number is, but I believe there’s plenty of population here, so if they bleed them off methodically and get the right price for them, that’s still a bargain, we can absorb it,” said Hodgson. “Now if there were 20,000 of them being released tomorrow, that would really hurt us, but why on earth would anybody do that? If they’re bank-owned or investment-owned, they’re in it to make money.”

Recovery and Outlook

Owners who wanted to sell during the downturn and couldn’t find a buyer paired with people who were foreclosed on or had to short sell and couldn’t buy again created a very strong rental market. In Northern Nevada, the last two years have seen 94 to 95 percent occupancy with only approximately 5 percent of inventory available. Rents from the beginning of 2014 to the end of the year increased approximately 7 percent, said Sigstad, and only the hardest to rent properties offer any kind of incentives. Even the 2,000 rental units under construction in Northern Nevada are short what’s needed, and Sigstad expects we’ll see increases in rental prices because of the tight supply.

In Southern Nevada, there are rentals available, and owners are getting nice prices for them. “If you got $1,500 for a three bedroom in Summerlin two years ago, you could probably get $1,700 to $1,750 for it now,” said Tina.

“I think, especially in the housing market, we’re in the recovery. We have and still will continue to recover. We’re not quite there yet, but we’re in a good recovery. I don’t see a recession coming. It may be too soon to say for sure, but I don’t think the numbers are drastic enough to warrant the fear. Any kind of recovery, whether economic or the housing market, is going to have little blips here and there; it’s just part of process,” said Beaudry. “If we had a straight up huge upward swoop, then I would be more careful, but I think we’ve been steady enough we’re in good shape.”

Filed Under: Building Nevada Tagged With: David Tina, Economic Development Authority of Nevada (EDAWN), Greater Las Vegas Association of Realtors, Jennifer Rachel Baumer, Kevin Sigstad, Las Vegas business, Las Vegas commercial real estate, Las Vegas real estate, Nat Hodgson, National Association of REALTORS®, Nevada Association of Realtors, Nevada business, Nevada commercial estate, Nevada real estate, Scott Beaudry, Southern Nevada Home Builders Association, Switch SuperNAP, Tahoe Reno Industrial Center, Tesla, The Economic Planning Indicators Committee (EPIC), The Mortgage Forgiveness Debt Relief Act

Paul Krakovitz: Intermountain Healthcare

Edward Vance: EV&A Architects

Scott Arkills: Silver State Schools Credit Union

Terry Shirey: Nevada State Bank

Online Advertorials

Online Advertorials

SNWA’s Infrastructure InvestmentsHelp Secure Access to Water Supply

Bank of NevadaFunding Will Provide Nevada Students With Financial Literacy Education

Infrastructure InvestmentsAssure Our Community’s Water Future

Roseman’s College of MedicineAddressing the Physician Workforce Shortage

Advertise With Us

Advertise With Us. more details ►

Primary Sidebar

Get important updates from Nevada Business Magazine, directly to your inbox.
Subscribe

Wild at HeartEconomic Development in Rural Nevada

Industry FocusBankers

Residential NevadaMarket Shifts

Southern Nevada CCIMPassing the Torch to the Next Generation of Professionals

Nevada News & PR Wire

  • TheOfficeSquad Opens Henderson Location, Now Serves Businesses in Southeast Las Vegas Valley

  • Downtown Reno Partnership Names New Executive Director

  • Northcap Commercial Arranges Sale of Nevso Cove Apartments for $16,280,000

  • Free Social Events, Wellness Workshops and Fitness Classes at Optum Community Centers

  • Don’t Miss Kamer Zucker Abbott’s Next Webinar!

  • Nawbo Southern Nevada Now Accepting 2022 Women of Distinction Awards Nominations

  • CAMCO Nevada Promotes Bree McRae to Regional Director of its Portfolio Division

  • CSN Launches Six New Programs

  • Las Vegas Area Home Prices Dip for Second Straight Month

  • Faith Lutheran Begins 2022-23 Academic Year with New Principal

  • Grand Sierra Resort and Casino Honors a Selfless Medical Assistant as the Most Recent “Grand Hero”

  • Downtown Reno Partnership Announces New Marketing Manager and Office Manager

  • Kamer Zucker Abbott Elevates Kaitlin Paxton to Partner

  • KPS3 Hires Chelsea Bosco as Designer

  • Lipson Neilson’s Joseph Garin and Megan Thongkham Named 2022 Mountain States Super Lawyers

  • Open Enrollment for Upcoming Miss Silver State Pageant

  • Move 4 Less Recognizes Dream Home Art Contest Youth Winners with Party and Prizes

  • LumiZen Wellness Debuts Premier CBD Products for People and Pets Alike

  • Celebrate International Coworking Day at The Coop and Test Drive the Coworking Experience for Free!

  • aha! Reports Exceptional Operating Performance for July 2022

  • ioneer Signs Binding Lithium Offtake Agreement with Prime Planet Energy & Solutions

  • The Problem Solver Show to Interview Man Who Discovered Third Body in Lake Mead

  • Aug. 18 NAIOP Southern Nevada Breakfast Presents “The Future of the Las Vegas Strip Is Here”

  • Pilots Revealed for 2022 STIHL National Championship Air Races

  • Preparing for End of Life Workshop

  • Las Vegas Attorney Offers Free Workshop on Protecting Children’s Inheritance and More

  • CVMC Welcomes Lisa McKinney, APRN to Ironwood Primary Care

  • Realtor Nate Strager Releases Weekly Market Update as Part of His Information Campaign

  • Entertainment and Supper Club Summer Schedule at the Stirling Club Continues to Sizzle

  • Community Leader Don Snyder Elected Chairman of the United Way of Southern Nevada Board

  • Lexicon Bank Sponsors Scleroderma Sprint Event, Fueling Efforts For A Cure

  • Optum Care Cancer Care Adds a New Physician

  • Southwest Medical Adds Three New Healthcare Providers

  • International Celebrity Vocal Coach Romeo Johnson Offers Vocal Lessons To Clark County Residents

  • Team From The Problem Solver Show to Sponsor Free Ice Cream and T Shirt Give Away For Kids

  • Las Vegas Orthopedic Surgeon Offers New Treatment For Limb Lengthening

  • TSK Celebrates O’Brien Middle School Redesign Ribbon Cutting in Partnership With Cumming Group

  • Godspeed Capital-backed Huckabee Architects Invests in TSK Architects

  • Dunkin’ Presents $4,000 to Cure 4 The Kids Foundation From Funds Raised on Iced Coffee Day

  • Nevada Bankers Association Announces 2022-23 Board of Directors

  • Annie Wagner of KPS3 Earns Certificate in Principles of Public Relations

  • NAR Tabs Nevada REALTORS®­ Leaders to Serve in National Leadership Roles

  • Kamer Zucker Abbott Attorneys Selected to the 2022 Mountain States Super Lawyers® List

  • Kamer Zucker Abbott’s Next Webinar: Balancing Employee vs. Employer Rights in Divisive Times

  • Henderson Chamber of Commerce Announces 2022 Board of Directors Additions

  • De Castroverde Law Group and Findlay Subaru of Las Vegas Award $10,000 College Scholarship to Allison Hill

  • Karma and Luck Supports Ukraine Through Donation to Doctors Without Borders

  • Support Local Students and Teachers During the Greater Schools Supplies Drive

  • KPS3 Welcomes Lauren Davis to Team

  • Las Vegas-Based Neteffect Named a Top Firm by Clutch

  • Bank of Nevada Welcomes Michael Pizzi as Managing Director of Commercial Banking

  • Following Nevada Osha’s Adoption of Heat Guidelines, There Are Free Resources for Employers to Protect Employees From Heat-Related Illness and Injuries

  • aha! Launches 50% Off End of Summer Super Sale – Book Now!

  • Evolution of Healthcare with RESET IV

  • Mark Wiley Group Announces Buck Hujabre as New President of Commercial Division

  • Jim Seebock Announces Run for Henderson City Council Seat Ward One

  • WestCor Announces New Director of Marketing and Business Development

  • Home At Last™ by Nevada Rural Housing Launches New 4% Advantage Down Payment Assistance Option

  • Tilt-up construction is complete at Mountain West Industrial Park

  • Grow with Google Provides Nevada Small Businesses With Tools to Reach Customers in Changing Economy

  • Facebook Launches New “Feeds” Tab Connecting Users More Than Ever

  • Trosper Public Relations Announces New Hire in Northern Nevada

  • Emerald Island and Rainbow Club Casinos Partner With Local Woman-Owned Spirits Company to Offer ‘Super Premium Well’ Vodka

  • Greater Nevada Mortgage Provides Down Payment Assistance for Eligible First-Time Homebuyers

  • Education Non-Profit CORE Names Jordan Ashley Berkowitz as Development Director

  • ioneer Signs Binding Lithium Offtake Agreement with Ford

  • Two attorneys from De Castroverde Law Group honored as 2022 Mountain States Super Lawyers Rising Stars®

  • Grow With Google Provides Nevada Small Businesses With Tools to Reach Customers in Changing Economy

  • The NCJFCJ Recognizes the Honorable Linda Marie Bell As the 2022 Impact of the Year Recipient at Annual Justice Innovation Awards

  • Broadbent & Associates, Inc. Donates to Local Youth Hockey Team

  • Goodwill® of Southern Nevada Spreads Mid-Year Cheer with Second Annual ‘Christmas in July’ Event

  • CALVPresenting Sept. 21 Educational Symposium for Real Estate Pros Featuring Cyber Security Expert Frank Abagnale of “Catch Me if You Can” Fame

  • Goodwill® of Southern Nevada Promotes from Within

  • STIHL National Championship Air Races Participating in “A Community Thrives” Fundraising Initiative

  • Northcap Commercial Arranges Sale of Mark & Daisy Apartments for $3,800,000

  • MDX Labs Expands Operations to Include Saturdays, in Response to Clark County’s Elevated Level of COVID-19

  • Downtown Reno Partnership Announces Key Performance Indicators for Fiscal Year 2021-2022

  • Meruelo Family Scholarship Awards $12,500 to Children of Grand Sierra Resort Team Members

  • aha! Inaugurates Nonstop Flights From Reno-Tahoe to Santa Rosa

  • Helix Electric Raises Over $24,000 to Benefit Reno Charities

  • 20 Recent CCSD Grads Offered Apprenticeships at Tesla

  • REMSA Health announces promotion of four leaders within the organization

  • TEDx Speaker at NCET Biz Bite Luncheon in Reno

  • The National Council of Juvenile and Family Court Judges 85th Annual Conference Brings Participants to Northern Nevada From Across the Nation

  • Northcap Commercial Arranges Sale of 239 W. New York Ave Apartments for $1,015,000

  • LVR Announces Newly Elected Officers and Board Members for 2023

  • JA Worldwide Nominated for 2022 Nobel Peace Prize — Junior Achievement of Southern Nevada Celebrates Prestigious Honor —

  • aha! announces additional flying from Ontario, California to Reno-Tahoe for “Burners”

  • Optum Care Anesthesia adds two new health care providers

  • American Bar Association Appoints Lipson Neilson Shareholder Sandra D. Glazier as a Member of the Commission on Law and Aging

  • CALV President Angelina Scarcelli earns NAR leadership appointment

  • Pacific West Injury Law’s Attorney Visits Children At Sunrise Hospital As Mascot Blue Bear

  • SOUL FULL Sundays At The INDUSTRIAL

  • Serial Horse Killer Reward Goes To $10,000

  • Nevada Women’s Fund Receives $100,000 Award from SilverSummit HealthPlan

  • SILVERSUMMIT HEALTHPLAN AND COMPREHENSIVE CANCER CENTERS EXPAND PARTNERSHIP TO IMPROVE MEMBER ACCESS TO CARE

  • Yolanda Carapia of De Castroverde Law Group is awarded Nevada Justice Association Rising Star Award

  • Project 150 benefits from Game Show Boot Camp

  • Sip For Survivors – New SafeNest Coffee

  • The Downtown Vegas Alliance Elects 2022-2023 Officers and Board Members



 
Submit Your News & PR | Subscribe
Submit Your News & PR

Business Connection

Business Connection Portal

Log In Sign Up

Business Connection Portal

Log In Sign Up

Nevada Business Calendar

  • Kamer Zucker Abbott Webinar on Crossing the Line? Balancing Employee vs. Employer Rights in Divisive Times
    August 18, 2022 10:00 am

    More details...
  • Special Olympics Nevada Bowl for the Gold
    August 20, 2022 11:00 am

    Location: 1301 W Sunset Rd, Henderson, NV 89014, USA

    More details...
View Full Calendar ►

Nevada Business Directory

Featured Businesses
Find a Nevada-Based Business Submit Your Business Subscribe to the Nevada News & PR Wire

Nevada Industries

Architects & Engineers
Arts & Culture
Banking
Commercial Real Estate
Construction
Credit Unions
Economic Development
Education
Financial Management
Healthcare
Human Resources
Insurance
Law
Manufacturing
Marketing
Media
Mining
Philanthropy
Residential Real Estate
Rural Nevada
Sports
Tax Planning and Accounting
Technology
Telecom
Tourism
Transportation
Utilities

Footer

Subscriptions

  • Print Subscription
  • Mobile App
  • E-mail Subscription

Editorial

  • Features
  • Departments
  • Events

Advertising

  • Advertise
  • Submission Requirements

Connect

  • Contact
  • LinkedIn
  • Facebook
  • Twitter

Copyright © 2022, Business Link LLC dba Nevada Business Magazine and Nevada Business Journal. Privacy Policy | Terms & Conditions
Nevada Web Design services by Nevada Central Media using Genesis Framework by StudioPress

    *Your Name

    *Your Email

    Phone Number

    Company

    *Subject

    *Your Message

      *Your Name

      *Your Email

      Phone Number

      Company

      *Subject

      *Your Message

        *Your Name

        *Your Email

        Phone Number

        Company

        *Subject

        *Your Message

          *Your Name

          *Your Email

          Phone Number

          Company

          *Subject

          *Your Message

            *Your Name

            *Your Email

            Phone Number

            Company

            *Subject

            *Your Message

              *Your Name

              *Your Email

              Phone Number

              Company

              *Subject

              *Your Message

                *Your Name

                *Your Email

                Phone Number

                Company

                *Subject

                *Your Message

                  *Your Name

                  *Your Email

                  Phone Number

                  Company

                  *Subject

                  *Your Message

                    *Your Name

                    *Your Email

                    Phone Number

                    Company

                    *Subject

                    *Your Message