The GLVAR-Lied Institute Quarterly Sentiment Index for the third quarter of 2016 rose to 108.1 from its baseline value of 100.0 in the second quarter, indicating greater confidence in the health of the Las Vegas residential real estate market going forward.
That’s the key finding from a new survey conducted by UNLV’s Lied Institute for Real Estate Studies in partnership with the Greater Las Vegas Association of REALTORS® (GLVAR). It asks a select group of respondents drawn from GLVAR leaders about their expectations for home prices, sales and construction over the next quarter.
“This new survey is the result of our expanded and mutually beneficial partnership between GLVAR and the Lied Institute for Real Estate studies,” said 2016 GLVAR President Scott Beaudry, a longtime local REALTOR®. “It provides useful information for the public, our members and members of the real estate industry. The results so far this year show that our members are fairly optimistic about where the local housing market is headed. I think this is also a reflection of local home prices and sales increasing so far this year, despite a tight housing supply.”
According to Lied Institute Director Ed Coulson, the Lied Institute compiles the responses to all the questions into an index. The rise of the index signals increased positive sentiment for the third quarter of 2016.
“Respondents overwhelmingly indicated positive expectations for the next quarter,” Coulson said. “For example, 61 percent of the respondents replied that the Las Vegas real estate market would improve over the next quarter, while 39 percent thought it would stay roughly the same. No respondent thought it would get worse.”
The survey also asks about longer-term expectations over the next year. Again, Beaudry and Coulson said, optimistic sentiment prevails, with 61 percent of the REALTORS® surveyed indicating positive expectations generally, another 31 percent saying that things would stay roughly the same, and 8 percent expecting that things would get worse.
The GLVAR-Lied Institute Annual Sentiment index measuring the longer-term sentiment moved from a value of 130.6 in the second quarter of 2016 to a value of 109.7 at the beginning of the third quarter of this year.
“These numbers indicate that our local REALTORS® have a far more positive outlook for the long run versus the short, but that these longer-term expectations were dialed back a bit between the beginning of the second and third quarters,” Beaudry said.
Coulson suggested this is largely due to lowered long-term expectations about home prices not increasing as much as previously expected. In the second quarter survey, he said 77 percent of respondents thought that prices would be higher over the next year, while in the latest survey this number dropped to 58 percent. This is “probably due to the very optimistic expectations about home building over the next 12 months,” he added.
GLVAR’s most recent monthly report on the local housing market showed that the median price of existing single-family homes sold in Southern Nevada during June through its Multiple Listing Service (MLS) increased to $235,000. That was up 6.8 percent from $220,000 one year ago.
According to GLVAR, local home sales in 2016 have been running more than 8 percent ahead of the pace from 2015, when GLVAR reported 38,578 single-family home, condominium, townhome and high-rise condo sales. That was more than in 2014, but fewer sales than during each of the previous five years.
About the GLVAR
GLVAR was founded in 1947 and provides its more than 12,500 local members with education, training and political representation. The local representative of the National Association of REALTORS®, GLVAR is the largest professional organization in Southern Nevada. Each GLVAR member receives the highest level of professional training and must abide by a strict code of ethics. For more information, visit www.LasVegasRealtor.com.
About the Lied Institute for Real Estate Studies
The Lied Institute for Real Estate Studies was established in 1989 by the Lee Business School at the University of Nevada, Las Vegas to foster excellence in real estate education and research. The institute was endowed in 1991 through a generous gift and a challenge grant from the Ernest F. Lied Foundation Trust. In recent years, Southern Nevada has had the hottest and the hardest-hit residential and commercial real estate markets, creating a natural experiment for the study of business/economic practices and public-policy issues. The Lied Institute, in effective partnership with business and community leaders, strives to improve real estate business and effective public-policy practices in Southern Nevada. Visit www.unlv.edu/business/lied-institute.