A report released Tuesday by Las Vegas REALTORS® (LVR) shows local home prices continuing to reach new heights while the local housing supply remains near historically low levels.
LVR (formerly known as the Greater Las Vegas Association of REALTORS®) reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during May was $385,000. That tops the all-time record set in April. May’s median home price is up 22.2% from $315,000 one year ago. The median price of local condos and townhomes sold in May was $205,000. That’s up 10.8% from $185,000 in May of 2020.
“Like the previous month, these statistics benefit from a comparison to a time last year when our housing market was hit especially hard by the pandemic,” said 2021 LVR President Aldo Martinez. “It remains to be seen how much higher these prices can go in the coming months, since we’re reaching a point where more first-time and entry-level buyers are being priced out of the market.”
Martinez pointed to reports in recent weeks of institutional investors and builders spending millions to develop single-family rental properties across the country as a glimpse into where the housing market is headed. He added that “it seems unlikely that home prices will go down anytime soon, but it seems very likely that more people will end up renting homes for the foreseeable future.”
Martinez, a longtime local REALTOR®, said the shortage of homes available for sale continues to present a challenge for potential buyers – and a rare opportunity for sellers. While a six-month supply is traditionally considered to be a balanced market, the pace of local home sales in May compared to the number of existing homes available for sale without offers equates to well under a one-month supply. Of course, he added that it has been many years since Southern Nevada had a six-month housing supply.
By the end of May, LVR reported 2,031 single-family homes listed for sale without any sort of offer. Although down 65.0% from the same time last year, Martinez noted the number of homes listed without offers actually increased for the third straight month. For condos and townhomes, the 529 properties listed without offers in May were slightly more than were listed during the previous month, though that inventory is still down 70.1% from the same time last year.
LVR reported a total of 4,100 existing local homes, condos and townhomes sold during May. Compared to the same time last year, May sales were up 87.3% for homes and up 144.9% for condos and townhomes. So far this year, local home sales are on pace to exceed last year’s total.
While more homes are selling compared to last year, he said the number of sales have started declining on a month-to-month basis.
The local housing market hit its post-recession bottom in early 2012. Since then, it has experienced steady year-over-year growth. Since the pandemic started, Martinez said the local housing market has been more in line with national trends, with home sales and prices “exceeding expectations.” He attributes much of this recent price growth to a shortage of homes available for sale, strong demand and historically low mortgage interest rates.
Compounding matters, he said research from the National Association of REALTORS® shows homeowners are staying in their homes longer and are slower to move than in past years.
Martinez added that would-be buyers should stay patient and persistent, keeping in mind that an increasing percentage of homes with multiple offers on them end up going back on the market and “are then awarded to the second, third and even fourth buyer in line.”
During May, LVR reported that 30.9% of all local property sales were purchased with cash. That’s up from 14.5% one year ago, when the housing market was reeling from the onset of the pandemic. However, that’s still well below the March 2013 cash buyer peak of 59.5%.
With eviction and foreclosure bans still in place, the number of so-called distressed sales remains near historically low levels. LVR reported that short sales and foreclosures combined accounted for just 0.7% of all existing local property sales in May. That compares to 1.5% of all sales one year ago, 2.0% of all sales two years ago, 2.6% three years ago and 6.8% four years ago. Martinez suggested that these percentages may rise slightly when government moratoriums are lifted.
These LVR statistics include activity through the end of May 2021. LVR distributes statistics each month based on data collected through its MLS, which does not necessarily account for newly constructed homes sold by local builders or homes for sale by owners. Other highlights include:
· The total value of local real estate transactions tracked through the MLS during May was more than $1.5 billion for homes and more than $209 million for condos, high-rise condos and townhomes. Compared to one year ago, total sales values in May were up 142.4% for homes and up 185.7% for condos and townhomes.
· Homes have been selling faster than they were in previous years. In May, 93.3% of all existing local homes and 89.8% of all existing local condos and townhomes sold within 60 days. That compares to one year ago, when 84.7% of all existing local homes and 79.6% of all existing local condos and townhomes sold within 60 days.
Las Vegas REALTORS® (formerly known as GLVAR) was founded in 1947 and provides its more than 15,000 local members with education, training and political representation. The local representative of the National Association of REALTORS®, LVR is the largest professional organization in Southern Nevada. Each member receives the highest level of professional training and must abide by a strict code of ethics. For more information, visit www.LasVegasRealtor.com.