Important things you should know
The Las Vegas housing market has been booming since the start of 2017. Prices are going up and there are more buyers in the market looking for homes compared to the last few years. According to Home Builders Research, home prices have surpassed their peak in 2007. This has led to a debate among real estate experts whether we are again in a bubble-like situation or the prices are appreciating for logical reasons.
While many economic factors are weighing down the Las Vegas housing market even today, a good equation of supply-and-demand has given it the much-awaited stability. Before we rule out the appreciating property prices as a bubble-like situation, let’s go back in time and take a look at how the Las Vegas housing market has gone through some ups and downs since the start of the millennium:
The Las Vegas housing market over the past three decades
The Las Vegas housing market was in good shape during the late 1990s. According to housing market data from that time, more than 20,000 homes were being sold annually. But the demand soared before the 2007-08 housing crisis. The number of homes sold annually in mid-2000 reached a whopping 39,000.
You have to keep in mind the fact that the home sales had skyrocketed across the United States and there was fear of housing bubble everywhere because properties were overpriced. The worst fears came true when housing markets in America crashed in 2007-08. Homes prices hit the bottom, so did the sales.
The number of homes sold in Las Vegas in 2011 plunged to 3,900. Thousands of home owners went underwater, owing lenders more than what their homes were worth. Foreclosures and real estate-owned properties flooded the market, but there were no takers even when the prices had hit the rock bottom.
After going through its worst phase, the market has rebounded over the past three years. According to real estate data from the Greater Las Vegas Association of Realtors, as many as 3,142 single homes were sold in Southern Nevada in July this year. It is up 10.8 percent from July 2016. The median sales price of such homes was $260,000, up 1 percent from June and 10.2 percent from last July.
Sales still are also climbing fast in Las Vegas, as the number of homes sold in the first six months this year is 22 percent above the same period last year.
Many real estate experts predict that home sales in Las Vegas will climb to 15,000 annually in the near future.
It is quite obvious that the Las Vegas housing market is booming, but at a healthy pace. Some challenges are still there. The biggest problem is tight inventory. New subdivisions are coming up, but a slowdown in the construction industry has resulted in fewer homes on the block.
Many developers are focusing on building bigger homes, pricing middle class families out of the market. Higher development costs and shortage of labor are among some other factors that are preventing people from buying new construction homes.
The price gap between new homes and resales is much wider in Las Vegas than the national average.
The median sales price for new homes in Clark County in June was $339,603, 48 percent higher than the median sales price of previously owned homes, according to Home Builders Research.
But these challenges are not specific to Las Vegas. There is a supply-demand “imbalance” nationally, making for an “unusual period” in the home-construction industry, according to National Association of Home Builders chief economist Robert Diet.
Prices will continue to climb over the next few years and the fear of a bubble burst seems unfounded. If you are planning to buy a home, it is probably the best time to take the plunge before prices go up higher.
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