![Las Vegas Real Estate Overview [2023]](https://ritaramirezlv.com/wp-content/uploads/2022/10/Las-Vegas-Real-Estate-Overview-2023-.png)
The sold home median price in Las Vegas rose again to $450,000 amid an affordability crisis! Here is the latest Las Vegas Real Estate Overview July 2023.
Las Vegas Real Estate Overview-July 2023.
Escalating housing prices, rising interest rates, and an increasing inventory shortage are the main factors affecting the real estate landscape in the Las Vegas area in July 2023 in a continuous of what we see during the first half of the year.
This scenario has significantly impacted the provision of affordable housing. Consequently, aspiring homeowners, especially first-time buyers, need help to fulfill their dreams of homeownership due to the absence of reasonably priced properties and affordable interest rates.
Housing Market Statistics-July 2023
The source of information for the analyses and comments is Las Vegas Realtors Association, LVR, and Matrix MLS.
Las Vegas Housing Prices
Las Vegas home prices could be more affordable. The median sales price was $450,000 for a single home, rising 2.0% compared to June 2023.
A median household in the Las Vegas metro area should have an annual median income of about $141,000 to afford to buy a single home for the sky-high median price of $450,000, reported for July 2023.
For a condo/townhome niche, the median price drops to $273,500, losing 0.5% compared to the previous month of June 2023.
From January to July 2023, the median home price has increased 5.9 % from $ 425,0000 to $450,000 but still is 6.6% below the highest median home price ever reached in Las Vegas in May 2022, $482,000.
The same analysis for the Condo/Townhome from January to July 2023 shows that the median price has increased 7.3% from $255,000 in January 2023 to $273,500 in July 2023, which is below just a 4.0% regarding the highest price ever reported in this housing category in June 2022, $285,000.
Las Vegas Units Sold
The limited inventory is evident when analyzing the units sold in July 2023. Two thousand forty-one single homes were sold in July 2023, showing a reduction of 11% regarding June 2023.
610 condo/townhomes sold; the reduction was 5.6% compared to the previous month.
The Housing Inventory Supply Needs to Grow.
Low inventory is acute in Las Vegas, explained partially by the mortgage rate lock-in effect in which current homeowners don’t want to sell, knowing they will trade a shallow interest for a significantly high mortgage interest rate.
On July 31/ 2023, 3,524 single homes and 871 condos and townhomes were available to sell, showing a reduction of 4.2% and 6.3%, respectively, compared with the previous month of June 2023. The market may absorb all single homes and condo/townhomes available in just 1.7 and 1.4 months.
Affordable Housing Shortage
Lack of inventory is significantly substantial, especially in the range of $256,000 or below, which is considered affordable for a median to low-income household in Southern Nevada-no spending more than 30% of the gross median annual income of $75,000, according to the National Associations of Realtors, NAR.
Out of 2,041 single homes sold during July 2023, just 35 single homes fell in the affordable housing range of $256,000 or below, representing scarcely 1.7 % of the market.
Cash paid for 27 homes, and conventional loans funded four units. FHA financed just two2 properties, and VA funded two homes.
Out of a total of 610 condo/townhomes sold in July 2023, 293 of them were at or below the $256,000 affordable price, which represented 42,5% of the market, and the sold terms used by buyers were: 91 cash paid for 91 condo/townhomes, conventional loans funded 114 units, FHA loans financed 32 properties, VA loans funded six units, and to transfer other six properties buyers utilized another kind of financing.
High-Interest rates
According to Freddie Mac, the average interest at the end of July 2023 for a 30-year fixed loan was 6.8%, making homeownership unaffordable for many.
How the new Las Vegas homeowners financed their purchases in July 2023?
In July 2023, cash and conventional loans remain the most favored financing options for residential real estate acquisitions, accounting for 70.5% of single-family homes and 77.5% of all condo/townhomes purchases. Compared with the previous month, transactions utilized financing through FHA loans, typically favored by first-time buyers, diminished in July 2023– with 18.4% for houses and 14.4% for condos/townhomes.
The data suggests that most buyers, capable of paying cash or securing a conventional loan, are likely individuals with significant purchasing power, out-of-state buyers, and investors.
How long does it take to sell a home in Las Vegas?
Many single homes and condos/townhomes in Las Vegas sold rapidly. In July 2023, 68.7% of all single homes sold within 0 to 30 days from the listing date. This rapid sale trend was also noticeable in the condo and townhome market, where 70.2% of the total properties were sold within the same timeframe.
Las Vegas Housing Trends
Is it a good time to buy a house in Las Vegas in 2023?
Absolutely, especially if homeownership aligns with your personal finance goals. With the ongoing inventory shortage and rising demand, housing prices might continue to see an upward trend. If you’re considering purchasing a home, doing it sooner rather than later could be beneficial. However, even if we’re seeing higher interest rates now, opportunities for refinancing may arise when rates stabilize. The most crucial factor is to ensure that buying a home is within your financial means. Always prioritize what’s best for your financial health and long-term goals.
Is it a Buyers’ or Sellers’ Market in Las Vegas?
In July 2023, the Las Vegas real estate market reaffirmed that it is a seller’s market. The absorption rate for single homes was 57.9% (2,041 units sold/ 3,524 units available for sale), and for condo/townhomes, it reached an astonishing 70.0% absorption rate.
Are Houses in Las Vegas Cheap?
Housing prices in Las Vegas are “low” when juxtaposed with our neighboring state, California, but they are not affordable, especially for median and low-income local buyers.
Since the onset of the pandemic, a persistent high demand for houses coupled with a lack of inventory has driven the median house price in Southern Nevada up to $450,000. The increase in home prices and the high-interest rates has pushed the cost of housing beyond the reach of many, causing a real affordability crisis.
Unaffordable housing is more significant for the median to low-income families. With an annual gross income of $ 75,000, a family can only reasonably afford a house priced around $256,000, significantly lower than the current median home price of $450,000. This disparity underscores the widening gap between income levels and housing affordability in the state.
Are Home Prices Dropping in Las Vegas?
A significant price drop in the Las Vegas housing market is not foreseeable, at least not immediately. This conviction is rooted in two primary factors.
Firstly, an overwhelming inventory shortage fuels a persistent demand for the scarce properties on the market, thereby sustaining a propensity for price escalation. As the year progresses and more data concerning the market’s response to ongoing construction projects becomes available, we will likely gain greater insight into this situation.
Secondly, the annual inflation rate has decelerated to 3.3% in July 2023, and the robust state of the American economy suggests it will diminish to the Fed’s target of 2% in the coming months. Far from witnessing widespread unemployment, we’re seeing an incremental rise in employment every month. This ongoing economic health supports the idea that housing prices in Las Vegas will not decline significantly.
Las Vegas Real Estate Overview-June 2023.
$440,990 is the median price for a home in Las Vegas in June 2023 amid an affordable housing shortage. Here is the latest Las Vegas real estate overview for 2023.
Escalating housing prices, rising interest rates, and an increasing shortage of inventory have characterized the real estate landscape in the Las Vegas area for the first half of 2023.
This scenario has significantly impacted the provision of [affordable housing]. Consequently, aspiring homeowners, especially first-time buyers, need help to fulfill their dreams of homeownership due to the absence of reasonably priced properties and affordable interest rates.
Housing Market Statistics-June 2023
The source of information for the analyses and comments is Las Vegas Realtors Association, LVR, and Matrix MLS.
Housing Prices
The median price was $440,990 for a single home and $ 275,000 for a condo/townhome.
From January to June 2023, the median home price has increased 3.8 % from $ 425,0000 to $440,990 but is still a 8.5 % below the higher median home price ever reached in Las Vegas on June 2022.
The same analysis for the Condo/Townhome from December 2022 to June 2023 shows that the median price has increased 7.84% from $255,000 in January 2023 to $275,000 in June 2023, which is below just a 3.51% regarding the highest price ever reported in this category in June 2022.
The small variation on the Condo/townhome prices is based on the fact that people who can not afford a single-family home are opting to buy a condo or a townhome instead.
Inventory supply is extremely low
Low inventory is acute in Las Vegas. On June 30/ 2023, 3,680 single homes and 930 condos and townhomes were available to sell, indicating that the market can absorb all properties available in just 1.6 months and 1.4 months, respectively.
Affordable Housing Shortage
The other element severely affecting the Las Vegas area housing market is that the lack of inventory is more evident in the low range of housing prices.
Out of 2,293 single homes sold during June 2023, just 34 single homes sold for $256,000 or below, which is considered affordable- no expending more than 30% of a gross median income of $75,000. Affordable housing-single homes sold represented just 1.48 % of the market.
In the niche of Condo/townhome the situation is a bit different. Out of a total 646 condo/townhome sold in June 2023, 293 of them were at or below the $256,000 affordable price. Affordable housing-condo/townhome sold participated with the 42,26 of the market.
High-Interest rates
The rising interest rates on June 2023 were moving around 6 to 7%, keeping away from the housing market many people wanting to reach [homeownership] and unable to afford it.
How buyers are funding their real estate purchases.
In June 2023, cash and conventional loans emerged as the most favored financing options for residential real estate acquisitions, accounting for 68.3% of all single-family homes and 73.4% of all condo/townhome purchases. Interestingly, less than 20% of the total transactions utilize financing through FHA loans, typically favored by first-time buyers – with 18.8% for houses and 16.5% for condos/townhomes. The data suggests that most buyers, capable of paying cash or securing a conventional loan, are likely individuals with significant purchasing power, and investors.
Las Vegas Real Estate Overview September 2022
The Las Vegas housing market is cooling off, median prices are going down, and the number of properties for sale is increasing!
The housing market data released by Las Vegas Realtors Association for September 2022 confirms that the Las Vegas housing market has continued to slow down since May 2022.
The median price for single homes sold reached its peak at $482,000 after a massive increase of 51.1% from March 2020, $319,000, when the state of emergency for the Covid 19 started.
- Median home price in September 2022: $450,000
- Higher single home median price ever, May 2022: $485,000
- The median home price decreased from May to September 2002: 7.22%
- The median home price in September is still 10.7% over the median price in September 2021.
Additionally, more sellers are willing to list their homes to get the most money possible before Las Vegas housing prices drop slightly. Then the number of properties available for sale in September has reported a significant increment rapidly and highly.
- Single homes available at the end of May 2022: 3,570
- Single homes available at the end of September 2022: 8,121
- Percentage of the increment: 127.48%
Similar results are in the residential housing market niche of condos and townhomes.
- Median condo/townhome price in September 2022: $270,000
- Higher condo/townhome median price ever, May 2022: $285,000
- The median condo /townhome price decreased from May to September 2002: 5.26%
- The median condo/townhome price in September is 17.39% over the median price in September 2021.
More people who cannot afford a single home opt to buy a condo or a townhome instead.
According to some analysts, the Las Vegas housing market is one of the most overheated nationwide.
The number of properties available for the niche of condos/townhomes is also increasing quickly.
- Condo/townhomes available at the end of May 2022: 797
- Condo Townhomes available at the end of September 2022: 1,849
- Percentage of the increment: 131.99%
Las Vegas Housing Market in September 2022
There is a clear tendency here.
- The price growth for single homes and condos/townhomes stopped rising in May 2022.
- The number of properties sold in both niches in September 2022 also has diminished since May 2022. This is the buyer’s activity.
- The number of properties listed and available to sell in both niches has increased since May 2022.
The report also shows the Las Vegas housing inventory available for sale in September would be absorbed by the real estate market in 4.0 months and 3.5 months for the condo/townhomes niche. How do we reach that conclusion?
What Is the Housing Market supply?
It indicates the speed at which a real estate market can sell a specific inventory of properties. It is a piece of information when analyzing the market’s demand.
The housing supply is the result of dividing the available inventory by the number of properties sold in the given period.
The inventory properties available to sell in southern Nevada were 8,121 properties available for sale, divided by 2,030, which is the total of properties sold in the Las Vegas housing market for the same period, obtaining a result of four months. By doing the same operation with the data for the residential niche of condo/townhomes, the result is 3.5 months= 1849/524. Those numbers are the highest since January 2019.
As we can see, there is a rise in the Las Vegas housing market supply that goes in parallel with the median price decreases and the number of properties sold compared to May’s data.
Any housing supply indicator between 4 and 6 months is considered a “normal” real estate market. With this number for September 2022, we can say that still, the Las Vegas housing market is a seller’s market.
There is another way to analyze the inventory and the number of properties sold in a given period: the ABSORPTION RATE.
Dividing the number of properties sold on September 30 by the inventory available at the end of the month, 2,030/8,121 equals a percentage of 24.99%. For the condo/townhomes niche, the result is 524/1,849 equals 28.34%.
Any amount over 25% absorption rate is typical for a seller market, and any result under 15% corresponds to a buyer market.
Potential buyers now have more properties to choose from and more time to decide because there is less competition. The sellers are even willing to cooperate with buyers offering some concessions. Buyers missed out on all these aspects during the recent heated real estate season. Now that they all are present, unfortunately, other critical factors are seriously affecting the buyers’ confidence to buy real estate.
What is Affecting the Demand in Las Vegas Housing Market
High Mortgages interest rates, high inflation, and fear of a global economic recession are affecting the Real estate market not only in southern Nevada but around the country!
The prices of things have been going up since December 2020. In June 2022, the consumer prices index, CPI for inflation, was 9.1% over the year, historically high since 1982, 40 years ago. Higher energy prices, supply disruptions, shortages of food products, and the Russia- Ukraine conflict are some culprits.
The FED is using a contractionary monetary policy to put inflation under control. They are raising interest rates so people will borrow less money, and in that way, there will be less money available to expend or to invest. The Fed expects the unemployment rate to rise to the point that helps control inflation.
According to Freddie Mac, the average mortgage interest rate for 30 year fixed loan in September 2022 was 6,11%, compared with 2.90% reported for the same month past year, which shows an increment of 110.68%. The impact of this increment in the interest rates represents an additional monthly mortgage amount of $ 191.00 that most people are unwilling to pay, affecting buyers’ affordability.
The high cost of leaving in September 2022 hits 8.2% over the year, and the shadow of a global economic recession makes most households postpone their plans to buy to see what happens the following year, and that would point to a beginning of a shift in the market: from a seller’s market to a buyers market.
In the buyer’s opinion, home prices are still too high, and the increased mortgage interest rates, compared with the rate reported last year or even at the beginning of 2022, affect their affordability.
Although Las Vegas real estate market is not immune to the effects of the current economic environment, inflation, interest rates, and fear of a recession, Southern Nevada is a desirable place to live. Las Vegas is one of the most affordable big cities to purchase a home, and the cost of living here is relatively low compared to other major metropolitan areas. The Las Vegas housing market is healthy and robust.
There are many reasons why living and investing in Las Vegas is a good choice. The Las Vegas metro area is a thriving hub of activity, with a diverse economy and plenty of opportunities for work and recreation. The city also boasts world-class entertainment, dining, shopping, and outdoor activities. Plus, it’s conveniently located just a short drive away from stunning natural landscapes like Red Rock Canyon and Lake Mead, and the desert heat allures many.
With all these factors combined, no wonder why so many people are flocking to the metro Las Vegas area to live and invest in real estate.
Uncertainty is perhaps the best word to use in defining what is happening in the Las Vegas housing market and nationwide.
What to expect in the coming months?
Taming inflation has taken longer than expected, and it seems to be a long journey, so the obvious thing to do is be vigilant and keep yourself updated on the reports for the economic indicators to see if the needle is moving in the right direction.
The high cost of living is severely affecting the buying power of families, so the best advice is for people to be very cautious about how they spend their money.
Summary September 2022
The housing market in the Las Vegas area is cooling off in a slow but steady tendency, according to the report released for LVR, Las Vegas Realtors Association, for September 2022. Prices are decreasing, and the inventory of properties available for sale is also increasing, bringing more opportunities to buyers. Unfortunately, economic factors like inflation, high-interest rates, and fear of an imminent recession make buyers hesitant to buy, if it’s not that most don’t afford to buy. Even though the complexity that the economy has brought to the real estate market nationwide, purchasing real estate is a financial decision, and the real estate market in Las Vegas valley has a lot of opportunities for prepared buyers and sellers.
