Las Vegas Market Overview
August 2018 Single Family Residential (SFR) closed sales were down 2.7% from July 2018 and were basically flat compared to the same period last year. The SFR median sales price improved to $295,000 while the SFR average closing price jumped to $349,679 for a 5.2% increase from last month. Residential inventory rose sharply this month leaving the SFR market with 2 months of inventory. Unfortunately, the amount of overpriced listings soared to 54% of what is available. However, check out chart below that highlights sales by community and you will see that months of inventory runs from one month to ten months.
Communities with three (3) months or more of inventory can expect fewer multiple offers and must face the reality that buyers and sellers have parity in contract negotiations. Three to six month of inventory is considered a balanced market that does not generally favor either the buyer or seller. That could very well be the case in Seven Hills or Southern Highlands at the moment. Basically, it’s time to stop assuming that the seller has all the negotiating advantage in this market. They may or they may not!
Residential units are down 2.2% compared to this point in 2017. It’s looking more like 2016 or 2005 despite an uptick in hi-rise sales and a robust luxury market. Yet, note how both the hi-rise market segment and luxury market segment are defining their own year!
Residential Closings by Price Point
The three charts below clearly depict the shrinking inventory and closed sales for all residential homes below $250,000. The first chart illustrates how dominant sales were for properties below $250,000 and how those sales have steadily declines the past six years. The first and third charts below highlights the strong momentum for sales between $250,000 and $500,000 while the third chart shows the same thing for all sales over $500,000. If your average sales price is currently near or below $250,000 – it’s time to make serious adjustments in your prospecting and business models. Otherwise, you may find yourself working twice as hard for half the income!
Why is there so much overpricing in the current market? The chart below illustrates that the Las Vegas market has enjoyed 12.8% appreciation year to date. The housing media reports bombard the public with the Las Vegas growth and appreciation numbers. Thus everyone believes that their home has enjoyed double digit appreciation each of the past two years. It has always been and remains a fatal mistake to assume that the broad market numbers apply to my home – across the board. Not true! For example, Seven Hills had a 2017 average sales price for SFR closings of $5787,140 with that number being $591,369 for 2018. That is only a 2.5% increase in market value over last year. On the other hand, Summerlin’s average closed sales price for 2017 was $483,788, but that has improved in 2018 to $571,210 – for an 18.1% market improvement over last year. All real estate is local, so take time to find out what is going on in each community or subdivision. Do not rely upon the broad market statistics!!