Market Overview – Extended Lockdown Edition
2020 residential closings have fallen 12.1% behind 2019 as a result of the pandemic and changes in FHA underwriting! Meanwhile, SFR inventory increased to 3.7 months overall based on the market shift of supply and demand, creating an ever wider variance from community to community. But there’s really only about 1.7 months of marketable inventory because 55% of all SFR homes are listed well above what the market will bear!
The level of over pricing The SFR Over Pricing Index rose to 55% while the average days from list to close remained steady at 38 days in May. So what happened? Again, the older, seasoned, overpriced properties continued to sit without much activity, showings, or offers. Meanwhile, the newer inventory appears to have been priced to the market and went under contract almost as quickly as they come on the market. Months of inventory ranges from 2 months to 25 months, depending upon the community. Localism and even hyper-localism is everything right now.
There were 4,124 residential listings taken in May – 823 more than in April. The 8,207 available listings at this time is only slightly less than last month, while the 4,292 Pended listings reflect a 30.5% increase in open escrows. However, the 2,076 residential closings in May is a resounding 14% decrease from previous months closings. So when can we conduct Open Houses again??
The median closed sales price of an SFR rebounded from $310,000 to $315,000. Similarly, the average closed sales price of an SFR went from $361,326 to $373,974. The fact that the Las Vegas real estate market is rebounding more than the NBA will likely come as a surprise to many home buyers and even some sellers. Perhaps one of the largest challenges in May was the change in FHA underwriting that caused a number of home buyers to lose escrows due to the FICO score changes. While FHA financed closings dropped to 20% of the total closings, VA closings jumped to 16% of all closings and represented 20% of the closings in the $250-400K price range.