Buyers purchased 3,284 single-family homes in Southern Nevada in August, up 4.5 percent from July and 5.9 percent from August 2016, according to the Greater Las Vegas Association of Realtors.
The median sales price in August was $260,000, the same as July, but up 10.6 percent from August a year ago.
Only 5,157 single-family homes were on the market without offers at the end of August. That’s an increase of 3.2 percent from July but down nearly a third (32.1 percent) from last August 2016, the GLVAR reported. While those prices make it sound like there is plenty of affordable product in the market, trust me, there is not. The fact is housing is in short supply both in Las Vegas and nationwide. George Ratiu, director of quantitative and commercial research for the National Association of Realtors says that while new family formation creates the need for 1.3 million homes to be built each year, home builders are only constructing only 700,000 to 800,000.
“I think the Las Vegas housing market is absolutely representative of what we’re seeing across the country,” says Ratiu. “What we’re seeing in a sense on the housing side is an imbalance of supply and demand.”
There is less than two months of inventory available according to GLVAR President David J. Tina, a number confirmed by Home Builder’s Research President Dennis Smith. who wrote in his June newsletter “We have been tracking the Las Vegas housing industry for almost 30 years and have never seen the supply of single family listings this low.” Smith believes there is only 1.7 months of inventory on the market.
And don’t think the price of new homes is coming down. Dennis Smith wrote, “Construction material and labor costs are still going up, so we fully expect the median price of all new home product types to keep rising.” And that was before Harvey and Irma.
CNBC reports, “ Another reason Houston could generate a little inflation is because it’s already facing a shortage of construction workers, and if the massive rebuilding effort attracts workers from other states, that shortage could go national, [economist Diane] Swonk said. The competition for workers could lead to higher wages.”
Swonk says there could also be a pickup in building materials sales and possibly prices, with lumber already rising because of the new U.S. tariffs on Canadian soft lumber. And local builders have told me with most PVC pipe produced in the Houston area, supplies of pipe will be crippled for months. Drywall and flooring materials will surely jump in price with intense demand from Texas, Florida and Louisiana.
Land prices in Las Vegas are also rising. Clark County just auctioned a handful of parcels for prices that remind me of boom time 2005. KB Home bought three parcels, bidding from just short of $527,000 per acre to over $593,000 per acre. The cost and price of housing is headed up. If you’ve been thinking about selling about selling or buying a home. Don’t wait. Now is the time. Call me at Simply Vegas. 702-303-8243. LW