Las Vegas Market update for October 2014
The stats are out for last month and we’re getting a little bit of statistically noise, but nothing is really changing too much right now. The median home price dipped down to $199,900, or roughly 1.5%. In September the median home price was $202,000. The median price for condos and townhomes did dip 5% when compared to September. Previously it was $104,000 (approximate) and October the median was $99,000. The median is the mid-point, half the homes sold for more, while the other half sold for less.
Pricing
Pricing has been going sideways over the last few months, and I believe we have probably peaked out in terms of appreciation. There are many micro-markets inside every city however, where prices may buck the overall trajectory That said, the overall pricing trend right now is flat. I would not be surprised to see a pullback in pricing as inventory grows and interest rates eventually rise in 2015.
Activity
Sales activity slowed a bit as we moved towards the winter months. Total sales for October was 2,860 units, which is down from nearly 3,000 in September.
Inventory
Currently we’re roughly at a four month inventory. A balanced market, which works well for both buyers and sellers is generally 5-6 months. I’ll think we’ll be there early next year.
Distress sales
Distress sales as a percentage of market activity also remain unchanged. Only 10.5% of all sales in Southern Nevada were short sales, and roughly 9% were bank owned properties.
Cash sales and investors pulling back
October saw 35% of real estate deals close with cash buyers. Considering we peaked at nearly 60% cash buyers back in 2013, this is a welcome change for first time home buyers. Likewise it’s also a signal that investors have been pulling out of the market.
Time on the market
In October nearly 65% of all single family homes sold within two months. Roughly half of all condos and townhomes also sold within the same time frame.
Synopsis
Appreciation has stopped, and valuations have settled. Despite this, homes priced correctly to reflect market conditions can still sell briskly. We are approaching a balanced market, but the sellers still have the upper hand-if only for a short while longer. Cash investors are pulling back, which should give some nice breathing room for first time home buyers, and condos. If you’re a buyer looking ahead, this is all good news. Sellers should be paying close attention to market changes as we move into 2015.
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