Demand for houses has remained robust through the first months of the coronavirus crisis, with bidding wars on many properties, some Las Vegas area real estate agents say.
But with the tourism industry upended and unemployment at a record 28.2%, some experts are questioning how long that can continue.
“Regardless of what’s happening in the physical market, the lenders are tightening the screws and the number of qualified buyers is really, really small,” said Vivek Sah, director of the Lied Institute of Real Estate Studies at UNLV.
“I feel that the market is going to shift to a buyer’s market over a period of time,” he said.
For now, however, agents like Lucy Bouza of Signature Real Estate Group are still reporting a seller’s market.
“I keep experiencing transactions or houses that have multiple offers on them, especially in the Henderson area,” Bouza said. “Inventory is so low that there’s not enough houses to keep up with the demand right now.”
The Redfin real estate brokerage reported that 42.3% of Las Vegas-area homes had multiple offers during a four-week period ending May 10.
According to Las Vegas Realtors, there was a three-month supply of available homes in April, whereas a six-month supply is considered a balanced market.
Sah, however, said he thinks the shift toward a buyer’s market is already underway.
“People are just looking at the number of listings and saying there’s less supply and, yes, that’s correct, but what is the demand?” Sah said. “The question is who is buying?”
Las Vegas Realtors reported the sale of pre-owned homes in April dropped 31 percent from the same month in 2019. The sale of condominiums and townhouse was down 42%.
The median price of a house — $310,000 — was also down 2.8% from the previous month, while the median price of a condo or townhouse — $180,000 — was down 3%, according to the real estate group.
“We’re starting to see how this crisis is hitting our housing market,” Tom Blanchard, president of Las Vegas Realtors, said in a statement accompanying the report. “We expected sales to decline.”
Brian Gordon, a principal with the Las Vegas consulting firm Applied Analysis, said homeowners who are out of work still have some safety nets, such as expanded unemployment insurance and a moratorium on foreclosures.
But even as the economy reopens — nonessential businesses ordered closed in mid-March to curb the spread of the virus are reopening in phases — the recovery won’t be immediate.
Companies are going to look to turn profits immediately and will be measured in their rehiring, Gordon said. The healing process could take 18 to 36 months, he said.
All of that will weigh on the housing market, Sah said.
“It will be interesting to see what happens in the next few months,” he said.