Aldo Martinez
If there’s one thing hotter than the local housing market, it’s the constant conversation about what it’s doing and where it’s headed.
It’s no wonder housing has become such a hot topic here in Southern Nevada. In the past two decades, we’ve been riding a real estate roller coaster. Local home prices boomed at a record rate in the early 2000s, rising to $315,000 in 2006—only to fall faster than perhaps any place in the country during the Great Recession. Prices bottomed out at the beginning of 2012 and have been rebounding ever since.
It’s telling that it took us almost 14 years to break that home price record from June 2006. We finally passed that price in February 2020, a month before the pandemic hit our community and changed our lives forever.
So far this year, we’ve set a new record for local home prices nearly every month. According to the latest statistics from Las Vegas Realtors, the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service (MLS) during August was $405,000. That matches the all-time record set in July. Despite this one-month pause, the median home price is up 20.9% from $335,000 one year ago.
The story is similar for local condos and townhomes, which sold in August for a median price of $229,000. That’s also an all-time record and is up 23.8% from $185,000 in August 2020.
It remains to be seen whether this pause is a brief respite from our recent run of record home prices or an indication of a slowdown, as some national experts have been predicting lately.
In any case, it’s certainly true that local home prices have been rising much faster than incomes. And that’s not sustainable over the long term.
Even with mortgage interest rates near all-time lows, it’s increasingly difficult for many prospective buyers and working-class families to afford a home here. This is prompting some buyers to consider alternatives to the traditional single-family detached home and start looking at more affordable options like condominiums, townhomes, and even renting.
Probably the biggest challenge we’ve been dealing with is the lack of homes available for people to buy. The local housing supply has never been tighter.
The pandemic is certainly a factor in this ongoing housing crunch, but our available inventory was near historically low levels well before the pandemic took hold here in March of 2020.
Even though they’re building more homes this year than last year, builders are not constructing nearly enough homes to meet demand. They’ve been underbuilding for years, and it will likely take them several years to catch up—assuming they’re even able to do so anytime soon.
Homeowners are also staying in their homes longer and are slower to move than in past years.
While there’s no denying these challenges, we’re starting to see some bright spots for buyers. Besides the pause in prices, we’re finally seeing signs of more homes hitting the market. For example, August marked the seventh consecutive month when there were more properties available for sale in Southern Nevada without offers on them than during the previous month. So, at least the housing shortage isn’t getting worse.
The same thing is happening nationally. According to Fannie Mae’s National Housing Survey, the housing market is showing some signs of calming down nationwide, making home buyers more optimistic. In August, 32% of consumers said it’s a good time to buy a home. That’s up from 28% in July, according to the survey of 1,000 U.S. adults. That marks the first sign of progress in home buyer sentiment since March.
For many years, Las Vegas was an outlier among major metro areas, a city of extremes, with our population and home prices increasing faster than almost anywhere else in the country. But that hasn’t been as true in recent years—even during this pandemic. Since the pandemic started, the local market has been more in line with national trends, with a shortage of homes available for sale, strong demand and historically low mortgage interest rates leading to rising sales and record home prices.
While our median home price is now slightly higher than the national average, our rate of growth is no longer near the top of the list. As strange as it may seem to longtime locals, Las Vegas is not as strange as it used to be.
Still, my fellow Realtors and I understand it can be tough—and even discouraging—for first-time and entry-level buyers trying to find a home in today’s market.
Rest assured, our more than 16,500 members of Las Vegas Realtors are doing all we can to help people realize their dream of homeownership. We spend a lot of time these days advising our clients to be patient and persistent. In the end, most people who work with a qualified local Realtor eventually find a home.
Aldo Martinez is president of Las Vegas Realtors.