Strange as it may seem during a global pandemic, 2021 was a record year for the local housing market.
With every turn of the calendar, we set a new high-water mark for existing home prices in Southern Nevada.
Brandon Roberts
We also broke another record that had stood for at least a decade. According to Las Vegas Realtors (LVR) statistics, 2021 was a record year for sales of existing homes in our area. This sales record is even more remarkable considering it came during this ongoing pandemic and at a time when local home prices have never been higher, and the housing supply has rarely, if ever, been lower.
According to LVR, the total number of existing local homes, condos and townhomes sold in Southern Nevada during 2021 was 50,010. That beat the previous record set in 2011 by nearly 2,000 sales. By comparison, LVR reported 41,155 total sales during 2020.
The year also ended with another record for local home prices. LVR reported that the median price of existing single-family homes sold through its Multiple Listing Service during December was $425,000. That was up 23.2% from $345,000 one year ago. That broke the previous record set in November.
Same story for local condos and townhomes, which sold for a median price of $242,000 in December. That also broke the all-time record set the previous month and was up 30.1% from $186,000 in December of 2020.
Few of us in the real estate industry could have predicted all of this. Going back a year or so, some experts predicted that home prices would decline during 2021. In September 2020, real estate analyst CoreLogic predicted with what it said was 70% certainty that home prices in Southern Nevada would fall by 7.8% by July 2021. Instead, prices jumped during that time by more than 14%.
Amid all the records, we also learned that our local housing market is not as unusual as it used to be. Las Vegas used to make national news for its extremes. For decades, we were typically among the national leaders for how fast our home prices soared during economic booms and how fast they fell during downturns.
Today, we’re far from the only place on a record-setting pace. Here are some of the national housing records we set last year, according to a recent report from real estate brokerage Redfin:
ν Record home prices. By late 2021, the median price for existing homes sold nationwide hit an all-time high of nearly $400,000. That was up more than 24% year over year.
ν Record-low housing supply. The supply of homes available for sale nationwide has never been tighter, largely because of a lack of new construction, surging demand, and homeowners taking advantage of historically low mortgage rates to refinance rather than sell.
• Record for how fast homes are selling. The typical U.S. home sold in both June and July of 2021 was on the market for just 15 days. That’s the lowest median number of days on market in U.S. history. That was down from a median of 39 days in June of 2020.
• Record-low mortgage rates. The average 30-year fixed mortgage rate hit 2.65% during the week ending January 7, 2021. That’s the lowest ever recorded.
• Record demand for second homes. Demand for second homes in the U.S. nearly doubled from pre-pandemic levels.
• Record sales for luxury homes. The typical luxury home in the U.S. sold for about 25% more in 2021 than during the previous year, marking record price growth. The high-end market is especially hot in Southern Nevada. In fact, 2021 set an all-time record for sales of local homes priced over $1 million—more than doubling the number of such homes sold during 2020 and tripling the number of million-dollar home sales here as recently as 2018.
I agree with national experts who predict that the local and national housing markets should start to stabilize this year following what many are calling “an unseasonably warm winter.”
With demand still high—and the housing supply still extremely low—it makes sense that local home prices are likely to keep increasing, but at a much more gradual pace than last year.
The wild card is mortgage interest rates. As experts have predicted for months, they’re finally on the rise. By the second week of January, the average rate on a 30-year mortgage had risen to an average of 3.64%.
That reduces the buying power for would-be homeowners. To put that in perspective, buyers putting a 20% down payment on a $350,000 home would see their mortgage payment go up by $125 per month compared with what it would have been just three weeks earlier.
If rates go up much more, that could slow the pace of our recently rising home prices.
I hope rates stay near historically low levels. But a slight slowdown wouldn’t be the worst thing for our local housing market.
Brandon Roberts is the 2022 president of Las Vegas Realtors and broker and founder of Signature Real Estate Group. He has worked in the real estate industry for more than 25 years.