Las Vegas home values aren’t appreciating like they have been in recent years, and a reversal doesn’t seem to be on the horizon.
Las Vegas ranks fourth among U.S. metro areas with the sharpest deceleration in home resale prices, according to a report released this week.
Las Vegas had a year-over-year resale deceleration of 11%, just behind three other West Coast cities — San Jose, Calif. (-26%), San Francisco (-15%) and Seattle (-13), according to the report by John Burns Real Estate Consulting.
The deceleration rate compares price appreciation today compared to a year ago. For instance, San Jose resale prices were up 20% year over year at this time last year but are now down 6% year over year, a deceleration of 26%.
In Las Vegas, the median sale price for an existing home has been hovering around $300,000 for several months after approaching that level late last year.
“We’re still flat as of the last numbers we have,” said Janet Carpenter, president of the Greater Las Vegas Association of Realtors. “There’s just not much going on. There’s not much appreciation at all, and appraisals are coming in low for the most part.”
Carpenter said people attempting to gauge their home’s value based on what a neighbor got in a sale six months ago are discovering a harsh reality. “I think people are thinking they can get the same thing. Well, no they can’t right now,” Carpenter said.
For May — and for the third consecutive month — median existing home prices in Southern Nevada were flat, according to the association. June numbers will be released later this month, but no major changes are expected.
“Traditionally speaking, we should be at the peak of our market for the year as far as activity and prices,” Carpenter said. “Historically, things start to get slower and slower about the middle of July and that continues once school starts.”
Home sales might pick up if the Fed cuts interest rates, but loans are already available for as little as 4%, Carpenter said. “I know people who hit the sweet spot several years ago and refinanced their house at 3.5%, but 4% is a good rate,” she said.
Before slowing down earlier this year, Southern Nevada home prices had been steadily rising since 2012, when the median price hit a low of just under $120,000.
“Although we’ve not gotten back to our peak median price of $315,000 from the summer of 2006, we have certainly come a long way since January 2012,” said Tim Kelly Kiernan, a real estate agent with RE/MAX Reliance Las Vegas.
But as home prices have leveled off, rental rates have not.
A quarterly report released this week by national listing platform Zillow showed Las Vegas and Phoenix with the fastest-rising rents in the country.
The median monthly rent for all types of homes in Las Vegas combined was $1,465 for the first quarter of 2019, up 6.8% year-over-year. The median monthly rent for a one-bedroom apartment was $1,025, up more than 7% from the first quarter of 2018.
“Renters are having a hard time,” Carpenter said. “Some of my agents work with potential tenants and they’ll run a property by a tenant at 10 a.m., call the property management company at 11 and ask to see it and it’s gone by 2 p.m. Nice, clean rentals are hard to find now.”