RESALE AVAILABILITY IN LAS VEGAS REMAINS IN CHECK

RESALE AVAILABILITY IN LAS VEGAS REMAINS IN CHECK

 

THE BOTTOM LINE...Fundamentals in the southern Nevada housing market have been improving in 2014, particularly in the resale market. Resale closing prices edged up to $164,454 in April (+14.6 percent year-over-year), despite sales volumes that were below levels posted a year ago. Perhaps more insightful is the trend in resale availability. Since August of 2013, the number of available homes listed in the Multiple Listing Service (MLS) has remained in the 8,000-unit range. More important than the raw number of homes available is the effective level of inventory (the number of MLS listings divided by the number of MLS closings) - currently at 2.8 months. A closer look at availability by price range suggests an even tighter level of availability exists in certain price segments. For homes priced between $100,000 and $200,000, availability is less than 2.0 months, and for those priced from $200,000 to $250,000, availability stands at 2.3 months.  Homes priced between $250,000 and $300,000 reported availability that matches the market-wide average of 2.8 months.  Homes offered at prices exceeding $300,000 are reporting inventory levels in excess of 4.0 months. Anecdotal reports further suggest REALTORS® are struggling to find quality homes in desirable neighborhoods for qualified buyers, particularly for first time or move-up buyers. Job growth has been a key driver of demand for housing, and at the same time, the share of investor purchases has been declining. Cash sales accounted for 4 out of 10 resale closings in April, the lowest level since the height of the recession. Organic growth in housing demand (owner-occupants) provides more stability in the housing market over the long run.

NEW HOME HIGHLIGHTS

New Home Closings: New home closing volumes have been trending in a relatively tight range over the past several months. A total of 456 new construction units closed in April, which was on par with 454 reported in March. However, compared to a year ago, sales are off 29.8 percent. Year-to-date they remain down 22.6 percent.

New Home Pricing: Price points in the new home segment have moderated in recent months, reaching a median value of $285,089 in April. Despite three consecutive month-to-month declines, prices are up 19.7 percent from the same period one year ago. Average price per square foot reached $126, up 15.9 percent on the year.

New Home Supply: New home permitting volumes totaled 587 units in April, the highest level in six months. Through the first four months of the year, permitting is off 18.9 percent from the prior year; and, for the past 12 months, permits are down 5.1 percent.

EXISTING HOME HIGHLIGHTS

Existing (Resale) Home Closings: The resale market posted 3,863 closings in April, consistent with March's total of 3,837. April's tally was 13.3 percent below last year, and year-to-date resale closings are off 10.2 percent. A total of 46,004 resales closed in the last 12 months (-6.4 percent).

Existing (Resale) Home Pricing: Median pricing within the resale segment reached a new post-recession high of $164,454 (+14.6 percent year-over-year). Month-to-month price appreciation rates are slowing as a more stable balance between supply and demand has emerged.

Resale Availability (MLS Listings): The number of resale units listed in the Multiple Listing Service (MLS) was 8,549 in April, holding steady at 2.8 months of effective inventory.

Bank Foreclosures (Repossessions): Foreclosure volumes slid in April to 237 units.