A high demand for houses and a limited supply of sellers willing to part with their homes have driven housing prices up nationwide, with Las Vegas home prices growing at nearly double the U.S. rate.
The Standard & Poor’s/Case-Shiller home price index released Tuesday showed that Las Vegas home prices grew 20.6 percent since March of last year.
Las Vegas ranked No. 3 in growth, coming in after Phoenix, whose prices rose by 22.5 percent, and San Francisco with 22.2 percent.
U.S. home prices increased by 10.9 percent in March compared with a year ago, making it the biggest growth since April 2006.
Fifteen of the 20 cities in the report showed a gain from February to March, up from 11 in the previous month. Twelve showed double-digit annual growth.
All 20 cities in the report, which covers roughly half of U.S. homes, showed annual price increases for the third month in a row.
The slowest growth was 2.6 percent in New York, 4.8 percent in Cleveland and 6.7 percent in Boston. David Blitzer, chairman of S&P’s index committee, said in the report that these numbers were still “substantial.”
Blitzer also said trends such as housing starts and permits and sales of new and existing homes confirmed the increase in housing prices, but “the larger than usual share of multifamily housing, a large number of homes still in some stage of foreclosure and buying-to-rent by investors suggest that the housing recovery is not complete.”
The index, published the last Tuesday of each month, compares prices with those from January 2000 to create a three-month moving average with a two-month delay. The monthly numbers aren’t seasonally adjusted and may reflect the start of the spring buying season.
The high demand among people looking to purchase and the short supply of houses on the market have driven up home prices especially in the Las Vegas Valley.
Realtor Ken Blumberg of Horizon Realty Group said competition for housing in Las Vegas is keen. He described the increase in the number of buyers as a “mixed market.”
“There’s a demand from all fractions of the market,” he said. “People looking to buy a first home. People looking to buy a second home or a vacation home. There’s been a strong demand from investors.”
Blumberg said families have had difficulty buying homes because they can’t compete with cash offers from investors.
He also pointed to the lack of sellers willing to put their homes on the market as another reason for buyers’ troubles.
“Most sellers seem to be waiting, and I’m not sure if that’s because they think prices are going to go up and they think it’ll be a better sell in a year,” Blumberg said. “But I think it’s also a lot of people who aren’t paying their mortgage and are going to ride it out for as long as they can.”
Separately, the median price of a new home in Las Vegas soared nearly 20 percent in the past year, and a housing analyst said Tuesday that prices will climb even more by January.
Dennis Smith, president of Home Builders Research in Las Vegas, said in his Las Vegas Housing Market Letter that the median new-home price was $238,820 in April, a 19.2 percent jump compared with a year ago.
What’s more, the cost of raw residential land in good locations has more than doubled in the past six months, to as much as $400,000 per acre. Those higher land prices mean new-home prices could reach $250,000 by early 2014, Smith wrote in his newsletter.
Rising prices haven’t yet deterred buyers. Builders closed on 2,279 units from January through April, an 86 percent increase from 1,225 closings in the same period of last year.
Review-Journal writer Jennifer Robison contributed to this report. Contact Melissah Yang at email@example.com or 702-383-0491. Follow her @MelissahYang.