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Las Vegas bucks national trend in this real estate metric

Updated November 28, 2023 - 12:21 pm

The Las Vegas Valley is one of only three metro areas in the country that has seen a rise in pending home sales year over year, according to new data from Redfin.

Las Vegas, at 1.2 percent, along with San Jose, Calif., (14.2) and Columbus, Ohio, (4.2) are the only three metros that have posted a year-over-year increase for pending sales as of Nov. 22, according to Redfin. Pending home sales are the total number of homes currently under contract, which means the seller has accepted an offer from a buyer but the sale hasn’t closed. This figure doesn’t include homes that have been on the market for more than 90 days.

Tim Kelly Kiernan, branch manager for Realty One Group, said pending home sales can be a predictor of future closings, and agents usually pay close attention to the Pending Home Sales Index, which is a National Association of Realtors statistical model. The PHSI showed a 1.1 percent increase nationally at the end of October month over month, which could signal an uptick in sales nationally after a slow year.

“A home for sale becomes a listing on the Multiple Listings Service system, then becomes a ‘pending sale’ when the contract has been signed but the transaction has not closed yet,” Kiernan said. “The transaction is still in the ‘escrow process’ and is going through the typical steps of inspections, appraisal, mortgage qualification, and approval and potential repairs. The sale is usually finalized and closed within 30 to 60 days of the contract being completed.”

Kiernan said from October 2022 to October 2023, the inventory of new listings of homes for sale has increased by a quarter, but even with that increase, the number of homes on the market is still down roughly 40 percent.

Sheharyar Bokhari, a senior economist with Redfin, said pending home sales can be a leading indicator of how closed home sales will trend.

“It is important to note, though, that not all homes that go under contract may necessarily end up closing. That can happen for example if the buyer has problems with securing financing in times of rapid increases in mortgage rates in which case they may back out. In general, an uptick in pending sales year over year implies that there will be more closed homes sales this year than the same time last year.”

Las Vegas is on pace for its worst real estate year since 2008 but there may be light at the end of the tunnel given mortgage and interest rates have been falling to end 2023. Redfin is reporting a slight rise nationally in listings, which are up 5.2 percent year over year, the biggest uptick in two years. Mortgage rates have also come down from a recent historical high of 8 percent to 7.3 percent from a month ago.

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.

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