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Las Vegas Valley one of few metros in US to see home prices drop, report says

Updated September 5, 2023 - 10:07 pm

The Las Vegas Valley saw its first month-to-month home price decrease since the start of the year in August, according to a new report from Redfin.

In fact, the valley was one of only six metros in the U.S. that saw a drop in home prices from July to August, with Austin leading the way (-8.7 percent), followed by Phoenix (-2.4), Portland, (-1.4), Fort Worth, (-1.3), Las Vegas (-1.2) and San Antonio (-0.5).

The median sale price for a home in the Las Vegas Valley at the end of August was $415,000 according to Redfin, a 3.6 percent drop from the end of August 2022.

But the median home sale price for a U.S. home is currently $379,975, up 4.8 percent from a year ago, which is the biggest increase since October of last year.

Daryl Fairweather, the chief economist for Redfin, said she doesn’t think this is the top of the cycle for the Las Vegas market as conditions could change.

“I don’t think the Las Vegas market has necessarily peaked,” she added. “Recent increases in mortgage rates along with normal seasonal trends indicate the market has peaked for this year. But if mortgage rates subside next year there could be a boost in demand for homes that sends prices and sales back up. Las Vegas remains an affordable option for homebuyers leaving Los Angeles, San Francisco or other expensive metros, so that will continue to support demand as well.”

Las Vegas was second in the nation when it came to a drop in new listings year over year up until the end of August, as they fell most in Atlanta (-32 percent), followed by Las Vegas (-27.5), Cleveland (-26.7), Sacramento (-21.4) and Riverside (-20.9%).

Dana Anderson, a data journalist for Redfin, noted in the report that the national trend in which home prices continue to rise in most cities is due to one main factor.

“Home prices are rising due to a severe inventory shortage,” she said. “The total number of U.S. homes for sale is down 19 percent, the biggest drop since February 2022, and new listings are down 10 percent. Supply is low because homeowners are hanging onto their low mortgage rates.”

Anderson said nearly all homeowners in the U.S. right now have a mortgage rate that is under 6 percent, and the typical monthly mortgage payment on a median asking price home was a record-high $2,649 at the end of August, with the rate at 7.23 percent. That’s up 18 percent from a year earlier.

“The lack of homes for sale is causing competition for desirable homes despite high mortgage rates and a relatively small pool of buyers,” she added.

Miami led the way in terms of price increases year over year with 17.1 percent, followed by Newark, (16.1), San Diego (12.3), Milwaukee (12.1) and Providence, (11).

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.

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