Home prices break record while supply keeps shrinking

Existing local home prices finally broke their all-time record, while the housing supply keeps shrinking. So says a recent report by Las Vegas Realtors.

LVR (formerly known as the Greater Las Vegas Association of Realtors) reported that the median price of existing single-family homes sold in Southern Nevada through its Multiple Listing Service during February 2020 was $316,000. That was up 3.6 percent from January and up 6.7 percent from February 2019, passing the record of $315,000 set in June 2006.

“We’ve been waiting for this milestone for a long time,” said 2020 LVR President Tom Blanchard, a longtime local Realtor. “While it’s interesting to talk about how we finally broke the record, it’s important to remember that it took us more than 13 years to get here. If you account for inflation, you could argue that home prices should actually be much higher than they are today.”

Meanwhile, LVR reported that the median price of local condos and town homes sold in February was $175,000, the same as January and up 6.1 percent from February 2019.

After seeing the median local home price in December 2019 come within a few thousand dollars of its all-time peak, Blanchard said he expected that price record to fall in 2020. Before slowing down last year, local home prices had been soaring since early 2012, posting double-digit gains from year to year while climbing back from their post-recession low point. According to LVR, the median price of existing single-family homes sold in Southern Nevada peaked at $315,000 in June 2006 before falling during the recession. Local home prices hit a post-recession bottom of $118,000 in January of 2012.

Blanchard said he’s also encouraged to see home sales increasing to start 2020. The total number of existing local homes, condos and town homes sold during February was 3,089. Compared with the same time last year, February sales were up 25.7 percent for homes and up 14 percent for condos and town homes.

That year-over-year sales increase reverses last year’s trend. According to LVR, the total number of existing local homes, condos and town homes sold in Southern Nevada during 2019 was 41,269. That was down from 42,876 total sales in 2018 and from 45,388 in 2017.

As for headwinds in the housing market, Blanchard said the local housing supply continues to shrink to historically low levels. The current sales pace equates to less than a two-month supply of homes available for sale. A six-month supply is considered a more balanced market, he said.

“I think it’s now safe to say that we’re dealing with a housing shortage,” Blanchard said. “This is also true in other parts of the country, where people are staying in their homes longer and homebuilding is simply not keeping up with demand, especially in growing areas like Southern Nevada.”

By the end of February, LVR reported 4,240 single-family homes listed for sale without any sort of offer. That’s down 40.6 percent from one year ago. For condos and town homes, the 1,214 properties listed without offers in February represented a 30.8 percent drop from one year ago.

LVR reported that 25.1 percent of all local properties sold in February were purchased with cash. That compares to 26.2 percent one year ago. That’s well below the February 2013 peak of 59.5 percent, indicating that cash buyers and investors are still active in the local housing market, but playing a smaller role than they were during the recession.

The number of distressed sales remains near historically low levels. The association reported that short sales and foreclosures combined accounted for 2.5 percent of all existing local property sales in February. That compares to 2.6 percent of all sales one year ago, 3.8 percent two years ago and 10.6 percent three years ago.

These LVR statistics include activity through the end of February 2020. LVR distributes statistics each month based on data collected through its MLS, which does not necessarily account for newly constructed homes sold by local builders or homes for sale by owners. Other highlights include:

■ The total value of local real estate transactions tracked through the MLS during February was nearly $918 million for homes and more than $116 million for condos, high-rise condos and town homes. Compared with one year ago, total sales values in February were up 33.1 percent for homes and up 21.2 percent for condos and town homes.

■ Homes and condos are selling at a slower pace than last year at this time. In February, 68.5 percent of all existing local homes and 66.9 percent of all existing local condos and town homes sold within 60 days. That compares to one year ago, when 69.3 percent of all existing local homes and 69.7 percent of all existing local condos and town homes sold within 60 days.

Las Vegas Realtors (formerly known as GLVAR) was founded in 1947 and provides its more than 15,000 local members with education, training and political representation. The local representative of the National Association of Realtors, LVR is the largest professional organization in Southern Nevada. For more information, visit LasVegasRealtor.com.