June 25, 2023 - 7:24 pm
The real estate market is experiencing unprecedented dynamics, raising questions about the possibility of returning to normal levels of inventory. The scarcity of available homes has created a trigger effect, with potential buyers opting to delay their homebuying plans due to limited options and sellers being motivated to stay put, as they see no immediate incentives to move and lose their record-low interest rates.
As agents, it is crucial for us to navigate the ever-changing real estate landscape with resilience and adaptability. To determine if inventory levels will return to normal, we must first examine which key factors are impacting inventory, including market stability, homebuilders, high demand and interest rates.
Market stability and high demand
Last fall, a wave of panic swept through the local homebuilding industry in Las Vegas due to interest rate fluctuations. In response, homebuilders sold off their land holdings, creating an even greater default in available inventory.
However, builders have recently regained confidence and are in the process of repurchasing the same land or acquiring new parcels. While it will take at least 12 months for the new homes to be built and spark up more inventory, it still marks a positive shift toward replenishing the inventory.
The demand for homes also remains consistently high, leading to a highly competitive environment where homes are quickly absorbed by eager buyers.
Not only are homes not on the market for long, but homes are slow to come to market. This sustained demand further emphasizes the need for a greater supply of available properties.
Projected impact of interest rates
The current low-interest-rate environment has led many homeowners to stay put, benefiting from favorable mortgage rates as low as 2 percent.
However, with interest rates predicted to shift in the next six to nine months more sellers may be inclined to put their homes on the market.
The expected increase in interest rates often serves as a motivation for potential buyers, compelling them to act swiftly in order to secure more favorable financing terms.
As sellers become aware of this trend, they are likely to seize the opportunity, recognizing the increased demand.
Agent strategies to create inventory
Agents can proactively create inventory by staying in touch with their clients and identifying potential life-changing events that may prompt homeowners to sell, such as career advancements, growing families or parents moving in. Engaging with neighborhoods and employing proactive approaches, such as cold calling or sending out mailers, can uncover potential off-market listings.
While the Southern Nevada real estate market faces challenges in achieving normal inventory levels, real estate agents can play an active role by fostering client relationships and employing proactive strategies to create inventory, even amid bidding wars and increased competition.
Adapting to these challenges will allow agents to continue satisfying clients’ needs and securing the best deals, recognizing that the path to normal inventory levels may be challenging. Staying informed and agile in navigating the evolving market landscape is crucial for success.
Alex Adabashi is a licensed broker, Realtor and team lead with the Adabashi Group at huntington &ellis, A Real Estate Agency.