weather icon Mostly Cloudy

Will normal real estate inventory levels return?

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.

Don't miss the big stories. Like us on Facebook.
How to better serve Gen Z and millennial homebuyers

Rapid surge in property values has introduced affordability hurdles for many millennials, those born between 1981 and 1996, and Gen Z individuals, those born between 1997 and 2012, making the dream of homeownership intangible. Therefore, understanding how to provide support to these buyers has become increasingly important.

Cultivating a vibrant real estate company culture

In the dynamic world of real estate, success is often measured in numbers — deals closed, properties sold, profits made. But beneath the surface of these metrics lies a vital force that drives a company’s true achievements — its culture.

Demand for luxury apartments continues to increase

According to reports by Coldwell Banker, 2023 will be a record-breaking year for apartment complex completions in Las Vegas as 19 high-end multifamily developments have or will be completed this year or by early 2024 — adding 7,000 units to the city’s inventory. By contrast in 2022, only 882 units came online.

What’s the difference between real estate agent and Realtor?

Lately with the real estate market being so hectic with inventory down and interest rates up clients — both buyers and sellers — have asked me what is the difference between a Realtor and someone else who also has a real estate license but they are just a real estate agent.

What owners, agents should look for in home inspections

A home inspection is a crucial step in the process of buying or selling a property. For both real estate agents and homeowners, understanding what to look for in a home inspection is essential to ensure a smooth transaction and make informed decisions.

Four proven strategies for finding off-market inventory

“Off-market listings” or “quiet listings” are homes that are for sale but aren’t listed on multiple listing services.

Borrowing from your home equity? Avoid these top 5 mistakes

Borrowing on home equity can be advantageous to many homeowners, but following these main tips and conducting your own research will help avoid any pitfalls in the process.

Summer weatherization tips to keep things cool

We all know that out here in the desert climate, air conditioning is essential; but, with rising costs of seemingly everything these days, there are other ways homeowners can keep their house cool and comfortable and make sure the AC unit isn’t working overtime.

Summer weatherization tips to keep things cool

We all know that out here in the desert climate, air conditioning is essential; but, with rising costs of seemingly everything these days, there are other ways homeowners can keep their house cool and comfortable and make sure the AC unit isn’t working overtime.

Unlicensed contractor complaints on solar and pool projects rise

The Nevada State Contractors Board also sees a significant number of complaints being filed when work performed by unlicensed contractors leaves homeowners with poor workmanship, incomplete projects or no work performed at all.