97°F
weather icon Partly Cloudy

Expert predicts bounce back in housing

A deputy chief economist with Federal Home Mortgage Corp. said while existing home sales and new construction has been down in markets like Las Vegas since the fall, Southern Nevada is primed to do well over the next two years because of strong job growth and relocation of Californians.

Leonard Kiefer served as the keynote speaker at an affordable lending seminar hosted by Guild Mortgage on March 5 at the Hampton Inn Tropicana. He said he remains bullish on the housing market over the next decade because builders haven’t constructed homes to excess like they did in the 2000s and upward trend of millennials becoming first-time homebuyers, which he said should continue.

Kiefer said he has a more optimistic view of the housing market’s direction and economy than other analysts.

The National Association of Business Economics did a recent survey, of which Kiefer participated, that showed more than half said they expected a recession by 2021. Kiefer said he’s one of the economists who don’t think that will happen because of the housing market.

“There’s this notion that the economy is more vulnerable than it has been at any point since the recovery began in 2009,” Kiefer said. “When it comes to real estate, I’m a lot more optimistic so that’s why I was in the minority in thinking we will retain a moderate growth projection for the U.S. economy. I look at the housing market and think it has a really good story to tell.”

Kiefer said the labor market is in great shape and unemployment rate is near historic lows. It’s “particularly strong in Vegas” where it is above the national average and that bodes well for the local economy to perform.

The trend in the Las Vegas housing market based on the latest report from the Greater Las Vegas Association of Realtors shows Southern Nevada is following the national trend of an increasing housing supply and fewer sales. Prices have even been coming down lately to spur sales and Realtors speculate there will be a slower spring sales season than in recent years.

Kiefer said he expects continued moderation in Las Vegas housing market trends as supply and demand move back toward balance. Favorable demographics will support activity because of pent-up demand, he said. The homeownership rate is starting to surge after falling sharply after the Great Recession, he added.

What’s a key is an expected continued decline in interest rates that reached 5 percent last fall for the 30-year fixed rate, Kiefer said. He said that’s fallen to 4.35 percent most recently.

“That increase in rates really hit the housing market hard,” Kiefer said. “That caused a slowdown in construction and sales. Looking ahead, we’re feeling good and the rates are back down and that may give us a lift in terms of overall housing market activity.”

There continues to be challenges, Kiefer said, even for markets like Las Vegas with the imbalance between demand and housing supply. There’s not enough affordable housing being created and available on the resale market, he said.

“Vegas is building a lot more than the average, but they’re not adding supply in California. You had 10,000 people move here from Los Angeles County alone in 2018,” Kiefer said.

That’s putting pressure on the lack of supply and hitting young adults, looking to buy their first home, the most, Kiefer said. Homeownership rates had fallen overall since 2000 because of less affordable housing, he said. While Las Vegas home prices rose 10 percent overall over the past year, it’s gone up 20 percent for the affordable home sector, Kiefer said.

“It’s the lowest price where the demand is the strongest, and there’s the most volatility,” Kiefer said. “Those affordable houses are tough to get. They’re not building enough housing and there’s a lot of in migration coming in, and people are competing for those and that’s pushing up prices.”

Kiefer said it’s tough to find homes for qualified borrowers, and that trend should continue this spring and into next year until more affordable housing is built. That’s what has been driving a lot of town home construction by Las Vegas builders to meet that demand of lower priced housing.

Kiefer still remained optimistic.

“Millennials are showing up and first-time buyers are moving the market,” Kiefer said. “I think as interest rates moderate in 2019, we will have a bounce back in housing. Overall, the housing market is in good place for solid growth over the next two years.”

In its March report, SalesTraq said the start of the sales year has been a lull compared to 2018 but with population and employment growth robust, demand for housing is expected to continue.

That’s why builders have started construction on nearly 11,000 new homes over the past year, which is an 11 percent gain.

As for the resale market, the firm noted that some of the prices requested by sellers are too high and need to come down in order to sell.

At the event, Guild Mortgage outlined its 3-2-1 mortgage program that allows people to purchase a home with as little as 3 percent down. Guild provides a $2,000 Home Depot Gift Card and $1,500 grant that can be applied toward closing costs or for increasing the down payment.

Don't miss the big stories. Like us on Facebook.
THE LATEST
Changes in law will affect how associations can tow vehicles

Senate Bill 212 was changed. It affects how associations can tow vehicles in the community. The existing law states that a vehicle may not be towed until 48 hours after affixing a notice to the vehicle that explains when it will be towed (with the exception of vehicles that are related to health, safety or welfare, i.e. parking in front of fire hydrants, etc.).

RESALE HOME SALES May 29-June 3

Editor’s note: Listings include the resale home’s parcel number. The address listed is the homebuyer’s mailing address and not the actual location of the resale home. About 90 percent of these addresses reflect the home purchase. Check the parcel number to make sure. Also, a few transactions do not reflect the market value of the homes. The information is provided by Accudata, a local research firm. For the complete listing, visit RJRealEstate.Vegas.

New Nevada laws that will affect HOAs

There were not too many laws passed in this last legislative session that affected our local homeowners associations. Here are some that did.

BHHS partners with Adwerx to offer Realtors new program

Berkshire Hathaway HomeServices Nevada Properties, in partnership with Adwerx Enterprises, has launched a new platform, called Brilliantly Simple to immediately advertise its real estate listings online. The platform automatically creates digital advertising programs for each home, including custom ads that are optimized for social media, apps and websites.

Homeowners have right to see HOA financial records

Per Nevada Revised Statute 116.31175 (1a), upon written request, you are entitled to receive financial statements from your association. Please send a formal specific request of what financial statements that you would like to receive.

High land costs affect developments

For all the job growth and expansion in the Las Vegas economy, a lack of land and its high cost is restricting growth in the valley, experts told the Southern Nevada real estate and development community.

Local home prices stuck at $300,000

For the third straight month, the Greater Las Vegas Association of Realtors, GLVAR, reported that local home prices are hovering at $300,000, while the number of homes on the market continues to increase.

Fair Housing Law requires accommodations for disabled

The Fair Housing Law requires accommodations for the disabled. Based upon your email, the homeowner would have a strong claim against the association if the homeowner was forced to remove the motor home, or if the association were to fine the homeowner because of the therapy equipment. Take the time to meet with this homeowner and see if there are any other viable alternatives.

HOA must deal with bully board member

The only way to keep bully board members in check is for the entire board to deal with the issue in executive session. Depending upon the gravity of the situation, legal counsel should be informed and invited to attend the executive session.

Federal law allows for service animals in HOA

The Fair Housing Act amendments of 1988 extended the protections of Title VIII of the Civil Rights Act of 1968. Associations must allow service dogs and emotional support animals, if necessary for a person with a disability.