Home Prices Up in Las Vegas
The median price of a single family home rose during November to $202,000, up 1.1%, according to the Greater Las Vegas Association of Realtors. Prices are also up 10.4% on a year over year basis, despite a decline in sales volume.
The Las Vegas housing market has seen a slump in sales going into the holiday season, which is fairly typical for this time of the year. Home owners sold about 2,000 houses through the MLS last month, a drop of 12.8% from October and 7.7% from a year ago as investors backed off from making more home purchases.
The slowdown in investment purchases will likely persist through the winter season, despite near record low mortgage rates being offered by banks and other mortgage lenders.
“Our local housing market has been fairly stable this year,” GLVAR President Heidi Kasama said. “Unless something dramatic happens in the coming months, we expect to see more of the same in 2015.”
Real estate investors took advantage of low prices after the economy collapsed to purchase cheap homes in bulk, but have since slowed their buying habits as prices slowly rise with improving market conditions. Higher employment rates locally drive more mom and pop buyers back into the market. Housing investors resurrected the Las Vegas housing market with their purchases, driving the region into having the top appreciating market in the U.S. last year at a rate exceeding 30% on the media price of a home.
Almost one-in-three home purchases (32%) were cash transactions in November, a steep drop from 60% in February 2013. Investors pay cash for homes more than owner occupants on a ratio of about 4 to 1, while the majority of home buyers who intend to live in their homes full time obtain mortgages.
The listing inventory has swelled over the past few months as more homes are placed on the market for sale demanding higher prices. About 8,200 homes are listed in the Las Vegas Multiple Listing Service. Most neighborhoods in Las Vegas have more homes on the market than can sell quickly, which usually produces a slowdown in the marketplace.
Prices may decline in some areas of the Valley as a result of the slower pace of sales, which makes it a better opportunity for buyers to negotiate for a bargain than in recent months. The median listing price of a home without offers was $249,500 in November, which is 23.5% above what the typical home sold for in November.