New data from the Greater Las Vegas Association of Realtors (GLVAR) indicates that the median house price in Southern Nevada increased only slightly last month as fewer homes were sold.
GLVAR reported that the median price of single-family homes sold in September this year was $202,500, up 1.3% from $200,000 in July and August, and up 12.5% from a year ago. Meanwhile, the median price of condominiums and towhouses in September went down slightly, by 0.7% from $105,000 in August to $104,250 in September. While month-on-month rises may have slowed, though, prices are still 9.7% up from a year ago.
The president of GLVAR, Heidi Kasama, said, ‘Our housing prices went up slightly last month, but they haven’t really changed much these past few months.’ Our market is entering a more stable time, with inventory levels increasing slightly and price increases moderating. Overall, I still think this is a great time for buyers to enter the market.’
Ms. Kasama also pointed out that GLVAR’s median local house price remains well below the peak for Southern Nevada property prices, in June 2006, when the median price was $315,000 – yet prices are also significantly above the rock-bottom $118,000 median of January 2012 too, meaning a more stable market. It’s also a good market for investors – median house prices rose by 24% year-on-year in 2012 and 2013.
However, stock is running down. GLVAR said the total number of existing homes, condominiums and townhouses sold in September was 2,982, down from 3,120 in August and from 3,259 in September of 2013. Kasama said local home sales are running about 12% behind last year’s figures. In fact stock is running so low that it may be destabilizing the market: there’s about enough housing stock in Southern Nevada to support current sales for four months. REALTORS® considers that a six-month supply is a sign of a balanced market.
Distressed sales have been falling for the last two years, according to GVLAR. That trend has continued in September when GLVAR reported that 10.4% of all sales were ‘short sales’ – where a lender allows the sale of a distressed property for less than is owed on the mortgage. That’s down from 11.5% in August, and straight bank-owned sales were also down, to 8.8% from August’s 8.9%.
Part of the decline in sales in Southern Nevada is a result of uncertainty in the market as to whether Congress will vote to extend the Mortgage Forgiveness Debt Relief Act of 2007, which expired on December 31, 2013. If Congress doesn’t reenact the law and make it retroactive to January 1 2014, there will be an unexpected and significant tax hit for anyone who completed a short sale in 2014, a consideration which is understandably subduing the market in that area.
Another consideration is that the real estate market in Southern Nevada appears to be shifting bases. In September, the monthly total value of real estate transactions was down 11.3% for homes – but it rose 16.8% from August on condominiums and townhouses.