Las Vegas housing market looks ‘unusual’ as sales fall, prices rise

After the most heated housing year in a while, the market, as some see it, is looking a bit unusual these days.

In Las Vegas and around the country, sales totals have dropped lately as once-rock-bottom mortgage rates shot higher. At the same time, sales prices keep rising, and homes that are selling trade quickly.

Housing markets are prone to ups, downs and other shifts, especially in Las Vegas, and there’s no telling how long the current trends will last. But overall, it’s a jumble of market moves that I can’t recall seeing all at the same time before in my nearly 10 years reporting on real estate in Southern Nevada.

Lawrence Yun, chief economist with the National Association of Realtors, pointed to the rare state of the U.S. housing market in a recent news release.

“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” Yun said.

Frank Nothaft, chief economist with housing tracker CoreLogic, told me Friday that he agrees with Yun.

“This is a really unique market that we’re in right now,” Nothaft said.

In Southern Nevada, the median sales price of previously owned single-family homes was a record $475,000 in April, up 3.3 percent from March and 26.7 percent from April of 2021, according to trade association Las Vegas Realtors, which pulls data from its resale-heavy listing service.

Amid the typically busy spring buying season, 3,001 single-family homes traded hands last month, down 8.3 percent from March and 14.9 percent from April 2021, the association reported.

Among the houses that sold last month, 87.2 percent had been on the market for 30 days or less, up from 82.8 percent in March and 81.5 percent in April 2021.

Overall, Nothaft said his team has noticed the same factors that Las Vegas is seeing in “so many other places around the country.” The flow of new listings is down, and availability remains “quite lean,” yet there is still plenty of demand for houses.

Nothaft figures the tally of new listings is down in part because existing homeowners, when they think about selling, might have to take out a mortgage at a higher rate for a new place, prompting them to shelve plans to move.

He also said that some people who could afford to buy a place when rates were lower are now “stretched” to qualify for a mortgage or might balk at the monthly payments.

According to Nothaft, if the same house listed today had been on the market a year ago, the monthly payment would be about 50 percent higher now given the rising prices and higher mortgage rates.

“That’s huge,” he said.

Fueled by low borrowing costs, Las Vegas’ housing market accelerated last year as prices hit all-time highs practically every month, homes sold rapidly, and the annual number of resales hit a record high.

Lately, however, sales totals have fallen locally and nationally as cheap money went away.

The average rate on a 30-year home loan was 5.1 percent as of Thursday, down from 5.25 percent last week but still up from 2.95 percent a year ago, mortgage-finance giant Freddie Mac reported.

Nonetheless, there is still a “core group of buyers” who can afford the larger payments, Nothaft said, adding that some might be moving from pricier cities such as Los Angeles or San Francisco.

Compared with those markets, “Las Vegas looks a lot more affordable,” he said, though it’s become “increasingly challenging” for existing Southern Nevada residents who don’t earn as much as Californians to buy a place here.

“For someone who’s a local, they see their affordability really eroding,” Nothaft said.

So, where will Las Vegas’ market go from here?

Sit tight.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.