67°F
weather icon Mostly Cloudy

Las Vegas housing market slowed, then sped up, in past year

Las Vegas’ housing market has been on a hot streak for more than a year as buyers snap up homes, prices keep reaching all-time highs, and sellers field a barrage of offers.

Well, a near-uninterrupted hot streak that is, as a report again showed this week.

The median sales price of previously owned single-family homes — the bulk of the market — was $405,000 last month, unchanged from the record high set in July but up almost 21 percent from August of last year, trade association Las Vegas Realtors reported.

Prices had been climbing continuously for months, setting records at each step. According to the association, the price streak took “a momentary pause” in August while the market “readies for its last surge before the expected holiday slowdown begins.”

It wasn’t the first time that home values flattened out since the market started accelerating last year. Las Vegas’ median house price was the same from November through January at a now-bargain but then-record $345,000.

Moreover, sales tumbled at home construction sites and existing neighborhoods in Southern Nevada during the normally busy spring buying season amid a nationwide pullback.

Of course, there’s no way to predict where the market is going, including when, or how, the current frenzy will end. Plus, housing markets are always prone to ups and downs, especially in Las Vegas.

But over the past several months, some signs that Southern Nevada’s market was tapping the brakes have come and gone, as prices resumed their upward march and sales totals reversed their slide.

Perhaps the main reason: The market’s main fuel, cheap money, keeps flowing.

Rock-bottom mortgage rates are still hovering at historic lows, letting buyers lock in lower monthly payments and stretch their budgets. Across the U.S., borrowing costs have shrunk in recent months after a brief climb early this year, with the average rate on a 30-year home loan at 2.84 percent in August, down from 3.08 percent in March, according to mortgage-finance giant Freddie Mac.

To be sure, just because you can borrow at low rates doesn’t mean you can always afford the house payments. The buying binge that swept across Las Vegas and the rest of the nation created an extreme seller’s market, pushing prices higher as homeowners cashed in on the frenzy.

All told, Southern Nevada homes have been selling for nearly 42 percent above their long-term pricing trends, making it the ninth-most overvalued market in the nation, according to a report from professors at Florida Atlantic University and Florida International University.

“Even with mortgage interest rates near all-time lows, it’s still presenting challenges for some buyers and working-class families to afford a home,” Las Vegas Realtors President Aldo Martinez said in a news release.

So, what will follow last month’s price pause?

We’ll find out soon enough.

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

THE LATEST
Zillow hits pause on buying more homes

The company announced that due to a “backlog in renovations and operational capacity constraints,” it will not sign any new contracts to buy homes “through the end of the year.”