Nonessential Las Vegas businesses were shuttered for the entirety of last month due to Coronavirus. As expected, sales were down significantly. In addition, the market saw a decrease in the median sales price.
Read or watch for the full April 2020 Las Vegas Real Estate Market Update.
Median home prices dipped from the previous month, but perhaps not as dramatically as anticipated. The median sales price for single-family homes was $310,000 which was down 2.8% from an all-time high of $319,000 last month, but up 3.3% from the same time last year.
We begin to see the fallout of the coronavirus as we look at units sold. Normally, the spring market is the “hottest” for home sales. However, there were 1,971 single-family homes sold which is down 28.5% from the previous month and down 31.4% from the same time last year.
Similarly, there were 440 condos and townhomes sold which is down 38.4% from last month and down 41.6% from the same time last year.
This decrease in sales is to be expected due to buyers being taken out of the pool due to layoffs and uncertainty.
While we don’t normally track pending sales, it is something to keep note of during the pandemic. Because the majority of properties are purchased with a loan, the typical escrow process takes 30 days. Therefore, those properties currently pending will be the ones closing next month.
There ware 3,142 SFR and 648 condos and townhomes pending. This is down about 30% from last year. Therefore, we can predict the coming month to also show sales down 30% from the previous year.
It is important to keep in mind a portion of these escrows are “paused” while the buyer is out of work. These will only close if the buyer does indeed go back to work.
Inventory is up from last month but is down significantly from last year. While there is less demand, there have also been significantly fewer (about 30% fewer) listings taken.
There are 6,043 SFR available, up 6.3% from last month and down 18.7% from last year. There were 1,772 condos and townhomes available, up 8.8% from last month and down 3% from last year.
Although the demand is down, this low inventory (supply) could help prices remain relatively stable. In fact, we are personally seeing nice, well-priced entry-level homes receive multiple offers.
The properties getting hit the hardest are home over $500,000 as many buyers are hanging on to their cash and many jumbo-loan programs have been paused.
Lastly, let’s look at months of inventory, which is understandably creeping up. There is 3.1 months of availability for single-family homes (up 48.7% from last month and up 18.4% from last year). Similarly, there are 4.0 months of availability for condos and townhomes, up 76.6% from last month and up 66.1% from last year.
Months of availability reflect how long the current inventory would last if demand remains the same and no new homes came on the market. Generally, 6 months is considered a “balanced market,” while anything less is a seller’s market and anything over 6 months is a buyer’s market.
Despite the craziness, Las Vegas is still considered a seller’s market which means sellers tend to have “the upper hand.” However, please keep in mind that every market is hyper-local and this can vary across the Valley.
The full effects of the coronavirus on the Las Vegas real estate market remain to be seen, but we are optimistic.
One positive indicator for the future is a report put out by ShowingTime. Realtors use this app to request showings on homes. Showings plummeted at the end of March, but they have been steadily on the increase for the past 4 weeks. We are finally back to the level of showings we saw in January.
Another key to the health of the real estate market is mortgage forbearance. There was uncertainty at the beginning of the coronavirus pandemic on whether home-owners would face a “lump sum payment” at the end of the forbearance period. The federal housing authorities stepped in and clarified that this will not be allowed for all loans they back (this includes most “average” home-owners). For the full statement, CLICK HERE.
This policy will GREATLY reduce the number of short sales and foreclosures we see down the line.
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All data is April 2020 numbers, supplied by the Las Vegas Realtors. Deemed reliable but not guaranteed.