As more people are looking to secure homes and even secondary homes, we have seen an increase in the number of cash buyers in the real estate market in the past month. Currently cash buyers make up to 28% of the market, an increase of 13% from the same time last year. With the market becoming more competitive for buyers and supply of lumber, HVAC and appliances unable to keep up with demand, prices of new construction homes continue to increase by as much as $35,000 from the same time last year.
We discuss all these changes in the market and provide tips on how to buy a home in an extreme sellers market.
Read or watch for the full May 2021 Las Vegas Real Estate Market Update. All data from LVR April 2021.
High demand for home and low supply continues to drive prices of homes up. Median prices of single-family homes increased again from the previous month to $375,000. This is up 3.3% from last month and up a whopping 21% from the same time last year.
This same appreciation follows into the sales prices of condos and townhomes, with median sales prices of condos and townhomes increasing to $202,450 . This is up 4.4% from last month and up 12.3% from the same time last year. We expect this increase to continue into next month.
There may be a softening in the market in the future, but if interest rates continue to stay low we don’t foresee prices falling anytime soon.
There was a slight decrease from the previous month to 3,528 single-family homes sold last month. This was down 5.3% from the previous month and up a total of 79% from the previous year. This slight decrease month over month was a reflection of the pending sales from the previous month. Note that the large increase from the previous year is protracted due to the height of COVID impacting sales from the same time last year. Another good comparison would be from the year 2019, where we saw a 23% increase in units sold this year compared to the same time 2 years ago. Although the demand is there, low inventory and extremely high demand has resulted in less units sold from the previous month.
1,024 condos and townhomes were sold last month. This was up 2.6% from the previous month and up 132.7% from the same time last year. Likewise the increase from the previous year was affected by COVID impacting units sold. In comparison to the same time in the year 2019, there was an increase of 36% for units sold.
While the demand exists for new homes, there are hardly any homes on the market for buyers and this will make the market even more competitive for the prospective home buyer in the following months!
Inventory remains low at just 1,827 single-family homes available for sale, which is up 3.1% from the previous month and down 69.8% from the same time last year. It is important to note here that the slight increase in inventory is due to the low number of units sold. Due to high demand, 81.5% of homes that hit the market sell within 30 days, leaving effective months of availability extremely low at 0.5 months. We estimate that close to 50% of homes that hit the market sell within just 7 days.
Along those same lines, there were 519 condos and townhomes available for sale. This was down 13.1% from last month and down 70.7% from last year. Pending sales continue to remain the same this month and 76.7% of condos and townhomes that hit the market sell within 30 days.
Currently, like single-family homes, condos and townhomes effective months of availability have dropped to just 0.5%. A balanced market that neither favors the buyer or the seller balances out at around 6 months of inventory. This huge dip in months of inventory means that market conditions heavily favor the seller and has resulted in a huge increase of cash buyers in the market, some even leveraging other assets to purchase homes.
If you’ve been thinking of selling, the market remains ripe for you to do so. Many listings are receiving multiple offers within hours…and with ever-decreasing inventory, buyers have had to come out over asking, waiving inspections, etc. to secure a home.
Interest rates remain at historical lows and should they rise, we do expect to see a softening in the market. However this is unlikely and we don’t expect housing prices to drop anytime soon – in fact we predict that we have quite a ways to go!
If you’re in the market to buy, here are some tips on how to buy a home in an extreme sellers market:
All data is April 2021 numbers, supplied by the Las Vegas Realtors. Deemed reliable but not guaranteed.