February 2023:
Happy February 2023! The new year celebrations have settled down and now we are diving into the full plunge of 2023. The time is here to start diving deep into the goals we set for the year and working full speed ahead towards what we have set our sights upon. Fun Fact! Did you know that the word February comes from the Latin word februa, which means “to cleanse,” and during the Roman days there was a purification and atonement that took place during this time of year, as a sort of self- “spring-cleaning.” Also, of all the months of the year – February is the one misspelled the most.
FEBRUARY, 2023 MARKET UPDATE: We had a slight teaser with rates at/around 5.99% the first couple of days into February, and then increase, increase, increase, and back to around 6.49%. We think we might see another drop again soon. Many sellers who are motivated are offering rate buy-downs to buyers, so many buyers have been locking their rates in the low to mid 5%’s, with financial assistance from motivated sellers. The rates dropping has brought back some affordability and it shows as more buyers are beginning to enter the market, particularly at this time of year when we tend to see more buyers jumping in once their taxes are filed. It appears we might be stabilizing though, as the median sales price for January 2023 remained the same as December 2022 at $420,000. We saw a drop in sales inventory again which is tricky because technically we only had an increase of 51 more homes sold in January 2023 vs December 2022; however, because sales inventory decreased, our absorption rate increased which makes it looks like sales jumped up quite a bit when they were really close to about the same as the month prior. We are currently sitting at around 5,600+/- single-family homes available on the market throughout the Las Vegas Valley which is a 13.85% drop from December’s inventory (approximately 6,500+/- single-family homes were on the market in December 2022). This means sales inventory has been dropping week after week for a little over 3 months now, sitting us at around 4.20 months of inventory. The homes that are moving continue to be those that are priced below market, in remodeled or highly upgraded condition, have pools, or something very special/unique. Time to get out the old paint bucket and hammer, and spruce up the place, Larry! (lol)
I believe more and more buyers will enter the market, but I also believe inventory will increase. I think the price drops we experienced had a lot of people fearing that they missed the boat… and now that the holiday season has passed, people will be preparing their homes to place on the market for sale. If inventory increases, rates drop into the 5%’s, and more buyers enter the market – we should see some more stabilizing continue. We may even see a little bit of a jump with inventory dropping, creating some unanticipated multiple-offer situations on superb properties.
As more and more announcements of job layoffs come across the news media, it does worry me how certain industries will affect others. Tech industries for example, will have a lingering effect on blue-collar jobs such as Amazon, and other distribution companies. As more and more AI (artificial intelligence) makes its way through to everyday tasks, more jobs will continue to not ever come back as well. The other key piece to think about is that prices of goods, food, and everyday essentials don’t seem to be dropping. So, until we see those numbers dropping inflation isn’t decreasing as much as the Fed had planned. Their intent was to start with rates, then housing, etc… so we will continue to see how this “plan” comes to fruition.
The rental market picked up slightly with 87 more homes renting in January 2023 than in December 2022. As we continue through into the spring, more and more renters will enter the market. What we are seeing a lot of though is tenants are not wanting to renew their leases. They’re wanting to move even if the rental rate isn’t increasing (some entering the buying market, some looking for a bigger space at a reduced rate, and some are downsizing in preparation for more of a recession to come). And they’re negotiating with us based more on what they’re seeing competitive rentals being listed in their area. This means renters are catching on to the falling rental prices, and they’re acting upon the information that they’re aware of. This also means rental inventory may continue to increase and we may have to start offering incentives in our marketing to be able to attract more tenants (i.e., move-in incentives, discounted entry rent, etc…).
The next two paragraphs are stats I pulled on the local market, directly from our MLS through the Las Vegas Association of REALTORS®. Remember that although we are in February, the stats I pull are for the month prior showing a complete month of what took place the month prior.
Sales Stats for January 2023: Sales increased slightly to 1,328 homes, and the median price stayed the same as the month prior at $420,000, still down 13.403% since the May 2022 peak. This has us with around 4.20 months of inventory and an absorption rate overall of 31.48% (properties under contract vs. listed). The average days on market for the Las Vegas Valley single-family homes sales market is approximately 57 +/- days. We are sitting at a current sales inventory of around 5,600 +/- homes, with approximately 2,500 +/- homes under contract.
Rental Stats for January 2023: The median rental price stayed the same as the month prior at $1,900 in January 2023 vs $2,337 in June 2022. 2,023 properties were leased in January 2023 compared to 1936 homes in December 2022. Average days on market for rental properties made another leap to 43+/- days for January 2023 compared to 15-20+/- during the summer of 2022. Rental inventory in the Las Vegas market had a slight decrease of around 5.5% from the month prior to approximately 4,158 +/- properties on the market vs. December 2022 which was around 4,400+/- homes, equating to around 2.05 months of rental inventory. Our absorption rate in the rental market is around 14.65% (reserved rentals, vs current inventory), which is quite high!
OWNER TIP OF THE MONTH:
If you ever want to make any changes to the title of your policy, i.e. changing the title to the name of your trust &/or LLC, you should always check your title policy first to make sure that your policy will allow you to make the change and if it does the specific instructions your title insurance company has to do so. Oftentimes, for example, a title company will require a notary who is licensed and insured to notarize property deeds. This will help ensure that you do not have any clouds on your title or issues down the road when selling your home; but, more importantly, will allow you to not void or hinder your title insurance policy by following their requirements. If you don’t remember who your title company was, you can always check with us and we can do a title search for you to see if we can point you in the right direction.
Until next month, I’ll leave you with this: “February is the month of lasting change. January is for dreamers… February is for doers!” -Marc Parent
That brings me to the conclusion for this month’s Las Vegas Real Estate update. Tune in next month around this time to see how the market has progressed over the entire month of February 2023.
Anna Klinger
REALTOR®, Property Manager, Broker Office Manager
Nevada Desert Realty, Inc.
BS.0144801.MGR
(702)509-1446
February 2023 ©
