APRIL, 2023:
Hello and Happy April 2023! I hope that you had a wonderful Spring Break and Easter with your loved ones and are enjoying this awesome Spring weather as much as we are! I am filled with joy each morning as I hear the birds serenading us with their opera vocals. The air is filled with delight and the vibrant colors of all the new life around us, from the surplus of rain we’ve had, have my eyes triggering thoughts of pleasantries and awe. I cannot remember the last time I have seen so much green everywhere! The sun is setting later and we are in full swing of “saving daylight,” which is a nicer feeling knowing you beat the moon home.
FUN FACT: The word “April” comes from the verb “aperire,” which means “to open.” Quite fitting and well-chosen for a season when the trees and flowers begin to “open” and bloom. The long-told saying, “April showers bring May Flowers,” should also have you looking for meteor showers that appear yearly between 4/16 – 4/26… I know Michael Klinger will be out with his camera at night trying to see what he can capture!
I can hardly believe that summer will be here before we are ready to take on her heat…
APRIL, 2023 MARKET UPDATE:
Are we in/headed for a recession or did the economy “leap” into Spring just like everything else that’s growing from the winter rain & snow? Mortgage rates have come down slightly and we are toggling now around the mid to low 6%. We are expecting the CPI report to come out on inflation this week so that always brings interesting havoc in the media. The 5/10/2023 release is where we should really keep an eye on what is being reported. Silicon Valley Bank and Signature Bank collapsing really caused some stress in the marketplace. Interestingly enough we have seen some jumps in the cash buyers and I think that banks failing may be a contributing factor to that. I have family & friends who were personally affected by Silicon Valley Bank’s failure, but from what I heard it seems as though the Feds jumped in quite quickly and tamed the waters, making everyone whole again. It definitely brought back some WAMU 2008 memories.
Here we go again with the roller coaster ride of Supply and Demand! We have a low supply again in single-family homes for sale and reduced inventory again in rentals (entry & median prices), and guess what that translates to? Higher demand in entry-level & median-priced homes! Freddie Mac recently estimated that the housing deficit is over 3.8 million units nationwide, stressing that more entry-level housing is needed. One thing that many people aren’t considering as well as the reduction in new construction during the 5-year stint between 2007 – 2012 which has had a direct impact on housing inventory today. However, there has been an uptick in Multi-Family buildings which is showing downward pressure on rent prices for apartments. Apartment prices have increased so much that single-family homes are much more appealing now, as you can get “more bang for your buck!” This could be a real benefit to all of our property owners in these upcoming months.
Debt continues to be a real problem and only seems to be getting worse. As more and more people are defaulting on loan payments, we are being even more cautious of evaluating debt-to-income ratios and on-time payments as we review rental applications that come in for our available rentals. Banks are resetting loans, forgiving partial balances, and working out payment options and/or deferments for borrowers to try and retain the credit line and the customer and prevent total default. The other big reset coming to a head is the student loans that were deferred in 2020 that the CARES Act froze payments and interest accrual on. Borrowers on these student loans have not been required to make monthly payments and those days are now expiring. This is part of the reason that the Biden administration introduced the $10K and $20K federal student loan debt forgiveness, which may not even go into effect until June 2023 or later (depending on whether it gets passed or not). The Federal Government holds approximately $1.6 trillion in student loan debt which is distributed over 44 Million borrowers. Why does this matter? Well, according to the National Association of REALTORS®, 43% of home purchases in the United States were accounted for by millennials and 10% by Gen Z, which combined amounts to more than half of all home purchases. This is part of the reason why Gen Z (born between 1997 and 2012, ages 11-26 years old) are buying investment properties before they buy a primary residence so they can rent the property out while they continue to live with relatives or roommates at a reduced cost of living (amongst other reasons of course, too!)
The market is in a more “normal” state now than it was during the Spring of 2022 when we had 10+ offers on a home. The majority of homes still sitting on the market are just flat-out overpriced or have something deterring a buyer from purchasing it. The same goes for rental properties, Landlords demanding last year’s prices are sitting on the market and not getting rented and the fact of the matter is that $100-$200 less per month is more often than not a lot less of a hit to the wallet than sitting on the market for 1-2 months vacant.
The numbers show buyers are continuing to enter the market, with a 27.15% increase in sales during March 2023 compared to February. The median sales price actually leaped up by $10K to $425,000! Our absorption rate increased slightly as well. We saw another slight decrease in rental inventory again in March 2023 – but I have noticed rental inventory already starting to pick up even though we aren’t even through mid-April yet. We are continuing to see properties both for sale and for rent sit if they’re not in line with the current market.
Spring is bringing both buyers & sellers out into the market. I have already seen an increase in new listings hitting the market this last week, so if that trend continues it will have a direct effect on the market inventory.
The rental market stayed about the same overall. However, we are starting to receive more inquiries and applications from those who got a head start in Spring. Tenants are definitely wising up to the market and it shows. The median rental price remained steady at $1,900/month, and days on market decreased slightly to 38 days.
The next two paragraphs are stats I pulled on the local market, directly from our MLS through the Las Vegas Association of REALTORS® for March 2023.
Sales Stats for March 2023: Sales increased by 27.15% to 2,365 homes, and median sales price INCREASED $10K to $425,000 from the month prior at $415,000. The reduction in inventory has us with around 3.04 months of inventory and an absorption rate overall of 38.36% (properties under contract vs. listed). The average days on market for the Las Vegas Valley single-family homes sales market is approximately 55 +/- days, a small decrease from the month prior. Our sales inventory slightly decreased since last month and we are sitting at around 7,100 +/- homes on the market, with approximately the same amount of 2,700 +/- homes under contract.
Rental Stats for March 2023: The median rental price for March 2023 stayed the same as it did for the last 4 consecutive months at $1,900 ($2,337 in June 2022). 2,536 properties were leased in March 2023 compared to 2,083 homes in February 2023. Average days on market for rental properties decreased slightly from the prior month to 38+/- days for March 2023 (compared to 15-20+/- during the summer of 2022). Rental inventory in the Las Vegas market decreased again by another 5.43% from the month prior to approximately 3,643 +/- properties on the market equating to around 1.43 months of rental inventory. Our absorption rate in the rental market decreased though to around 15.03% (reserved rentals, vs current inventory).
Overall, both sales and rental markets are starting to be in a more “normal” range which is optimistic for the remainder of Spring as we head into Summer.
That brings me to the conclusion for this month’s Las Vegas Real Estate update. Tune in next month to see how the market has progressed over the entire month of April 2023. Until next month, I will leave you with this Spring quote: “Your mind is a garden. Your thoughts are the seeds. You can grow flowers or you can grow weeds.” ~Unknown
Anna Klinger
REALTOR®, Property Manager, Broker Office Manager
Nevada Desert Realty, Inc.
BS.0144801.MGR
(702)509-1446
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