Posted January 11, 2023 in Market Update / Newsletters
Happy New Year, 2023! A new year is here! New hopes, new goals, new meaning, new opportunities! It’s the time of year to really feel inspired by all the “new” that can be simply triggered by mindset, when it’s really just a flip of a page in our calendars. Fun Fact! Did you know that many many years ago the new year actually started in March, named after Mars!? But now we have 365 days in our years (except for Leap Year when we have 366) and celebrate on January 1st. Let’s make it a GREAT 2023 YEAR!!!
MARKET UPDATE: Rates had some slight increases and decreases last month and then dropped slightly again last week. We are currently toggling around 6.25% – 6.5% with all variables being considered such as primary residence, investment property, type of loan, credit score, etc. Median sales price for December, 2022 was $420,000, which is now $10,000 lower than the median sales price in December, 2021. Generally speaking, this means all the equity homeowners gained in Q1 & most of Q2 in 2022 has gone, and then some, equating to a 13.403% drop since the peak in May, 2022. This year is when you’ll start seeing stats finally publicized in the media which will align more with the information we’ve been giving you the last several months. The majority of media sources use YOY (year over year) stats, not data on a month-to-month basis. The Las Vegas Review Journal, for example, last week published that homeowner’s lost all their equity gained last year – sounds like a big impact, right!? But, you’ve been watching the pricing with us, so the “hard hit” media sources are showing has actually been trickling down each month just like the rain we’ve been recently having. What’s that? RAIN!!! Yes, rain!!! WOOHOO!!! Guess what else has been trickling down – inventory! That’s right! Just as I’ve indicated to you for the last several months, sales inventory is decreasing (rental inventory is now leveling off), and this month for January, 2023 was no exception. We are currently sitting right under 6,500 single family homes on the market for sale. This is around 9 straight weeks of sales inventory declines, which brings us closer to an inventory level of December, 2019 before the pandemic hit (interesting, huh!?). In a “normal” sales market our inventory would equate to around 2 months +/- or so of inventory, but because sales and absorption rates are down we are actually at more around 5+/- months of inventory. The homes that are selling & renting (absorbing) fastest tend to follow the following trends: highly upgraded; single stories; homes with pools, or are priced 20-25% below what the peak was.
Not to fret, we are approaching that time of year where the market picks up. Which means more buyers will be entering the market. If I had to guess at what we might see, I would anticipate inventory to start increasing as the holidays are now over and we should see more buyers enter the market. Especially if rates continue to decrease slowly. What I am concerned about most recently is all of the thousands of layoffs we are seeing nationwide. This will increase the unemployment rate, but remember that an increase in unemployment rates was also part of the Fed’s plan to help reduce and counteract inflation. We’ll most likely see values continue to decline until rates start to approach more of a 5 – 5.5% range &/or values decrease to 20-25% since the peak. If rates and values continue to drop as they have been over the last 6 months, we should be there by late spring/early summer. The other factor that will come into play will be election campaigning, as it ALWAYS does – and this upcoming election for 2024 that seems so close, yet so far away will be no exception.
Another fact is that 600+/- more homes rented in December, 2022 compared to December, 2021 (that’s another interesting number because what that tells me is that more people are renting than buying) – something else I anticipated 6 months ago as people wait in anticipation on the sidelines before entering the buying field.
Sales Stats for December, 2022: Sales dropped again to 1,277 homes, and median price dropped another $5K to $420,000 down 13.403% since from the May, 2022 peak. This has us with around 5.09 months of inventory and an absorption rate overall of 21% (properties under contract vs. listed). Interestingly enough there were 2,977 home sales in December, 2021 creating a 57% +/- decrease in sales Year over Year – this is more along the lines of what you’ll see and hear making it seem like the market has dropped this drastically, but it hasn’t dropped that much in values only sales and as we know supply and demand go hand-in-hand, and demand is low right now.
Rental Stats for December, 2022: The median rental price dropped another $25 to $1,900 in December, 2022 compared to November, 2022 and vs $2,337 in June, 2022. 1936 homes rented in total. Average days on market made quite a leap to 40+/- for Dec, 2022 compared to 15-20+/- during the summer of 2022 (to be expected during the holidays). Our inventory remains about the same as last month at around 4,400 homes equating to still around 2.27 months of rental inventory.
Owner Tip of The Month: Did you know that you can now set yourself to be alerted if anything is recorded against your property? It is a free service now being offered by the Clark County Recorder’s office. If you don’t know your parcel # you can find it on your property tax bill or you can ask us to look it up for you. Follow this link to register https://recorder2.clarkcountynv.gov/PublicRecordsNotificationWeb/Subscribe
Until next month, I’ll leave you with this… “You can get excited about the future. The past won’t mind.” – Hillary DePiano
Nevada Desert Realty, Inc.
January, 2023 ©