Hello and Happy May 2023! May flowers are officially here and in abundance this year. If you have not had a chance to check out some of the images from space that have spread throughout different areas, you should definitely google some of these images and prepare to be awed. Such beauty the much-needed rain brought to us this year and I am also thrilled to tell you that it looks like we will also be getting some added footage of much-needed water filling Lake Mead as a result. Lake Powell has already begun receiving much-needed fill from melting snowfall, and Mead is rounding the corner – hooray!!! We have much more to go but are off to a good start!
FUN FACT: May was named by the ancient Greeks giving it her name after Maia, the goddess who was revered for growth and fertility. May is the only month whether it begins and ends the same day of the week.
MAY, 2023 MARKET UPDATE:
Well, can’t say I’m surprised – it is Vegas after all. I have always said the Las Vegas Real Estate market is just like the weather… cold during the winter, and hot during the summer! Here we are on the verge of summer and the market is heating up just as the temps are. Inventory has continued to decrease and even though the number of sales are down nearly 40% in comparison to a year ago, we are seeing multiple offers because inventory is low, yet again. It’s quite strange because we are now seeing multiple offers again on properties, especially properties under $500K; however, sales are down. Not as many buyers are entering the market as there typically are this time of year, and not as many homes are hitting the market either. We’ve in fact had nearly an 18% decrease in sales from March 2023 to April 2023 alone. The rental market is also picking up again as well. Pricing of rentals isn’t as high as it was last year and we aren’t receiving 10+ applications on homes; however, the market is moving again, our inventory isn’t sitting as long as it was, and the median rental price has increased by $95/month for the first time in 5 months.
Meanwhile, another bank’s failure is concerning. The CPI report also showed improvements overall for inflation, but we are still showing a solid employment ratio. Rates are still in the mid to high 6% and I see a lot of home buyers still in a position where they’re unable to afford the payment for the type of house that they need or want. It really boils down to payment for most homebuyers, the pricing and rates are the factors to what that pricing is but at the end of the day, borrowers want to know how much is coming out of their checking account each month. The national debt is one thing as we all know printing money at this level over the last several years now is never a good idea; however, the household debt is something I have realized for the past 6 months now is also an issue. As prices of everything have risen, people have turned to their credit cards and lines of credit to be able to afford to literally live. As debt is increasing, defaults are becoming more and more prevalent. Which brings me to the biggest number for this month’s update which is 50,000. Nearly 50K homeowners in Clark County are now under forbearance with their mortgage loans! That means people are in default and they’re working with their mortgage lenders on re-payment plans, reduction in payments, or some sort of restructuring. This is a huge number as we have around 815,000 homeowners in Clark County and generally speaking, 30% of those homes are held free and clear, so that means 6% of the overall homeowners are in default, and almost 9% of the home loans issued are having trouble making their mortgage payments. That means people are stretched to the max and they cannot afford to live. More importantly, that is going to have a trickle effect on the investors who have their money tied up in mortgage-backed securities. This is another reason why with banks failing and other investments not doing so well in the stock market, you are seeing more and more people who have money put their money into one of the best investments you can make during a recession – real estate! What I’ve been learning and hearing is that banks, investors, and mortgage insurers do not want to see what happened in 2008 repeat itself with the massive amount of foreclosures so they are doing their best to have learned from their mistakes and work out forbearance agreements as best they can with as many borrowers as possible. The reality is that this is one contributing factor to our inventory shortage.
Builders have started building again and pulling more housing permits, so this means construction has also picked back up again. It will be interesting to see how sales look in the upcoming months as far as number of sales are concerned. The reality is that it has been so many years now (since 2019) since we have seen a “normal” amount of inventory and sales, so maybe this reduction in inventory and sales is the “new norm.”
SALES STATS FOR APRIL, 2023:
Homes Sold = 1,964 (a 16.86% decrease from March 2023)
Median Price = $429,000 in May 2023 (up $4K from March 2023)
Average Days on Market = 55 DOM remained steady from March 2023
Months of Inventory = 3.58 months of inventory, increased from April 2023
Absorption Rate = 41.28% absorption rate
Current inventory = 7,039 homes (decreased by 76 homes since April 2023)
Under Contract = 2,906 (small jump in the number of buyers buying, but inventory has decreased slightly)
| Statistic | Value | Change from March 2023 |
|---|---|---|
| Homes Sold | 1,964 | -16.86% |
| Median Price | $429,000 | +$4,000 |
| Average Days on Market | 55 DOM | Steady |
| Months of Inventory | 3.58 | Increased |
| Absorption Rate | 41.28% | N/A |
| Current Inventory | 7,039 | -76 |
| Under Contract | 2,906 | Small jump |
RENTAL STATS FOR APRIL, 2023:
Median Leased Price for a month prior = $1,995 (increased by $95 for the 1st time in 5 months)
Properties Leased Month Prior, April 2023 = 2,122 (16.32% decrease from March 2023)
Average DOM = 23 (15-day decrease since March 2023 – HUGE IMPROVEMENT!)
Current inventory = 3,696 (only down 53 units for rent from April 2023)
Under Contract = 662 (17.82% increase in properties being reserved since April 2023)
Months worth of inventory = 1.74 months
Absorption Rate = increased to 17.91% (increase by 2.88% since March 2023)
| Statistic | Value | Change from March 2023 |
|---|---|---|
| Median Leased Price | $1,995 | +$95 |
| Properties Leased | 2,122 | -16.32% |
| Average DOM | 23 | -15 days |
| Current Inventory | 3,696 | -53 |
| Under Contract | 662 | +17.82% |
| Months of Inventory | 1.74 | N/A |
| Absorption Rate | 17.91% | +2.88% |
Well, 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 May 2023.
Until next month, I will leave you with this, “Enjoy the little things, for one day you may look back and realize they were the big things.”
Anna Klinger
REALTOR®, Property Manager, Broker Office Manager
Nevada Desert Realty, Inc.
BS.0144801.MGR
(702)509-1446
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