Demand for Affordable Housing Is High in Las Vegas
The City of Lights may have plenty of bulbs, playing cards and poker chips, but one thing that is lacking in is a supply of housing for sale. The demand of affordable housing in Las Vegas is at an all time high, according to a report on October home sales from the Las Vegas REALTOR publication issued on November 6, 2020. The problem is that while demand is high, the supply is quite short. This is leading to more competitive bidding among buyers and many buyers getting priced out of the local market.
What Is in the October Las Vegas Housing Sales Report
The October 2020 report from the Las Vegas Realtor states that the median price for a single-family existing home sold in the Las Vegas metropolitan statistical area reached another al-time high record. That price was $340,200. This is nearly an 11% increase from October 2019.
Reasons Why Homes Are Selling for So Much Money
The low supply is the primary driver of higher home prices in the Las Vegas metro area. A local long-time real estate agent in Las Vegas also suggested that the high demand could be related to the COVID-19 pandemic. People who had planned to move to a cooler climate or travel may have had to readjust. People may be tired of renting and ready to buy. Delays in the spring and summer mean that the buying period has persisted well into autumn, which is unusual. Buyers want more space because many of them are working from home and have children who are doing hybrid or remote learning instead of in-person school.
Builders Are Not Keeping Up With Demand
Another reason why houses are reaching record-high prices in Las Vegas is that builders are not working at capacity. Although the number of permits has increased in the past couple of months, builders are still not able to build enough houses to meet the local demand. This adds to the price pressure. Builders are more likely to build larger homes that sell for more money than smaller homes that sell at more affordable prices.
Types of Housing Units and Their Prices
The prices of all types of housing units in Las Vegas and its metro area are on the rise. The prices for condos and townhomes were up by around 9% compared to October 2019. The median sales price in October 2020 was $186,500. In October 2019, the median sales price was $171,250. About 19% of the sales were for cash, which is slightly lower than it was one year ago.
Where the Supply of Housing Stands
There are currently about 4,000 existing homes, townhouses and condos for sale in Las Vegas and the metro district. About that many sold during the month of October. The number of homes is well below the ideal six-month supply that is considered by real estate experts to be a market in balance. The current supply is about a 1.5-month amount of homes for sale. The current market gives sellers the edge on pricing.
COVID-19 Impacts on Real Estate Transactions in Nevada
From March through September, Nevada Governor Steve Sisolak ordered the halt of open houses. This order was lifted for October. Once people were able to get into the houses for sale and take a look, this gave a boost to the local sales. It could also prompt more owners to list their homes for sale. However, as case loads of COVID-19 increase all over the country, including in Nevada and Las Vegas, people might not necessarily want dozens of strangers to parade through their home, especially if they are still living in it.
Potential Impacts of the 2020 Presidential Election on the Las Vegas Housing Market
As of Friday, November 6, Americans are still waiting on states to count ballots. Nevada is one such state where a lot of ballots remain to be counted. Most of those ballots are from the Reno and Las Vegas areas. Wall Street is excited about a Biden win because a GOP Senate majority will keep tax increases to a minimum and economic growth to a maximum. Several economic powerhouses, including Forbes Magazine and Wall Street analysts, have found that a Biden presidency would yield faster economic recovery and a higher GDP. If Congress can get another economic stimulus passed soon, housing prices and rates of sales could increase more.
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