August 2020 Housing Market Update
And just like that… school is back. Kids are out of the house, and cool weather prevails…
Oh wait, it’s 2020. Kids are at school, and while we had 2 days of cooler weather, we’re still in the throws of Summer. And just like this Summer has been one for the record books (in so many ways), so to was the month of August in terms of Real Estate in Las Vegas. Without any further ado, our August Market Report.
*As always, statistics are from Las Vegas Realtors (LVR) and these stats ONLY include Single Family Residence statistics. For Condos and or Townhomes, please contact me directly here:
Sales
August saw a dip in closed sales volume, compared to our amazing July. July had over 3300 single family sales, and we saw a slight retraction in August, finishing the month with just over 2900 sales. That drop off is a good sized drop-off, but it is fairly in line with last August, down about 8.4%. While this is a significant number, it’s nowhere near the drops we had as compared in April - June (aka Q2). In fact, if you look at the three year chart, our sales number of about 2900 is right in the top 1/3 of all months, so still a good strong showing. This is of course due to the pent up demand we saw during the COVID slowdown.
We do generally see a drop during the last 4 months of the year, so I wouldn’t be surprised to see the number for September to fall below 2900. September 2018 had only 2435 sales and September 2019 had about 2700 so a number in this range would NOT be out of the ordinary.
Pending Sales
While closed sales took a slide, Pending Sales continued to SURGE! We ended August with 3516 Pending Sales, the highest single month in over 8 years!!!! Our peak sales month of the year is usually the March - May timeframe. So the fact that we are delayed on this makes sense considering we did have about 6 months of little to no activity, and then further time of increased but below normal activity. To put this in comparison in our market; April had 1690 homes in Pending status… we are now 2.5X that amount just 4 months later! 3516 Pending Sales is about 18% higher than last August.
As we head back into ‘school’ mode for many, even with remote learning, I wouldn’t be surprised to see this number begin to tail off but we are still way above the norm for this time of year. Much of this demand in Pending Sales is due in large part to the RECORD LOW interest rates we are seeing. With rates hovering BELOW 3%, Buying Power has never been higher. It is a GREAT time to purchase, and buyers are taking advantage of this market!
Homes for Sale
This is the number that is driving much of our market right now. We simply can’t keep enough homes on the market for sale. We ended August with 5801 homes on the market. That’s it. To put it in perspective, in June of 2019, there were over 10,000 for sale. We have 42% less homes available compared to where our market was last August 31st. This is driving our inventory to sell quickly and continue to push pricing higher.
I do not see an end in site to our inventory levels. With record low interest rates as I mentioned above, buyers are taking advantage. Also, inventory is generally cyclical, so we usually see inventory DECLINE further during the last 3-4 months of the year. I would not be shocked if this number got lower, not higher, in the coming months. This provides a great time for a Seller to take advantage of a market. You have less competition, buyers are borrowing cheap money, and deals are getting put together quickly. If you want to take advantage of this market, let us provide you with an Almost Instant Home Valuation and discuss our strategies to get you top dollar for your property in record time.
Inventory Levels
Speaking of homes for sale, we currently now only have 2.2 Months of Inventory. For those that read our stuff, you know this is my favorite stat and chart. It shows the overall strength of the market. For Las Vegas, I say anything in the 4-5 month level is considered a neutral market. We’re half that. This shows that Sellers do have an advantage currently over Buyers. However, I also believe that with interest rates as low as they are, this is still an opportune time to purchase.
For the actual number, 2.2 months equates to roughly 66 days. That’s it. If we stopped listing homes, the entire market, theoretically, would evaporate in that timeframe. Nationwide, 6 months is considered neutral, 4-5 in Vegas is considered Neutral, and we’re at 2.2 Months.
Sales Price
The ‘sexy’ number everyone pays attention to is price. We closed August with a RECORD high price level of $335,000, a 9.8% increase from a year ago. and about $22,000 more than what we started the year at! Pricing is an effect of supply and demand. As we have discussed, supply is at all time lows, and demand is high, due in part to record low interest rates. I don’t see rates going higher much in the coming months, nor do I anticipate inventory (supply) to drastically increase either.
I do not believe $335,000 is a fake number, nor something that is necessarily a peak. But remember, we’re also not trying to ‘day-trade’ the real estate housing market. There are plenty of opportunities to make great buys in this market, and of course, great time to free up cash and liquidate, or even upsize or downsize into a different home. It’s really all about what you’re trying to do. Have any questions on this? Let’s put together a quick consultation and get you the answers you need to make the decisions for YOUR financial wellbeing.
Until next time,
