Full Disclosure: July 2020 Market Stats
Funny how things happen. My last Blog Post was titled “Getting Back in the Game.” I then follow that up with a two month absence from the Blog. Whoops. Hopefully the information here makes up for my lack of blog updates lately. We’ve had a handful of changes here at the office in the last 7-8 weeks, all which are pushing us forward and will allow me to come up with even more content. So, for all 4 of you that like our blog, this is your lucky day! Without further ado… our Market Report for the Month ending July, 2020.
Note: As always, these Statistics are pulled from our MLS Statistics on August 5, 2020, so all information is deemed accurate but can change as agents continuously update the system. The data I pull is for SINGLE FAMILY HOMES only. If you would like a Market Report for Condos and Townhomes, please let me know!
Closed Sales
We finished the month with a bang! After a dismal second quarter, one of the worst we’ve had in years, July got us off to an incredible start, with over 3300 home sales for the month. To put that in perspective, at the low in May, we only had 1710. So in a matter of 2 months, we saw close to a 100% increase in the number of sales! In fact, we have to go back 37 months to achieve a level higher than 3300, when we had 3600 in June, 2017.
Much of the success in July stems from the market activity increasing dramatically since April 12th, when showing activity hit the bottom. Since then, we’ve raced back up significantly, leading to more Pending Sales and of course, closed Sales. Speaking of Pending Sales…
Pending Sales
Pending sales have been flourishing the last few months. Pending Sales are homes that have executed contracts between Buyer and Seller, but have not yet Closed. Thinking on an elementary level, Pending Sales must happen before a closed sale. And most homes are in contract between 30-45 days. So putting these pieces together, one would expect the Pending Sales to be ‘ahead’ of closed sales by about a month. Therefore, it should come as no surprise that the bottom of the market for number of Pending Sales was a month ahead of the closed, which would be April. And the chart and statistics prove this. We had 1696 Pending Sales in April which was a multi-year low for a month. But since April, we’ve seen dramatic monthly gains, finishing July with close to 3600 Pending Sales! Historically, we have to go ALL THE WAY BACK to March of 2012, 8+ years ago, to have a single month of Pending Sales higher than we saw this past month (when the number was over 4000).
Our Pending Sales are now up 15% over where they were last July, a good sign that our August and September Sales numbers will be strong. One thing to note, however. The change in Pending Sales from June to July was pretty minimal, flattening the curve if you will (whoops, did I use a COVID term?). This has a lot to do with our overall inventory levels, but also could be a normal and natural demand band. Regardless, 3600 homes going into contract in a 31 day calendar month is pretty significant. That’s more than 100 a day for the entire month!
Inventory Levels
The biggest play we’ve seen this year, and especially during this recovery, is the level of inventory. Demand is far outweighing the supply of homes, and that’s causing days on market to decrease, the number of available homes to reach rock bottom, and months of inventory to shrivel. All this will lead to increased property values (sales price), which is exactly what we’ve seen.
At the end of July, there were only 5660 Single Family Homes available for sale. That is 44% LESS than were available at the end of July last year, when we had over 10,000 on the market! Both in terms of percentage and pure number of homes, that’s a significant difference. We have to go all the way back to February 2018 to have a singular month with less homes available. Considering we usually have MORE inventory during the Summer Months, this is an interesting flip from the norm. The flip definitely has something to do with COVID, while the market has proven that people are back out, looking for housing, many sellers are remaining on the sidelines due to the Pandemic. For those that ARE putting their homes on the market, they are beginning to reap the benefits of less competition. We have seen an uptick in new listings the last few months, but we’re still seeing less hit the market than normal.
Months of Inventory
Our absorption rate continues to shrivel, proving once again the market is still very strong for the sellers that have put their home on the market, and priced it correctly (that’s the key everyone forgets). One of my favorite stats that shows the overall health of the market, Months Supply of Inventory is one of the inverse stats; the lower the number, the stronger the market. Ending July, we were sitting on only 2.1 Months of Inventory of Single Family homes in our MLS area (Clark County for the most part). That’s like 70 days. What that means is… from a statical standpoint, if we had NO NEW listings hit the market, the current demand for housing would wipe out all of our standing inventory in roughly 65 days! That’s it. A year ago, July 2019, we had 3.8 months of inventory. We are 45% lower this year. Combine with the increased number of sales we’ve had in the last couple months and it’s no wonder that homes seemingly go under contract in a matter of days.
Now, one thing I do want to say is that while the market is strong and seemingly skewed towards sellers, it does not mean by any stretch of the imagination, that there are not opportunities for our buyer clients. With mortgage rates at all time lows, this is one of those unicorn markets where Sellers are getting the price they want, but the market is holding strong, and Buyers are getting amazing rates on their mortgages.
Sales Price
Now for the main course, what you all came for… sales price. As I have mentioned before, I love a good number that looks strong, but honesty, I am more heavily focused on the statistics above. Yes, of course I pay attention to sales price, but I pay more attention to the other stats. Regardless, a win is a win, and that’s what I’m happy to report for July. Our Median Sales Price is $330,000 for Single Family homes. We have to go back… forever, to find a match on this. $330,000 is the All-Time one month value for single family homes. We are now up 8.9% since July of 2019, and even with COVID implications, we are up 5.3% since January 1st of this year!
To put this even further into perspective, we are up 25% in the last 2.5 years! We’ve had plenty of ups and downs, but the constant thing is the market is moving positively. We are seeing great year over year growth, knowing that we will have pull backs in pricing from one month to the next sometimes. Calendar year 2018 saw three months of dropped pricing and 2019 saw 4 months of dropped pricing. We are now 7 months through a tumultuous 2020, and we’ve had 2 months where pricing has dropped. So, we may see another drop or two to end this year, but the overall trend has been behaving positively, and looks to continue to do so. Remember, a lot of this does have to do with the Supply and Demand. I do not foresee supply to suddenly increase, keeping us in a demand driven positive market.
Final Thoughts
The Real Estate Market continues to be a source of optimism in an unknown world. At the end of the day, there will be expansion and contractions in the economy at large, being felt significantly here in Las Vegas. This news, while mostly good, doesn’t take into account the impact many of us have had in our lives. We do understand that there is more to housing than the economics of it. However, this too shall pass. Las Vegas, as a city, as a community, is a survivor. All the positive talk of the housing market is here, and soon again, the positive talk about job growth and prosperity will rise again as well.
If you have any questions on your Zip Code or Market specifically, please feel free to reach out to me and I can prepare a more detailed and customized report for you. Please click here to notify me:
Until Next Time… I promise to blog more!
-GZ