Housing Market - May Statistics
Signs of promise hit us in May. There are some lagging data and numbers of course, but plenty of great signs that our market simply hit the ‘pause’ button as I alluded to in a recent blog ( The Pause Button Blog ). Without further ado, I want to spell out the Housing Market Report for Las Vegas for May 2020, which of course had some bumps in the road, but is showing the signs we all are looking for!
As always, this is for SINGLE FAMILY HOMES ONLY! Data is pulled on 6/2/2020, so some numbers may vary as sales are finalized in the system.
Closed Sales
As I have mentioned several times before, Real Estate has both Leading Indicators and Lagging Indicators. Lagging are those that have happened in the past, and as such, closed sales are lagging. What has happened has happened. Additionally, as we know, in order for a home to CLOSE, it must first go into Pending Status. As we have discussed, since the shutdown in Mid March, showing activity dropped significantly (which has already picked back up, almost to last years level). Less showings = less pending sales = less closed sales.
We knew that April and May would be low in terms of closed sales. The data proved that correct. In May, we saw 1695 Single Family Sales, which was down from April, and down 48.5% since May of last year. That number is a multi-year low. Again, we knew this was going to be the case. The reasoning is simple and mentioned above. No showings = no pending = no sales. In order to look forward, we need to look at the LEADING indicators, which is showing activity. We know that has picked up dramatically, so we are expecting a big bounce back next month! 1700 Sales in a month is low, but not completely uncharted territory. In January of 2019, we only had 1830 sales. If I had to make a guess on what we see for June for Single Family Sales, I believe we’ll be above 2000 sales. Probably in the 2200 range or so. Yikes, making guesses a full 28 days before the end of the month. What could POSSIBLY go wrong?
Pending Sales
Now, this chart makes me feel ALIVE. I have been saying that in terms of showing activity, the market bottomed on April 12, and since then we have seen a huge rebound in terms of showings. Showings LEAD to Offers, which of course, leads to pending sales. And May’s numbers JUMPED up. Going back to February, the last month of ‘normal’ market activity, we ended the month with 2791 Pending Sales. We dropped dramatically in March and then again in April, bottoming last month with only 1740 Pending Sales. For May, we finished the month with 2851 PENDING sales, which is only down 10% from Last May! This is highest amount of Pending Sales for the Calendar Year thus far! That number, 2791, is only the ones that WENT into pending Status during the month of May. We currently, as a market, have 3555 Pending. Pending Sales lead to future CLOSED SALES, which again, is a good sign that our monthly increase of Closed Sales will continue to improve as we pull out of the Stay at Home order! This really is a good chart to show the strength of recovery.
Homes for Sale / Months Supply
I like to put these two together as always. The Homes for Sale chart is quite simply, the number of homes that are available, in Active Status, on the market as of the end of Day on May 31st. It’s essentially our standing inventory. The Months Supply is a calculation that shows how quickly the homes are being absorbed. We’ve discussed this a lot, so if you do want some info on it, please let me know!
We actually saw the overall inventory of homes available for sale DECLINE from April to May. This makes sense. We saw the dramatic increase in pending, yet not as many people put their homes ON the market, thus creating even LESS inventory than we had before. As of June 1, there were only 6682 Single Family Homes available for sale… in the entire Valley. That is not a lot. We have about 34% LESS homes available now as we did at the end of May 2019. And at the end of June last year, we had 10,204 homes available. That is close to 4000 FEWER homes available now than just 11 months ago! That is a big difference.
Buyers are clearly here, looking for opportunity, but we have fewer homes. This will lead to less supply as we see, and will help keep the price levels strong!
Now take a look at the Months Supply of Inventory. As I have said, nationwide, 6 months is considered a Neutral Market, with less than 6 being a Sellers Market, and more than 6 being a Buyers Market. I have also said that in Las Vegas, I believe a Neutral Market is actually between 4 and 5 months.
We are now sitting at only 2.6 Months of Inventory! That is a full 33.3% less than May of 2019, which was when we actually had hit a 3 year high in terms of inventory when it was sitting at 3.9 months. The two charts, as you can see, follow a very similar pattern.
Sales Price
Sales Price is always the one that appears to be the most popular, yet really shows the least amount of relationship to how the overall market is performing. We look at the Median Price, which of course is the middle if you happen to put all the prices in order of lowest to highest. The reason Median is used is because it eliminates outliers (a $10,000 sale and a $30,000,000 each effect the Mean (or average) price dramatically).
We started 2020 at $313,000. We actually dropped down to $305,000 by the end of January, then we worked our way up to $319,000 in March. By April, we were down to $310,000 - still higher than we were on February 1st, and a tad down for the year.
May proved to be a ‘winning’ month in terms of values and we ended the month at $315,000! That’s right about $2,000 HIGHER than we were to start the year, about $10,000 higher than we were on February 1, and $4,000 LOWER than we were at the end of March. This is why I always say this statistic is not as important, but people do love it. We’ve rocked back and forth this year. So at $315,000, we are 5% HIGHER than we were in May of 2019, and less than 1% higher than we were on January 1st. But we are back in POSITIVE territory for the year. Home prices have HELD! How?
As I said, a lot of the value is in Supply and Demand. If there are not that many homes on the market, our inventory levels are low, and Demand outweighs supply. This has been what we have been seeing, right? The big thing is Buyers left the market for about a month, and are now coming back, and coming back strong. More buyers have come back INTO the market than Sellers have so far, creating a positive impact for pricing, which is helping sellers. If you are thinking about selling, NOW is an ABSOLUTELY AMAZING TIME TO SELL. Buyers are thirsty for inventory, and you are not competing with as many sellers!
More Quick Stats (No Charts)
Days on Market:
Median Days on Market = 18 Days - 28% less than May 2019, but up 5 days since last month. Homes are still moving very fast, but are starting to sit a bit longer.
Average Days on Market = 37 Days - 17.8% less than May 2019, and lower by 1 Day since last month. Remember, this includes ALL homes, including the ones that are multiple millions of dollars. Generally speaking, those homes take longer to sell, so that is why the number is about double over the Median.
Percent of List Price:
Median Percent of List price - 99.3%. This is up a tad (0.3% over May 2019) but down from 99.6%. Overall, this shows homes do sell for VERY close to what their final list price was. Please note, this is the final list price, not the original list price. That would be a better stat, but not one that is tracked, unfortunately.
Average Percent of List Price - 98.3%. This is almost flat from last year (-0.2% from May 2019) and down from last month when it was 98.6%. But over the last 3 years, the number has never been lower than 98.2% and never higher than 99.4%, again, showing that homes sell VERY close to their asking price!
Looking Ahead
For June, I expect to see a multi-month high and rebound in terms of Closed Sales! We saw 2 months of really low sales due to the fact that people were not leaving their homes. As more and more businesses open and more and more people adjust to the new normal, we have seen showing activity significantly increase as well as Mortgage Applications (Leading Indicators Blog ), leading to believe my expectations will indeed hit.
I would expect more inventory to hit the market, but with the number of Buyers out there and the Demand at what it is, I would not expect the OVERALL number of homes to be SIGNIFICANTLY higher than it is right now. We will see an increase, but I don’t believe we’ll have standing inventory of more than 7500 or so (we’re at 6800 now).
For price, I see that up-ticking as well again! As crazy as it sounds… I would not be surprised if the number didn’t approach the $319,000, that was our high in March, and our MULTI-YEAR (All Time) High.
What do you think? Would LOVE your comments below!
-GZ