New data published by the Greater Las Vegas Association of Realtors shows 10,000 single-family homes were on the market and by the end of November, 7,000 of those homes had zero offers, up 54% compared to 2017 and the highest number of homes in Las Vegas Valley to not get a bid in more than two years.
Realtors are warning Las Vegas residents that they should not panic.
It is becoming increasingly clear that the real estate market is at a turning point, in one of the most overvalued markets in the country.
“I mean that’s still crazy fast for markets across this country,” said Nevada Realtors newly elected president, Keith Lynam.
“Are we as fast as were six months ago? No, but we couldn’t sustain that, it was not sustainable, it was never going to be sustainable. So we’re back to pretty much a normal market.”
Lynam has recognized the shift in the market and suggested a slowdown in the quarters ahead: He predicts homes will now average four to six months on the market into 2019. Before, Lynam said homes were on the market between 2.5 to 3 weeks.
While thousands of homes are going no bid in November, some homes are still selling, but not as often as they used to, a sign that the housing market is headed for trouble. Buyers acquired about 2,300 houses in November, down 12% from November 2017, the Greater Las Vegas Association of Realtors (GLVAR) reported.
The pullback in demand could be linked to fast-rising home prices, higher borrowing costs, and an affordability crisis.
Home prices were up “13.5% year-over-year in September, more than double the national rate,” according to the latest S&P CoreLogic Case-Shiller index. Nevada’s growth rate was the fastest among all other cities in the CoreLogic Case-Shiller index for the fourth straight month, a move that is not sustainable.
In the last several months, sellers have responded with more price cuts.
This is right in line to Bank of America’s forecast in September: Existing home sales have peaked, reflecting declining affordability, greater price reductions and deteriorating housing sentiment.
This year’s housing market slowdown has hit the hottest markets like San Diego, San Francisco, Seattle, Denver, and New York City.
The slowdown is now spreading into less expensive markets—Tampa, Philadelphia, Phoenix, and Las Vegas.
Las Vegas was “the poster child of the housing crash in 2008,” said Vivek Sah, director of the LIED Institute for Real Estate Studies at the University of Nevada, Las Vegas.
“There are some buyers who are not pulling the trigger because of that.”
The deceleration in less expensive housing markets like Las Vegas, suggests that the slowdown is now broad base and the entire US economy is headed for trouble in 2019.