Limited Inventory Boosting Home Prices
As usual, supply and demand are key factors driving the forecasts and predictions for the Las Vegas real estate market in 2018. While prices are expected to rise more slowly next year, they will almost certainly continue moving north due to a relative supply shortage.
This mirrors trends happening all across the United States. In many real estate markets, builders simply cannot keep up with demand.
“We’ve been under-building for years,” said Robert Dietz, chief economist for the National Association of Home Builders. “That’s the reason that inventories are tight. That’s the reason that home prices are growing faster than incomes.”
In October, the Las Vegas real estate market had roughly a 2.6-month supply of homes for sale. That is below the national average, and even that is well below what is considered a “normal” market. Economists and housing analysts define a balanced housing market as having five to six months worth of supply. So the Las Vegas real estate scene is still fairly constrained, with available supply falling short of demand.
Real estate market activity can also be measured by looking at the number of days a typical home stays on the market, before going under contract. A low “median days on market” (DOM) suggests that homes are selling quickly. A higher DOM means that homes are staying on the market longer, which suggests a lower level of demand from buyers.
In October, the Las Vegas real estate market had a median DOM of approximately 55 days. That was higher than the national average. Some of the hottest markets in the country, like Seattle, Washington and Portland, Oregon, had a median DOM of less than 15 days during the same month. So perhaps the Las Vegas real estate market is slowing down a bit, despite the tight inventory conditions across the metro area.
The bottom line to all of this is that home prices in and around the city will most likely continue to rise over the coming months. All of the 2018 real estate market forecasts for Las Vegas that we have studied seem to agree that house values will continue rising (year over year). Despite this, demand for homes might be a bit softer in 2018 than it has been over the last couple of years.
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