For the first time in several years, Las Vegas area home builders are constructing large numbers of new houses across the valley. That’s mainly due to higher homes prices (we saw a 23% price increase last year) and an improving local economy. It’s also due to the fact that Southern Nevada’s population is still increasing at a steady clip, and many new residents prefer new construction homes over resales.
Interestingly, the mini building spree is focused around higher-end homes priced above $200,000 — well above the valley’s current median home price of $185,000. The new homes are selling very well as people are looking to upgrade from the “starter homes” which were built in huge numbers in the early 2000’s. According to UNLV economist Stephen Brown, home builders who focus on higher-end construction projects are “not really competing against a big inventory of existing homes” because most of the current inventory consists of smaller entry-level homes.
According to the Greater Las Vegas Association, the areas with the biggest growth in buyer demand are Green Valley (Henderson) and Summerlin, on the western edge of the valley.
As long as the local recovery continues, many experts expect Vegas home builders to start and re-start even more construction projects around town. New buyers, “upgraders,” and people looking for second homes should continue to keep demand strong for newly built homes.
The good news for people wanting to buy a Las Vegas home is that they now have more options than ever!
Everyone knows that with sales, supply and demand helps with determining the pricing of goods. Whether you’re a vendor selling the best hotdogs on the street corner or your name is Spacely and you’re selling sprockets, the fact is that if you have more of a product than there are buyers, an increase in the product’s value can stall. On the flip side, if there is less availability of a product and too many buyers, your sales can explode allowing your prices to increase higher and higher!
These same principles apply in my field of Real Estate. Just as I noted in my last blog, after an extreme shortage of homes available here in Las Vegas (less than a one month surplus of available homes), our home inventory has nearly doubled since the beginning of summer. It’s caused many here locally to wonder if we’re heading for another “bubble” and if we can expect prices to drop. I chalk this up to an overreaction by those who are unfamiliar with the fact the prices have just temporarily stabilized after a recent flood of homes being listed for sale. This started with the slowdown of investors gobbling up homes to rent out and the combination of current homeowners deciding that the time was right to sell with the property values increasing.
Another key factor is that historically the beginning of Fall through to the Winter months is the slow time in real estate. During these seasons a lot of families have already settled in to their current residence and are not looking to relocate during the school year. However many are forced to move for a new job, outgrew their existing home, are done renting and want home ownership, etc. There is still plenty of movement happening….especially with the continuation of ridiculously low interest rates!
The recent article I read on www.vegasinc.com shares my opinion. You can read it here:
The key thing to remember is that we’re still at a National Shortage for inventory and homeowners have priced their homes accordingly because of that. It’s just instead of a home being on the market only a few weeks before getting an offer, it’s now slightly longer as long as the price is realistic and within reason. There will always be buyers and sellers. It’s just a matter of realizing who benefits from the current “supply and demand” situation.
To find out if you can take advantage of the current situation to buy or sell, contact me today to get started.