The Las Vegas real estate market continued to accelerate through April, 2018 with price increases that exceeded any other metropolitan area nationally. From May on, however, the market has been relatively flat. New home construction increased. Approximately 10,000 homes were built in 2018. That figure is high relative to the past few years. Keep in mind though, that at its peak in 2006, over 35,000 homes were built.
Also keep in mind that prices are really nowhere near the actual prices at the peak of this market, in July of 2006. At that point, the median price for a free standing home was $319,000. The present median price is $295,000, but adjusting for inflation, that $319,000 figure would now be $400,000. Using this assessment, prices are still 33% below that 2006 all time high.
Comparing December 2017 with December 2018, inventories of homes for sale are up in 2018 and sales are somewhat down. This is another indicator that prices are stabilized as opposed to last year this time when we were still, for a few months, in a strong seller’s market.
The conventional wisdom suggests that interest rates will remain low with a slowdown of the economy in either 2019 or 2020. I think both buyers and sellers will factor this into their decision making over the next couple of years. I think it is safe to assume that the substantial price increases of the past 6 years will not continue into the near future. On the plus side, the addition of two major league sports teams should be of considerable economic benefit into the future.
Las Vegas is essentially a “factory” town. The product sold here was at one time gambling. Now, it is a combination of gambling, shopping, dinning and entertainment. It is not economically diverse. As such, it is highly dependent on discretionary income. If times are good, people are much more likely to come here and spend their money. As such, the real estate market here is highly susceptible to which way the economic winds are blowing. Many of us living here do not feel much “connection” with “The Strip”, as such. Our property values are, however, very much tied to its continuing success.