Southern Nevada Market Update including Las Vegas, Henderson, North Las Vegas and surrounding areas:
Past 7 days we have seen 666 New Listings as of today, with 1,195 properties going under contract. 811 properties have closed as recorded.
This means homes are selling much faster than they are coming on the market, which is why our inventory continues to shrink. We have about a 2 weeks supply on inventory. A 6 month supply is considered an even market, but in my opinion, I think a 4 month supply is an even market.
As i’ve discussed on a previous investing in real estate video, a better figure to use is the absorption rate figure. The absorption rate figure is a a metric used in the real estate market to evaluate the rate at which available homes are sold.. It’s simply supply and demand.
To figure this calculation you will divide the total number of homes sold in a specific period by the total # of available homes.
A healthy, sellers market will be 20%, meaning all of the supply of homes will be absorbed within 5 months, below the mark of a 6 month even buyers & sellers market. I will run an updated national absorption rate when the most updated numbers are populated.
Rates over 20% indicate a hotter real estate market with rising home demand and home prices.
So today, I ran an updated absorption rate over the last 30 days in my market which is Clark County, Nevada.
The numbers are staggering.. We currently have 2,756 active single families, townhomes, manufactured houses, and condos, There are currently 263 high rises actively on the market and 43 multi families.
The last 30 days have been a total sold of 3,307 single families, townhomes, manufactured and condos as 78 sold high rises with 33 multi families.
Combining all of these numbers together we have a total of 3,418 properties closed with 3,062 actively on the market. .The absorption rate figure is a staggering 111.63%.. Supply continues to shrink, and there are now 8 agents for every one listing in our market. So if you’ve been sitting on the sidelines considering to sell, this might be the absolute best time to get in as we see a rush of buyers trying to beat the rising mortgage rates.. Soon, buying power of financed buyers will be less.
So let’s get into the market updates from December 2020 to December 2022. I want to thank Driggs Title for supplying my team with this information each month.
Let’s first discuss home loans and mortgages per Zip Code
As you can see on this chart per zip code, we have the total number of sales per zip code and the average price of homes in that zip code. On the low end of the range we have 24% loan to cash ratio but that is a small sample size of 4 loans to 7 cash purchases in the 89018 zip code. On the highest of you have 1 property sold in the 89004 zip code and 89007 zip code, and one was cash and one was financed respectively, so it’s safe to say with those low numbers, we can count those out.
The majority of zip codes are in the high 50s to low 70 percentages.. We are seeing much more cash in the market, as norm oranges are about 75% loan to cash ratio.. This means there is a TON OF CASH in the market.. I am seeing bank statements in the 100s of millions from corporations who are purchasing residential rentals – as many as they can get their hands on. This is hurting first time home buyers as the only people who can compete with this type of cash are homeowners who are cashing out their equity position and have cash to play with.
Moving into the mortgage share of clark county in December of 2021, this report includes the lenders with the most SFR, Condo and Townhome loans. As you can see the top of this list is Rocket Mortgage blasting to the top of this list with 829 loans or 7.62%. Second place is Freedom Mortgage with 411 loans or 3.78% market share and loanDepot is third with 398 mortgage or 3.66%.. At the bottom of the list are FBC mortgage with 45 loans, Federal Savings Banks with 44 and Mutual of Omaha Mortgage with 43.
Taking a look at the single family market condition report, we can see appreciation in the median price of homes every single month from December 20 which was sitting at a median of $340,00 and now up to $415,000. Currently we are at a median price of $420,000.
Resales dominate the total sales with 3,81, and new builds coming in second at 286 total sales.. There were 4 short sales, 16 Trustee’s Deed and 31 REOs. Banks filed 152 notice of defaults. A notice of default is the first step a bank or mortgage lender takes to start the foreclosure process. Most of the time this process begins after 180 days of missed payments and delinquencies before this process is started. There were 62 notice of sales on distressed properties in December of 2021. Once you receive a notice of sale, this means the bank or lender has a date, time and location of a foreclosure sale.. The good news is that many home owners have equity and can usually walk away with some cash, so it’s a good idea to contact an agent who is has a short sale and foreclosure accreditation (SFR designation)(, like myself and see if they can work with your bank to satisfy the delinquency.
Let’s look at the past 3 months of Notice of Default activity.. In October of 2021 we had 191 total and 190 in November. In December of 21 we saw 152, which shows a decline. However, with the holidays and banks being a little more relaxed at the end of the year, I am interested to see what the January 2022 numbers look like.
Notice of Trustees Sale Activity going back to October 2021, we see 48 total and 50 in November of 2021. December had 62 notice of sales, so we see this trend increasing. As we know, the crash in 08 was due to subprime mortgages that people couldn’t afford, and people were underwater. This time around, it’s much more difficult to obtain a mortgage and homeowners have more equity in their homes, so seeing a crazy amount of foreclosures and short sales in highly unlikely at this time in my opinion.
Taking a look at the investor report from Clark County December 2021 of Single Family Residences… Home purchase refers to buyers intending to live at the property.. Investment purchase refers to owners intending to rent or flip the property. Percentage of investors refers to owners with a history of investment.
As you can see, the investor purchase percentages are very high in many of the zip codes. .If you watched my video on Is Real Estate a Hedge Against Inflation, you will know why there is so much cash and investors in the market.
Circling back to single family inventory. You can see in December of 2020 we had 7,462 single families homes on the market and in December we had 5,710 with a median price of $425,000.
Most homes in this market are selling within 30 days.. IF homes are on the market for over 30 days in these conditions, that means the home is too overpriced for the condition of the home. Listings on the market over 30 days in the market are CONSIDERED DEAD.
Let’s close our monthly market update with year over year single family appreciation from end of year December 2020 to end of year December 21.
The highest appreciated zip code is 89109 coming in at 29%.. This is the resort corridor, and consist mainly of high rise living. Downtown las vegas and more urban areas saw appreciation from 9% in the 89106 to 11% in 89104. Summerlin saw appreciation from 15%-23% while Henderson saw appreciation from 14% – 22%.
North Las Vegas saw appreciation range from 9% to 17%. The northwest part of the valley saw 14% – 21%.. The Southwest saw appreciation from 8% to 20% and the southend of Las Vegas including southern highlands saw appreciation from 15% – 20%.
So to recap, the absorption rate figure is 11.63%, meaning homes are selling much faster than homes are available on the market.. As the spring selling season approaches, are we going to see more homeowners looking to cash out, or will they be staying put?
Time will tell, thanks for watching.
