“Price cut.” It’s an expression that’s been missing from the Southern Nevada real estate vocabulary in recent years. However, it’s less than a glance on Zillow to realize that sellers are cutting back on their unrealistic hopes of cashing in on the frenzied market.
“In the month of March this year we had 2,000 houses to be sold on the Multiple Listing Service. Today, we’re at 4,500. Last week we took the price down by 900,” says Diane Varney an agent in real estate working for Coldwell Banker, who says she’s been waiting for the market’s normalization to happen. “I love this.”
Don’t be expecting that the bottom will fall off.
“Those homes were overpriced,” Varney declares of the 900 properties that were discounted. “Anything priced properly would sell.”
The median value of a single-family house reached a new record in May with $482,000, which is up 25.2 percent over the previous year as per Las Vegas Realtors.
From April to March, openings for escrows dropped by 50 percent, according to an escrow manager who asked not to be identified. “Purchase agreements and refinances are almost non-existent,” she stated.
“It’s not like a frenzy or anything, but there seem to be more buyers starting to cancel, not caring about their earnest money deposit,” LV Realtors president Brandon Roberts said in a statement to The Current.
“The slowdown in sales and increase in our housing supply are signs that things may be starting to calm down a bit,” Roberts declared in a statement this month.
“Even although prices are rising, it’s great news for prospective buyers to see more homes come on the market. We’ve been saying it since the beginning of time, this pace of growth we’ve witnessed in the last one or two years isn’t sustainable.”
LVR said it had 3,570 single-family houses available for sale without an offer as of May. It’s an increase of 76% from the previous year. Sales fell by nearly 9percent from last year. Around a third of buyers who bought in May made payments in cash.
Inflation, increased interest rates and economic uncertainty are affecting the overall market according to experts who claim that people who have money are hanging their money, whereas people with lower incomes are unable to pay for a mortgage.
“Their buying power has been cut by a third,” says Varney. It is the Federal Reserve, which has increased interest rates twice in the past few months, is likely to increase rates by three-quarters of one point next week.
Varney states that it’s the high-end market that’s likely to be most affected by the economic downturn. “That’s a good thing, because the high-end market was a huge factor in raising our average sales price.”
The market has been lagging for the past five years within Charlotte, North Carolina, according to Anne Marie DeCatsye, CEO of Charlotte’s realtors’ organization who was on the panel on Tuesday, which was hosted by the Northern Virginia Association of Realtors .
“I think we’re going to see sellers who waited, maybe start to reconsider and come on line this summer with their listings,” she adds. “But buyers are going to be a little bit more conscious of their budget.”
With the economy settling it is still difficult to find affordable homes.
“There’s literally nothing under $300,000, which really concerns us,” she stated she added that the group will collaborate with local governments to find solutions.
Builders in Denver confronted with issues with supply chain management and the increasing cost of construction materials, are turning to multi-family homes as a means of maximizing their investment, says Nobu Hata, the CEO of the Denver Realtors Association. The development is also spreading out from the middle of the city.
“We’re kind of the same as the Denver area because we stretched out so much of the Las Vegas/Clark County area,” stated Wendy DiVecchio, CEO of LVR. “We’re seeing more of that development in the suburbs, past Summerlin and up to Mount Charleston, up towards Aliante and up to Mesquite. Then, with Apex and Apex – Apex is expected to be massive.”
DiVecchio states that the industrial zone located north of Las Vegas will soon be the location for “thousands and thousands of homes.”
The median price for homes is likely to reach $500,000 in the coming year according to DiVecchio who ruled out the possibility about the market changing towards buyers. “We have homes on the market, and we’ve got people who have received offers. There’s no sign of slowing down in this area,” she said, noting that it could happen “for one or two seconds.”