Sellers’ real estate market shifting to buyers’ advantage
“The slowdown in sales and increase in our housing supply are signs that things may be starting to calm down a bit,” LV Realtors president Brandon Roberts said in a release this month.
“Price cut.” It’s a phrase that’s been absent from Southern Nevada’s real estate vernacular in recent times. But it doesn’t take more than a glance at Zillow to see that sellers are slashing their sometimes unrealistic visions of cashing in on the frenzy.
“In March of this year, we had 2,000 homes for sale on the Multiple Listing Service. Today we have 4,500. And last week alone, we took 900 price reductions,” says Diane Varney, a real estate agent with Coldwell Banker, who says she’s been waiting for the market to normalize. “I love this.”
But don’t expect the bottom to fall out.
“Those homes were overpriced,” Varney says of the 900 discounted properties. “Anything priced properly would sell.”
The median price of a single-family home set a new record in May at $482,000, up 25.2% from a year ago, according to Las Vegas Realtors.
But from May to March, escrow openings have fallen by 50%, according to an escrow executive who asked not to be named. “Purchase agreements and refinances are almost non-existent,” she said.
“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 said in a release this month.
“Even though prices are still going up, it’s welcome news for potential buyers to see more homes on the market. As we’ve been saying for months, the rate of appreciation we’ve seen over the past year or two seems unstainable.”
LVR reported 3,570 single-family homes on the market without an offer at the end of May. That’s up 76% from a year ago. Sales were down almost 9% from a year ago. About a third of all buyers in May paid cash.
Inflation, higher interest rates, and economic uncertainty are slowing the market across the country, according to experts who say people who have money are holding on to it, while those of lesser means can no longer afford a house payment.
“Their buying power has been cut by a third,” says Varney. The Federal Reserve, which has raised interest rates twice in recent months, is expected to raise the benchmark rate by three-quarters of a point this week.
Varney says it’s the high-end market that will likely be hurt most by the economy. “That’s a good thing, because the high-end market was a huge factor in raising our average sales price.”
Demand has been down for five months in Charlotte, North Carolina, according to Anne Marie DeCatsye, CEO of Charlotte’s realtors’ association, who spoke on a panel Tuesday presented 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 says. ”But buyers are going to be a little bit more conscious of their budget.”
Even with the market leveling, affordability is elusive.
“There’s literally nothing under $300,000, which really concerns us,” she said, adding her association is going to work with local governments on solutions.
Builders in Denver, faced with supply chain issues and the rising cost of building materials, are turning to multifamily dwellings as a way to maximize their investment, according to Nobu Hata, CEO of the Denver Realtors Association. Development is also expanding outward from the heart 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,” said Wendy DiVecchio, CEO of LVR. “We’re getting more and more of that build out in the suburbs – past Summerlin, up towards Mount Charleston, up towards Aliante, up towards Mesquite. And then with Apex – Apex is going to be huge.”
DiVecchio says the industrial area north of Las Vegas will soon be the site of “thousands and thousands of homes.”
The median price of a home is expected to top $500,000 this year, according to DiVecchio, who discounted talk of the market shifting to favor buyers. “We have houses hit the market and we have people getting offers. We don’t see it slowing down here,” she said, adding maybe “for a second or two.”
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