Las Vegas Housing-Market Conditions

Transcription

1 Las Vegas Housing-Market Conditions The Center for Business and Economic Research Volume 40, 3rd Please note: the numbers at the end of the figure and table titles correspond to sources of data, which are listed on page 10 along with notes about major data changes. Housing Rebalancing Quarter Overview: Housing markets reflect both consumption and investment decisions. As such, market swings may reflect varying and diverse impacts such as housing-consumption services and returns on investments. Over the past few years, rising housing prices have created capital-gains returns from buying and selling, an arbitrage trading known as flipping. Increasingly, housing as investment has taken on a psychology of its own, resulting in activity markedly different from historical norms and characterized by speculative buying and selling. Having seen double-digit housing-price growth substantially above single-digit general inflation, homeowners now face the likelihood of a future with no price appreciation and the possibility of lower future prices. The market psychology is changing; few expect further price escalation. Though Las Vegas long-term growth potential may work to keep prices higher than they otherwise would be, the national housing-market environment offers reasons for worry. Still, the most notable price declines have occurred in regions with weak economies, such as the upper- Midwestern states. Continued home-price rises in Las Vegas reduce housing affordability and could foretell future economic headwinds. Simply put: economic growth in Las Vegas could grind to a halt. In California three-bedroom houses now cost $800,000 and Florida condos cost $750,000. If Las Vegas housing prices were to rise to these levels, it is hard to believe that Las Vegas would be able to attract sufficient numbers of workers anywhere near current wage levels. Thus, rebalancing the Las Vegas housing market, though likely painful in the short run for some, improves future housing affordability and keeps the area attractive for future growth. Quarter in Depth: During the third quarter, marked slowdowns appeared in some housing-market indicators. Most notably, permitting activity for residences dropped to 5,966 compared with an average of 11,717 over the first two quarters of. If the fourth-quarter permitting comes in at the same rate as the third quarter, total permitting will still exceed 35,000 units for. As permitting dropped sharply in the third quarter, new demand, as measured by new residents, also declined. A slowing population growth accompanying an oversupply condition associated with housing speculation, other things equal, could add to the housing imbalance adjustment. The 14,733 new residents in the third quarter is down from near 20,000 per quarter observed over the past few years. Continuation of the recent drop into the fourth quarter suggests a decline of as much as 1 percent in population growth in from. As permitting and new residents slowed, housing prices continued to hold. The price per square foot declined slightly. Going forward, however, there is no reason to believe the supply and demand balance will necessarily hold prices at the current levels. Indeed, as more properties come on the market, we expect time on the market to lengthen. Pressure for price concessions will likely increase. As the market for single-family residences changes to shifting economic forces, so does the apartment market. We find the average apartment rental rate at $847 with a 5.2 percent vacancy rate. Rising prices for single-family homes has stimulated demand, whereas apartment conversions have reduced supply, pushing rental rates up and reducing vacancies. R. Keith Schwer, PhD Director Las Vegas Housing-Market Conditions, Volume 40, 3rd

2 Housing-Market Overview Permits Issued in Clark County by Type of Unit 1 14,000 12,000 10,000 8,000 6,000 4,000 2, rd Total: 11,396 4th Total: 8,997 1st Total: 12,638 2nd Total: 10,470 3rd Total: 6,268 Commercial Units Multifamily Units 3,212 2,234 4,862 3,725 1,962 Single-Family Units 7,808 6,330 7,371 6,376 3,994 Note: Permits issued in Mesquite are not included. 7,000 Residential-Building Permits All Types of Unit Permits Issued by Issuing Authority 1 6,000 5,000 4,000 3,000 2,000 1, rd Total: 11,020 4th Total: 8,564 1st Total: 12,233 2nd Total: 10,101 3rd Total: 5,956 Uninc. Clark County 4,996 3,436 6,153 5,650 2,957 City of Las Vegas 2,308 1,582 1,910 1, City of North Las Vegas 2,366 2,135 2,759 1, Henderson 1,347 1,401 1,390 1,544 1,422 Boulder City Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 2

3 Local Growth 90,000 Clark County Redeemed Drivers' Licenses 2 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, rd th st 2nd 3rd 4th 1st 2nd 3rd Quarterly 23,162 19,377 21,393 21,254 21,166 19,917 19,906 20,522 14,733 Year-to-Date 64,946 84,323 21,393 42,647 63,813 83,730 19,906 40,428 55,161 Clark County Redeemed Drivers' Licenses: Major Categories 2 Unemployment 6 Las Vegas Q3 4.1% Q4 3.8% Q1 3.8% Q2 4.0% Q3 4.2% U.S. Q3 5.0% Q4 4.9% Q1 4.7% Q2 4.6% Q3 4.7% 40% 35% 30% 25% 20% 15% 10% 5% 0% 3rd th st 2nd 3rd 4th 1st 2nd 3rd Percent from Outside the 50 States and DC 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% 0.3% 0.4% 0.3% Percent from California 35.0% 34.0% 36.4% 34.5% 35.0% 34.8% 35.3% 34.2% 33.1% Percent Senior: Age 60 or Older 9.6% 9.2% 9.9% 11.9% 11.1% 11.9% 10.1% 11.1% 10.3% Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 3

4 Substitute Market: Apartments Apartment Rental and Vacancy Rates by Zip Code Area 2 ZIP CODE UNIT RATES Studio 1 Bed 2 Bed/1 Bath 2 Bed/2 Bath 3 Bed AVERAGE RATES Furnished Unfurnished Furnished Unfurnished Furnished Unfurnished Furnished Unfurnished Furnished Unfurnished Rent Vacancy * * * * * * * * * * * * * * * 873 * * * 1075 * % * * * 795 * 903 * 959 * % * * * 739 * 711 * 901 * % * * * 632 * * * 763 * % * * * * * * * 860 * % * * * 752 * * * 888 * % * * * 876 * 1021 * 1064 * % * * * 819 * * * 985 * % * 685 * 762 * % * 605 * 666 * 710 * 805 * % * 612 * 732 * 815 * 891 * % * 534 * 643 * 737 * 824 * % * * 664 * 703 * 766 * % * 562 * 653 * 660 * 768 * % * 636 * 720 * 740 * 866 * % * * 681 * 815 * % * * * 690 * 722 * 812 * % * * * 878 * * * 1025 * * % * 625 * 663 * 672 * 786 * % * * * 850 * 949 * 990 * % * * * 800 * 834 * 962 * % * 721 * 857 * % * * * 780 * 773 * 929 * % * 622 * 712 * 751 * 861 * % * * 687 * * * 806 * % * * * 824 * * * 964 * % * * * 840 * * * 961 * % * * * 809 * * * 992 * % * * * 710 * * * 822 * % * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 926 * * * 1174 * % * * * * * * * * * * * * * * * 738 * * * 878 * % * * * * * * * 1179 * % * * * 936 * * * 1071 * % * * * 738 * 751 * 883 * % * * * 907 * * * 1103 * % * * * 929 * * * 1044 * % * * * 835 * * * 1004 * % * * * * * * * 900 * * % * 765 * 844 * % * * * 871 * * * 1083 * % METRO LV * % * Number of observations insufficient for statistical purposes. Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 4

5 Substitute Market: Apartments Apartment Rental and Vacancy Rates by Zip Code Area Rent Data Suppressed Vacancy Data Suppressed Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 5

6 Single-Family Housing-Market Details 6,000 Distribution of House Size in Square Feet 3 5,000 4,602 4,457 4,595 4,608 4,634 4,000 3,000 2,000 1,000 2,155 2,311 2,197 2,233 2,113 1,676 1,658 1,702 1,720 1,802 1,377 1,352 1,375 1,385 1, rd 4th 1st 2nd 3rd Note: The boxplots can be interpreted as Half the houses have a [square footage, price, price per square foot, or mortgage] between [value at bottom of box] and [value at top of box], with the median being [value in middle of box]. The other half of the houses is evenly split between values that are higher and values that are lower. To show this, lines extend out of the box upward and downward, with 98 percent of houses between [value at top of line] and [value at bottom of line]. The extremely high 1 percent and the extremely low 1 percent are not shown in order to avoid the detrimental effects of outliers, data entry errors, or other anomalies of the market. Distribution of Sales Price 3 $1,200,000 $1,150,000 $1,199,500 $1,200,000 $1,250,000 $1,230,144 $1,000,000 $800,000 $600,000 $400,000 $385,000 $380,000 $399,000 $405,000 $405,000 $200,000 $302,500 $300,000 $309,000 $315,000 $320,000 $252,000 $250,000 $257,500 $262,800 $269,000 $128,479 $125,010 $130,050 $135,000 $137,920 $0 3rd 4th 1st 2nd 3rd Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 6

7 Single-Family Housing-Market Details Distribution of Price per Square Foot 3 $350 $327 $339 $335 $340 $329 $300 $250 $200 $205 $207 $209 $210 $184 $185 $187 $189 $205 $183 $150 $164 $165 $165 $169 $164 $100 $91 $89 $94 $94 $100 $50 $0 3rd 4th 1st 2nd 3rd Note: The boxplots can be interpreted as Half the houses have a [square footage, price, price per square foot, or mortgage] between [value at bottom of box] and [value at top of box], with the median being [value in middle of box]. The other half of the houses is evenly split between values that are higher and values that are lower. To show this, lines extend out of the box upward and downward, with 98 percent of houses between [value at top of line] and [value at bottom of line]. The extremely high 1 percent and the extremely low 1 percent are not shown in order to avoid the detrimental effects of outliers, data entry errors, or other anomalies of the market. Distribution of Total Mortgage Value 3 $1,000,000 $963,715 $998,680 $965,412 $880,000 $900,000 $800,000 $600,000 $400,000 $334,925 $330,000 $341,978 $355,000 $360,021 $200,000 $265,075 $262,943 $270,000 $279,000 $287,000 $206,939 $203,610 $208,962 $224,000 $232,500 $0 $0 $0 $0 $0 $0 3rd 4th 1st 2nd 3rd Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 7

8 Housing-Market Comparisons $800,000 Median Home Prices in Selected Western Counties 4 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 3rd 4th 1st 2nd 3rd Clark County, NV $309,000 $313,766 $315,000 $319,824 $320,000 Maricopa County, AZ $257,000 $265,000 $268,715 $280,000 $277,074 Salt Lake County, UT $227,430 $232,750 $234,878 $252,700 $272,638 Los Angeles County, CA $510,000 $515,000 $525,000 $535,000 $538,000 Orange County, CA $680,000 $690,000 $705,000 $720,000 $700, % Quarterly Increase in Median Home Price 4 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 3rd 4th 1st 2nd 3rd Clark County, NV 3.7% 1.5% 0.4% 1.5% 0.1% Maricopa County, AZ 9.4% 3.1% 1.4% 4.2% -1.0% Salt Lake County, UT 4.3% 2.3% 0.9% 7.6% 7.9% Los Angeles County, CA 6.5% 1.0% 1.9% 1.9% 0.6% Orange County, CA 3.2% 1.5% 2.2% 2.1% -2.8% Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 8

9 Single-Family Housing-Market Details Number Available and Median List Price of Existing Single-Family Residential Units 5 21,500 $370,000 20,500 19,500 $365,000 18,500 $360,000 17,500 16,500 $355,000 15,500 $350,000 14,500 13,500 $345,000 12,500 January February March April May June July August September Available units (left axis) 16,493 17,675 17,385 18,497 19,132 20,026 20,273 20,384 20,815 Median list price (right axis) $349,900 $349,999 $365,000 $365,000 $362,900 $359,900 $358,800 $354,900 $350,000 $340,000 Percent Existing Single-Family Residential Units Sold by Time on Market 5 100% 90% 80% 70% 11.1% 9.9% 17.2% 12.3% 12.1% 11.1% 9.5% 13.8% 18.4% 11.7% 6.8% 13.4% 9.2% 7.2% 15.8% 9.4% 10.6% 12.1% 13.8% 8.2% 9.6% 11.7% 11.2% 16.2% 16.3% 17.1% 19.6% 60% 50% 40% 25.9% 20.0% 21.1% 25.1% 24.6% 26.2% 24.5% 25.3% 23.3% 30% 20% 35.9% 38.2% 43.5% 42.9% 43.1% 40.0% 38.9% 33.8% 32.1% 10% 0% January February March April May June July August September 0-30 days days days days 120+ days Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 9

10 Single-Family Housing-Market Details Number of Single-Family Home Sales 3rd Number of Sales Sources: 1 Local building permitting agencies. 2 CBER. 3 CBER calculations using First American Real Estate Solutions RealQuest data based on new and existing recorded home sales. 4 Metroscan, First American Real Estate Solutions data based on recorded home sales. These statistics may differ from CBER calculations based on the same data because Metroscan uses raw estimates. 5 Greater Las Vegas Association of Realtors data based on MLS records, which do not necessarily account for newly constructed homes sold by local builders. 6 Bureau of Labor Statistics and Nevada Department of Training and Rehabilitation. Note: As of the 1st report, statistics in the Single-Family Housing-Market Details section have been revised to reflect only single-family housing. Copyright Conditions Las Vegas Metropolitan Housing-Market Conditions is intended for subscribers. Subscribers may reproduce the publication s items if they cite the publication name, date, and note the copyright of the Center for Business and Economic Research. Send address changes to: The Center for Business and Economic Research, UNLV, 4505 Maryland Parkway, Las Vegas, NV, Phone: (702) Fax: (702) cber@unlv.nevada.edu. Web page: Las Vegas Housing-Market Conditions, Volume 40, 3rd Page 10