Las Vegas Housing-Market Conditions

Transcription

1 Las Vegas Housing-Market Conditions The Center for Business and Economic Research Facing Difficulties Volume 44, 3rd Residential construction remains depressed. The supply of empty housing units (new homes, existing homes, apartments, residencies for sale by owner, and unlisted foreclosure properties) exceeds 25,000 units. This supply of empty units far exceeds a normal inventory level. As a result, we face downward pressure on prices, hesitancy to cut prices, hesitancy to buy, a generally held belief that prices will decline in the future, tightened credit, and losses in home equity all these factors contribute to difficulties in the current housing market. Even in the face of excess supplies in, permitting continues. Southern Nevada posted 6,489 units permitted in the 3rd quarter. Indeed, the 3rd-quarter number of permits in exceeds the same quarter s a year earlier. Most notably, there was a marked increase in multifamily units permitted 3,964 of 6,489 (61.1 percent of total units). As housing affordability has declined in recent years, market incentives point to the need for housing in lower-price ranges, suggesting multifamily units. Still, strong permitting will add to the future supply of housing units, requiring future demand changes to ensure orderly market balance. Most importantly, not all of the increase in permitting will necessarily increase the supply of units in the new term. Increased permitting is occurring in advance of forthcoming changes. As a result, the increased permitting is not a sign for delayed adjustment to housing imbalances, rather a sign of preparation for future profitable opportunities and stockpiling of permits. The time to burn off the current excess supply of housing units depends on future population growth and housing preferences. In our count of redeemed out-of-state drivers licenses, a proxy measure for inmigration, we find 57,563 for the first three quarters of compared with 63,046 for the same three quarters in, a drop of 9.7 percent. No doubt, declining relative economic opportunities, as reflected in the sharp increase in home values over the past few years, plays a role in this recent decline in Southern Nevada. Other things equal, a slower population-growth rate lengthens the time to correct the excess housing-supply imbalance. Apartment market conditions for vacancy and rental rates show little change during. The average monthly rent is up to $868 (second-quarter ) from $856 (third-quarter ), a small difference. Also, vacancies increased modestly, up from 7.0 percent to 7.1 percent between the second and third quarters. The apartment market has shown far more rent stability than the prices for single-family homes, but we have also seen apartment vacancies rise in response to the excess supply of the singlefamily market. The vacancy rate has risen over the past couple of years as renters found more opportunities in single detached units. R. Keith Schwer, PhD Director 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.

2 Housing-Market Overview 7,000 Permits Issued in Clark County by Type of Unit 1 6,000 5,000 4,000 3,000 2,000 1, rd Total: 6,337 4th Total: 5,620 1st Total: 5,004 2nd Total: 5,860 3rd Total: 6,489 Commercial Units Multifamily Units 1,977 2, ,081 3,964 Single-Family Units 4,048 2,767 4,059 4,474 2,232 Residential-Building Permits All Types of Unit Permits Issued by Issuing Authority 1 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, rd Total: 6,025 4th Total: 5,363 1st Total: 4,704 2nd Total: 5,555 3rd Total: 6,196 Uninc. Clark County 2,957 2,969 2,324 2,496 4,660 City of Las Vegas City of North Las Vegas Henderson 1, , Boulder City Mesquite 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 21,166 19,917 19,906 20,522 22,618 18,328 18,957 18,681 19,925 Year-to-Date 63,813 83,730 19,906 40,428 63,046 81,374 18,957 37,638 57,563 Unemployment 6 Las Vegas Q3 4.3% Q4 4.1% Q1 4.4% Q2 4.4% Q3 5.1% U.S. Q3 4.7% Q4 4.5% Q1 4.5% Q2 4.5% Q3 4.6% 40% 35% 30% 25% 20% 15% 10% 5% Clark County Redeemed Drivers' Licenses: Major Categories 2 0% 3rd th st 2nd 3rd 4th 1st 2nd 3rd Percent from Outside the 50 States and DC 0.3% 0.2% 0.3% 0.4% 0.3% 0.4% 0.4% 0.2% 0.4% Percent from California 35.0% 34.8% 35.3% 34.2% 32.6% 33.6% 33.9% 32.7% 30.7% Percent Senior: Age 60 or Older 11.1% 11.9% 10.1% 11.1% 10.5% 11.3% 10.4% 10.0% 10.6% 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 * * * 664 * 764 * * * * % * * * 868 * * * 1094 * % * * * 812 * 906 * 981 * % * * * 759 * 768 * 926 * % * * * 564 * 561 * 691 * % * * * 830 * * * 971 * % * * * 759 * * * 884 * % * * * 913 * * * 1067 * % * * * 868 * * * 1041 * % * 710 * 790 * % * 591 * 661 * 709 * 818 * % * * * 745 * 818 * 903 * % * * 738 * 864 * % * 670 * 696 * 772 * % * 619 * 714 * 724 * 839 * % * 649 * 740 * 768 * 886 * % * 667 * 728 * 631 * 915 * % * * * 672 * 711 * 810 * % * * * 878 * * * 1041 * * % * 625 * 666 * 665 * 788 * % * * * 889 * * * 1028 * % * * * 836 * 854 * 1006 * % * 746 * 886 * % * * * 781 * 781 * 943 * % * 587 * 747 * 779 * 867 * % * * 682 * 662 * 822 * % * * * 881 * * * 1020 * % * * * 837 * * * 950 * % * * * 854 * * * 1007 * % * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 949 * * * 1221 * % * * * * * * * * * * * * * * * 751 * * * 873 * % * * * * * * * 1234 * % * * * 1002 * * * 1142 * % * * * 748 * 750 * 896 * % * * * 882 * * * 1028 * % * * * 956 * * * 1097 * % * * * 845 * * * 1004 * % * * * 784 * * * 913 * * % * 781 * 859 * % * * * 864 * * * 1034 * % METRO LV * % * Number of observations insufficient for statistical purposes. Page 4

5 Substitute Market: Apartments Apartment Rental and Vacancy Rates by Zip Code Area Rent Data Suppressed Vacancy Data Suppressed Page 5

6 Single-Family Housing-Market Details 6,000 Distribution of House Size in Square Feet 3 5,000 4,634 4,708 5,195 4,953 4,969 4,000 3,000 2,311 2,358 2,327 2,366 2,358 2,000 1,000 1,802 1,827 1,781 1,825 1,817 1,446 1,484 1,427 1,493 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. $1,400,000 Distribution of Sales Price 3 $1,377,942 $1,313,525 $1,400,000 $1,200,000 $1,230,144 $1,226,600 $1,000,000 $800,000 $600,000 $400,000 $405,000 $420,000 $406,353 $395,000 $377,429 $320,000 $320,000 $309,900 $307,718 $296,000 $200,000 $269,000 $267,000 $258,089 $256,450 $245,847 $137,920 $154,169 $132,000 $153,385 $140,000 $0 3rd 4th 1st 2nd 3rd Page 6

7 Single-Family Housing-Market Details $400 Distribution of Price per Square Foot 3 $350 $329 $348 $353 $334 $341 $300 $250 $200 $150 $205 $203 $204 $183 $182 $181 $164 $163 $161 $196 $175 $155 $190 $168 $148 $100 $100 $105 $96 $102 $96 $50 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. $1,200,000 Distribution of Total Mortgage Value 3 $1,150,000 $1,000,000 $965,412 $1,035,350 $999,082 $1,000,000 $800,000 $600,000 $400,000 $360,021 $367,295 $359,538 $338,207 $317,869 $287,000 $283,900 $273,900 $265,945 $251,349 $200,000 $232,500 $228,000 $218,500 $213,726 $199,488 $0 $0 $0 $0 $0 $0 3rd 4th 1st 2nd 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 $320,000 $318,000 $308,894 $303,333 $296,507 Maricopa County, AZ $275,786 $273,728 $271,492 $269,700 $265,000 Salt Lake County, UT $272,650 $282,691 $287,363 $292,467 $292,600 Los Angeles County, CA $535,000 $536,000 $550,000 $570,000 $572,000 Orange County, CA $695,000 $685,000 $695,000 $724,500 $710, % 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 0.3% -0.6% -2.9% -1.8% -2.3% Maricopa County, AZ -1.5% -0.7% -0.8% -0.7% -1.7% Salt Lake County, UT 7.9% 3.7% 1.7% 1.8% 0.0% Los Angeles County, CA 0.0% 0.2% 2.6% 3.6% 0.4% Orange County, CA -2.4% -1.4% 1.5% 4.2% -2.0% Page 8

9 Single-Family Housing-Market Details Number Available and Median List Price of Existing Single-Family Residential Units 5 26,500 $355,000 24,500 $350,000 22,500 $345,000 20,500 $340,000 18,500 $335,000 16,500 $330,000 14,500 $325,000 12,500 January February March April May June July August September $320,000 Available units (left axis) 18,774 19,639 21,287 22,242 23,042 23,642 24,087 24,341 24,218 Median list price (right axis) $349,500 $348,900 $345,000 $341,900 $339,900 $338,900 $334,990 $329,000 $324,000 Percent Existing Single-Family Residential Units Sold by Time on Market 5 100% 90% 23.3% 23.8% 23.5% 20.7% 21.2% 18.6% 19.1% 18.2% 23.4% 80% 70% 12.2% 13.1% 12.2% 9.6% 9.6% 10.9% 11.7% 12.6% 12.2% 60% 18.7% 15.4% 14.6% 16.0% 16.5% 17.7% 18.1% 18.5% 16.7% 50% 40% 20.5% 19.1% 17.9% 21.2% 22.0% 21.8% 22.0% 22.5% 18.6% 30% 20% 10% 25.3% 28.6% 31.8% 32.4% 30.7% 31.0% 29.1% 28.2% 29.1% 0% January February March April May June July August September 0-30 days days days days 120+ days Page 9

10 Single-Family Housing-Market Details Number of Single-Family Home Sales 3 rd 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 (reported on page 6) 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 2005 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 and 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: Page 10