In the southwest Las Vegas Valley, a one-story home for sale boasts vaulted ceilings, crown moldings and an open floor plan.
It’s a “gem”, the listing says – and amid plummeting local and national home sales, the price was slashed by $25,000 on Tuesday.
It’s not alone. In Henderson, the price of a house fell nearly $31,000 on Thursday, and in the Northwest Valley region, the price of a house was reduced twice this week, losing a total of 110 $000, as seen on the Zillow registration site.
A growing share of home sellers are slashing prices in Southern Nevada and across the country as higher borrowing costs make it even more expensive for people to buy a home after a year of huge price gains.
In the Las Vegas area, 13.7% of active listings had a price drop in May, compared to 11.5% in the United States, according to data from Zillow.
Locally and nationally, the share of price cuts increased for the third month in a row in May.
This does not seem surprising. Rising mortgage rates have ended the cheap money that fueled the unexpected US housing boom with rapid sales and record prices after the pandemic, and people are also paying more for gas and d other goods in an environment of high inflation.
Zillow economist Nicole Bachaud said in an email that sellers were “finally challenged to price their homes competitively” after a period in which buyers “seemed willing to respond. at nearly all asking prices and in many cases would bid above the list price to beat other interested buyers.”
She also said it was ‘absolutely true that there was an affordability crisis in the housing market’, noting that low mortgage rates had kept monthly payments ‘in check’ even when prices were rising at an all time high. record pace.
However, monthly payments for a typical American home are now 65% higher than a year ago — and in Las Vegas they’re up nearly 80%, she said.
Mary Preheim of Keller Williams, listing agent for the Southwest Valley discount home, said prices were falling across the Valley and said she hadn’t seen such a wave of reductions in decades. years.
She says the Las Vegas real estate market is still strong because a house can sell in two and a half weeks, not “four hours” as it might have been last year when mortgage rates were at rock bottom. record levels.
In addition, many asking prices “were not realistic” to begin with.
“We were spoiled last year,” Preheim said.
“Impossible to overestimate”
For now, sales are falling as prices continue to rise.
The median selling price of previously owned single-family homes was a record $482,000 in May, up 25.2%, or $97,000, from a year earlier, according to the Las Vegas Realtors trade association.
Just over 2,900 homes traded hands last month, down nearly 9% from May 2021.
Builders recorded 767 net home sales — newly signed purchase contracts minus cancellations — in Southern Nevada in May, their lowest monthly tally of the year, Las Vegas-based Home Builders Research reported.
Meanwhile, the average rate on a 30-year home loan was 5.78% on Thursday, down from 5.23% the previous week and 2.93% a year ago, according to mortgage finance giant Freddie Mac. .
The weekly rate hike was the largest in decades.
With high inflation, fears of a recession and a steep rise in borrowing costs, the Las Vegas real estate market faces an uncertain future.
Still, housing markets are likely to change direction, especially in Las Vegas, and there are always people looking to buy homes, especially at bargain prices, which have been in short supply in recent years.
Anyone can guess where home values will head in the coming months. But as Tim Kelly Kiernan, branch manager at Realty One Group, told me, there’s been a “crazy number” of price drops over the past week in Southern Nevada – 1,447, compared to 319 in during the same week last year, according to figures he pulled from the main Las Vegas listing service.
“You can’t overstate it anymore,” he said.