2020 Las Vegas Market Forecast. It's Gonna be a Bumpy Ride....
2020 has been a bumpy ride. Between COVID-19 restrictions and all the protesting, the Las Vegas Real Estate Market is still making gains. We saw prices dip slightly at the beginning of the COVID lockdowns in April, but it's been uphill the rest of the year. Why then, with record unemployment and showing restrictions on all tenant occupied homes, is the market still going up?
At the beginning of 2020 the market was starting to take off. It was going to be a fantastic year for Real Estate in Las Vegas. In a normal year, Las Vegas inventory always tends to rise from March thru August and then new listings tend to taper off towards the holidays. However, inventory has been flat the entire year. Fluctuating between 4400-5200 homes available. That's not enough inventory for the amount of people we have in Clark County. For a balanced market, the Las Vegas Valley needs to see between 8000-9000 homes on the market. At that inventory level we should expect to see 1-3% appreciation. That is considered a normal balanced market.
The spring and summer housing rush didn't happen. Unemployment reached 34% at one point this summer, and people that would have normally put their homes on the market just chose not to. Investors and Landlords that would have sold were unable to because tenant occupied homes cannot be shown according to the restrictions put in place. On top of that State and Federal Moratoriums were placed on Evictions and Foreclosures. Tenants lost their jobs and stopped paying rent and they could not be evicted. Real Estate transaction sales dropped to below 2000 for 2 short months in April and May, and then we were back to 3000 homes selling and a meager 1.4 month supply of homes. Prices continue to rise due to a lack of inventory artificially propped up by these moratoriums.
Where do we go from here? When will the final ball drop? We all know the Tsunami of pent up supply is bound to break sometime, and when it does will we see a flood of inventory hit the market? I keep an eye on supply on a daily basis. The State moratorium extension expires October 15th. The CDC also placed an additional federal moratorium on evictions thru December 31,2020. When I see 2-3 consecutive months of inventory increases I will expect the market drop to follow. Currently, Las Vegas is breaking Median Price records on a weekly basis. Prices are going up. Not at 2005 or 2103 rates, 52%+ and 32%+ respectively, but still they rise.
Good news is that the FED has vowed to keep interest rates at historically low numbers thru 2023. So, If your not sure about when to buy, you have time. I'd say don't wait....Regardless of what direction the market is heading, the benefits of owning a home outweigh the potential for some median price loss. The most important thing in buying a home is your interest rate. That is the number that determines what your payment is going to be. The real estate market is always going one direction or the other. The real goal is to get into the market, make your mortgage payments, live life, and pay off your home. That's so you can retire with some peace of mind with a home that is paid for.
If your in need of an agent with Experience, Give me a call. We can have chat about your needs. I'll get you moving.