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ECONOMIC OVERVIEW
Employment in the Las Vegas market slowed modestly towards the end of 2016 after having performed very well for the past couple of years. November data showed that 943,100 people were employed in Clark County; this is up by 19,000 from November of 2015, representing a growth rate of 2.1%. In a further sign of an improving labor market, the local unemployment rate has dropped from 6.4% to 5.1% over the past 12 months
HOME SALES ACTIVITY
- There were a total of 8,857 home sales in the fourth quarter, which was an increase of a substantial 14.8% over the same period a year ago. Sales were 12.5% lower than seen during the third quarter, but that is due to seasonality.
- Sales activity was less robust in the Spring Valley, South Summerlin/Lakes, and Green Valley/Henderson sub-markets, but even in these areas sales rose.
- Sales grew at the fastest rate in the North Las Vegas sub-market, which saw a 24.9% increase when compared to a year ago. There were sizable increases in sales in almost all of the sub-markets reviewed within this report.
- Inventory levels remain woefully low, with 17.5% fewer listings than seen a year ago. That said, listing activity did rise in the Southwest, South Summerlin/Lakes, and Southeast sub-markets, which may indicate that listings will continue to increase in 2017, but I wouldn’t guarantee it.
HOME PRICES
- Average prices in the region rose by 3.9% year-over-year to $237,487. This is a modest drop of 1.6% compared to the third quarter.
- The relatively affordable Sunrise sub-market saw the strongest annual growth, with home prices rising by 11.9% to $153,667. We also saw notable gains in the Spring Valley neighborhood, where sale prices were up by 9.7% to $200,700.
- Prices rose in all but two sub-markets compared to the fourth quarter of 2015, with several remaining above the region-wide average.
- There were modest price declines in two sub-markets. The Whitney market saw a 7% drop to $163,000, and the South Summerlin/Lakes market saw prices drop by 1.1% to $339,000.
DAYS ON MARKET
- The average time it took to sell a home in the region dropped by 15 days when compared to the fourth quarter of 2015.
- It took an average of 45 days to sell a home in the fourth quarter, which is seven days lower than the third quarter.
- All component sub-markets saw the length of time it took to sell a home drop when compared to a year ago.
- The greatest drop in days-on-market was in the Downtown sub-market, which dropped by a substantial 27 days to an average of 41 days.
CONCLUSIONS
The speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors. Employment growth in Clark County is slowing, but that appears to have had little effect on the housing market. Inventory levels are still lower than I would like to see in a balanced market, and because of this, home prices continue to trend upward.
Due to slower price growth and rising interest rates, I have moved the speedometer a little toward the buyer’s side. That said, sellers are still in the driver’s seat.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.
