Nationally, the unadjusted June single family permit total was up 11.4 percent year to year, according to the Housing Research Center, LLC (HRC). Builders are opening new communities at a 12 percent higher pace year to year. The “take away” in the June HRC report says the single family permits totals are still being affected by “lack of affordable housing, tight credit and tough underwriting standards, low credit scores, incomes and savings levels. This is combined with the builders’ hesitancy or unwillingness to build entry level affordable homes, and expensive land prices that make it tough to make money.” That pretty much “hits the nail on the head” in metropolitan Las Vegas.
Nationally, the multifamily segment has been dominating the permit numbers. The multifamily permits are making up a much larger share of the total permits. In fact, the June totals indicate the multifamily sum is almost the same as the single family, a very rare occurrence.
The resale segment in June is pretty much the status quo … a tight and shrinking inventory of “good” listings. This is especially the case in the most active sub-markets for homes listed under $300,000. An existing home that is in good clean condition, in a nice community, and priced at the market level will probably have multiple offers and be sold within 2 weeks.
There were 4,120 recorded resale transactions in June. It put our 2015 total at 21,600, which is a year to year increase of 2,865, or 15.3 percent. Again, the annual change is very acceptable. The median price of the June resale closings was $195,000. This is a 1-month small decline ($4,000), but it is an annual rise of $30,000, or 18 percent.
If there were more available homes in good condition and priced at market level, there would definitely be more resale activity. Granted, if the supply was greater we would see less upward price movement. Therefore, it depends which side of the equation one is standing to understand their preference.
We have read a few articles from the president of the Greater Las Vegas Association of Realtors (GLVAR) who has been asking the members to price their listings at the market level by educating their clients on what the correct price should be. However, many homeowners believe they can price it well above the market and “see what happens”. Chances are the listing will linger and then need price reductions. It may eventually sell for what it should have been priced from the beginning.
According to one of the sources that is regularly quoted regarding foreclosure activity, RealtyTrac, during the first 6 months of 2015 Nevada ranked 4th in the U.S. in foreclosure activity during the first 6 months of 2015. If the number of foreclosures has “taken off” in our area, it sure hasn’t been reflected in the existing for sale inventory, or much change in the number of homes going to auction. They estimate there are nearly 20,000 empty homes in Clark County. Frankly, we don’t expect to see much change in the foreclosure activity unless there are future legislative changes that loosen the potential penalties to the lenders during the foreclosure process.