The July housing statistics in Las Vegas once again came in pretty much as we expected. Most of the data we track (daily, weekly, and monthly) indicates the housing market is still on a steady upward trend. It has not been at a rapid pace, but rather a slow, stable positive trek, trying to get to a level where we might classify it as a “normal” housing market. However, in our opinion that is still months and maybe years away.
We are on the cusp of the Fed finally raising short term interest rates, which will inevitably result in mortgage rates following that movement. The print economic media has been beating up that subject almost on a daily basis. Will the increases begin at the next September meeting, or be delayed until December? Recently it seemed most of the economists and analysts believe it will happen in September, however recent monetary and economic news from China, as well as lesser concern about inflation, has led others to believe the Fed will wait until the end of the year before opening the door to higher interest rates. We don’t think housing demand will react much to the looming change, as it will probably be a very small increase. Many of the consumers who have been “on the fence” have already made their decision, so we don’t expect the sales figures to change much due to small rate changes. There has also been a lot written and discussed about what can be done to attract more millennial consumers to the housing market. Raising rates too much will NOT be conducive to getting younger customers feeling good about buying a new home.
We sorted through 583 new home recorded sales (all product types) in July. It placed the 2015 total at 3,576, a year to year increase of 378 transactions, or 11.8 percent. The monthly new home closings should rise a little going through the 3rd quarter, based on the recent net sales and permit activity. We don’t foresee any significant improvement, and the monthly figures will probably recede a little during the 4th quarter.
The median price of the new home closings in July was $305,928. This is a year to year change of $15,928, or 5.4 percent. We think the monthly year to year comparisons of the new home median prices should stay in the single digits for the rest of 2015. Again, we see that slow, steady increase continuing.
The permit total for the metropolitan area in July was 680. It puts the 2015 sum at 4,810 permits, a year to year increase of 648 units, or 15.5 percent. The monthly permit tally should also stay pretty consistent as we progress into 2016. The current pace of gross / net sales suggests that the pace of monthly permits will remain near 600 – 650 per month entering the 4th quarter and into 2016.
According to the recorded sales data from the Clark County Recorder’s Office, there were 4,174 resale closings in July. The total for 2015 is now 25,774, a year to year increase of 3,225 transactions, or 14.3 percent. If this pace remains, it now looks like the number of recorded resales could reach approximately 43,000 in 2015.
The median price of the resale closings in July was $193,000, a year to year increase of $18,000, or 10.3 percent. There has been a small downward tendency the last 3 months, but we believe that will be short lived.
13.4 percent of the resale closings in July were condos, a number that has been pretty consistent so far in 2015. The median price of the condo closings in July was $105,000. We assume that the number of condo resales will continue rising as the overall market conditions improve. The condo median has ranged $98,000 – $100,000 during the first half of the year, but has started to increase very slowly during the past 2 – 3 months.