SEPTEMBER 2019 HOUSING MARKET UPDATE
The southern Nevada housing market for 2019 reported a year to date appreciation of 5% on the Median Sales Price, at $310,000 thru September. This is up 3.1% from September 2018 and year to date 105%. The national housing market for September over a year was at 3.9%. At a year to date appreciation of 5% we are slightly ahead of our anticipated rate of 3-4%. A 3% growth rate is considered a STABLE MARKET for Buyers & Sellers.
What are the factors for a Stable Housing Market?
Inventory less than 4 months in NV (nationally 6 mo): Sept. 19 Inventory 2.66 mo.
Moderate appreciation, 2.5% to 5%: Sept 2019 at 3.1%.
Steady Mortgage Rates: Rates have held for 2019 between 3.6% and 4.25%
Affordability Score: 117 This is a State of Nevada score and includes Reno which has a substantially higher average sales price.
100 = US Average. (Below 100 means cheaper than the US average. Above 100 means more expensive.)
As of September 30th, 2019 the inventory for southern Nevada was 2.66 months, with available single-family units at 7,334 and 1,830 units were sold in June. We are still considered a Seller’s market in price points under $300,000, but at a Transitioning Market for homes over $300,000. We expect inventory to remain in the 2-3 month range for the remainder of 2019. September was a robust month for housing not only in Southern Nevada but nationally. Southern Nevada sold 19.3% more units in September 2019 than September 2018. Nationally, markets all across the nation were reporting in the affordable price ranges multiple offer conditions.
Year over Year
Inventory: The number of units without an offer, is still up substantially in 2019. In September 2019 there were 7,334 single-family units available, this is an 111% increase from September 2018. The days on market continue to increase this year with 53.9% of the homes selling in under 30 days vs. 70.1% in September 2018.
What is all this NOISE in the Market About?
Let’s cut through all this noise and let the numbers for Nevada speak for themselves. We have a thriving economy in Nevada.
- Job Growth: 3% – We are the #2 state in Job Growth Lead by Leisure & Hospitality #1 and Construction #2
- Population Growth: 2.09%
- Personal Income Growth: 5.7% – Nevada is ranked as the 3rd highest in Personal Income Growth
Thinking about Selling?
In our last market update, we discussed the right strategy for pricing your home. The answer is, in order to obtain the greatest net proceeds, Price to market; do not price above or stretch, even to give you room to negotiate. The following two graphs indicate clearly that Seller receives a greater sales price when they price the home to market at DAY 1. As you see, the Buyer activity for homes is the greatest in weeks 1-3, it drops off in week 3-4 and after 30 days we enter the “discount buyer” stage. Buyers ask, “What’s wrong with the home?” or, “Why is it not selling?” or, “I am going to get a deal on this home”. There is no fear of loss or urgency.
Mortgage Rates: If you are looking to purchase your new home in the next few months, then you will be able to take advantage of the historically low mortgage rates. This quarter, many of our Buyers were able to close their 30-year mortgage at 3.5%. As we have shared with our buyers, a change in interest rates of .5% substantially changes your homebuying Purchasing Power.
2019 Mortgage Rate Graph
Interest Rate Direct Impact on Buyers: Besides the obvious increase in payment, the more significant issue is purchasing power. For every .5% increase in interest rates, Buyers lose 5% of Purchasing Power. Meaning if their income remains the same, the amount they would now qualify for is 5% less. If we use the average sales price of $304,000, that would mean if rates rise by .5%, then Buyers would be looking at a $288,000 purchase price.
Graham Team Analysis for 4th Qrt?
Solid Housing Market Ahead
We expect to see a steady appreciation at the current rate of 3% year over year. Days on market to remain close to September’s figures with homes under $300,000 around 30 days. The days on market for homes over $300,000 to be close to 45-55days, and over 60 days for homes over $550,000.
The core foundations for Buyers: When is the right time to purchase?
- I can afford the monthly payment with the down payment funds I have or have access to.
- This home will meet my needs & wants for the next 2-3 years.
- With the assistance of my Graham Team Real Estate Advisor, I have found the community/area that best suits my lifestyle, where I want to live, where I work, and where I play.
- I want to gain personal wealth through equity growth in my home at the market predicted rate of 4-5% rate over the next five years.
- I want to own my own home, to live in my style and my taste, and to make it my own.
- I see homeownership as a critical part of my future retirement savings, such as owning a home free and clear when I retire, college funds, and nest egg.
The core foundation for Sellers: To sell their home at the right time and at the right price.
- Price your home at market value, you want to sell your home to the Buyers who visit your home in the first 20 days, the Buyers after this time are looking for a discount. If the time is right for you to sell your home, then let us give you a full market analysis value. We will guide you through a pricing analysis that leaves no money on the table, but sells your home within your intended timeframe. Then you will be empowered to make the decision if this is not only the right time but if the market value is the right price for you.
- Let us help you understand the pros and cons of an I Buyer Offer. For a limited few there is an option, but for most of us getting the most $$ for our home in a reasonable timeframe is most important.
- What repairs or remodel items will bring you the greatest return when it comes time to sell? What items should you focus on when getting your home ready to sell? To the Buyer, not all repairs & home improvements bring the Seller the same value