Market Pulse June 27, 2022 | New Home Sales Surge
“A goal is a dream with a deadline.”—Napoleon Hill, American self-help author
For the week of June 27, 2022
New Home Sales Surge
“A goal is a dream with a deadline.”—Napoleon Hill, American self-help author
Local Las Vegas Statistics based on 2 week moving Averages
New Home Sales broke a four-month losing streak in May, rocketing up 10.7%, to a 696,000 annual rate. Sales are still 5.9% below a year ago thanks to low inventory, but high demand has builders ramping up construction activity.
The above chart shows the months supply of new houses in the United States. As you can see, the most recent data shows a spike in supply, reaching the 9 months of inventory, signaling a strong shift to a Buyer’s market for new homes. The past two years, builders were extremely stingy on offering incentives to Buyers and real estate agents. We have seen a huge shift from home builders who are now offering higher incentives to Buyers & Agents due to this surplus of inventory and higher interest rates. If you’re in the market for a new build, consult with your agent (or call me) and ask for as many incentives as you can from builders.
Existing Home Sales remain on a four-month losing streak, down 3.4% in May. This was put to higher prices and mortgage rates and lower inventories, but demand is strong—88% of the homes sold were listed less than a month.
Freddie Mac notes that despite today's rates and prices, “in reality many potential homebuyers are still interested in purchasing a home, keeping the market competitive but leveling off the last two years of red-hot activity.”
(Construction is underway for a new housing community at Skye Canyon Park Drive and Lavange Street on Wednesday, Jun 1, 2022, in Las Vegas. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @btesfaye)
"Following a prolonged hot streak, Las Vegas’ housing market is hitting the brakes.
Sales are down, available inventory is up, and more sellers are slashing their prices amid a sharp jump in mortgage rates that have pushed up buyers’ borrowing costs.
Not every aspect of the market is dropping, as buyers keep paying record-high prices in Southern Nevada — a region long viewed as a more affordable outpost but recently ranked one of the worst spots in the country for first-time homebuyers.
Las Vegas’ housing market is no stranger to volatility — and lately, the industry is on anything but even ground.
Not only is housing moving in multiple directions at once, people also are grappling with high inflation and fears of a recession. Moreover, the most pressing natural-resources issue in our ever-growing, drought-stricken desert metropolis keeps making headlines for all the wrong reasons.
There’s no way to predict what will happen with the overall economy this year or how long home sales will keep sliding. Housing markets are always prone to ups, downs and other shifts. There’s no telling how long the current trends will last.
But buyers have indeed pulled back lately as higher mortgage rates wipe out the cheap money that fueled America’s unexpected housing boom after the pandemic hit.
On the resale side, just over 2,900 single-family houses traded hands in Southern Nevada in May, down almost 9 percent from the same month last year, trade association Las Vegas Realtors reported.
The median sales price of such homes was a record-high $482,000 in May, up 25.2 percent, or $97,000, from a year earlier.” - LVRJ Eli Segall
The past 15 weeks have seen consistent growth of properties coming on the resale market.
As of June 27, 2022, there are currently active (%’s compared to 2 weeks ago):
5,570 Single Family Homes +23.61%
768 Condos +24.47%
538 Townhouses +26.88%
222 Manufactured Homes +15.63%
412 High Rise Units +24.23%
96 Multiple Dwellings +29.73%
2,215 Parcels of Land +2.12%
2,295 Rentals On Market +7.95%
Past Seven Days Market Watch (%’s compared to 2 weeks ago):
1,486 New Listings +16.14%
279 Back On Market +7.72
85 Price Increases -7.61%
1,255 Price Decreases +28.06%
908 Accepted an Offer -10.45%
725 Sold -10.05%
43 Expired -4.44%
323 Taken Off Market +35.71%
147* properties are coming soon +3.52%
As of June 27, 2022 there are 1,505 more active residential resale properties on the market compared to two weeks ago, an increase of 24.67%.
*Properties coming soon do not indicate all of the upcoming properties. These are listing that are entered into the MLS prior to list date.
Las Vegas executives offer details on resort plan for south Strip
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Las Vegas home sellers slashing prices as mortgage rates climb
SHORT WEEK, TALL REBOUND... There were just four days of trading, but that's all the time investors needed to power the three major stock indexes to big weekly gains, snapping a three-week losing streak.As usual, there were negatives, led by the University of Michigan Consumer Sentiment Index sinking from 85.5 a year ago to 50.0, its lowest read ever, and continuing jobless claims inching up for the week.
But New Home Sales posted that strong upside surprise, and Wall Street felt the recent signs of slowing economic growth would lead to less aggressive Fed rate hikes, giving us a better chance of avoiding a recession. However, it is my belief that we are already in a recession and will be confirmed the first week of July when the Q2 2022 GDP numbers are reported.
The week ended with the Dow UP 5.4%, to 31,501; the S&P 500 UP 6.4%, to 3,912; and the Nasdaq UP 7.5%, to 11,608.Bonds overall saw modest gains, the 30-year UMBS 4.5% UP 0.20, to $99.29.
Freddie Mac's Primary Mortgage Market Survey reported the national average 30-year fixed mortgage rate up just three basis points (0.03%). Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Realtor.com forecasts that a moderating housing market will give buyers more options. The number of homes for sale is growing more than originally projected, driven by more sellers and a slowing sales pace.
PENDING HOME SALES, GDP DOWN; INFLATION, MANUFACTURING UP... The Pending Home Sales index of signed contracts on existing homes is expected down for another month, while the GDP-Third Estimate for Q1 should report the economy contracting. Not so inflation, with PCE Prices predicted up in May. However, the ISM Manufacturing Index is forecast to show that sector still expanding, though at a slower rate
Forecasting Federal Reserve policy changes in coming months. As inflation continues to rise, the Fed seems determined to rein it in with a series of rate hikes, expected to be at least a half percent at each meeting. Note: In the lower chart a 82.6% probability of change is a 82.6% probability the rate will rise
AFTER FOMC MEETING ON: CONSENSUS
Jul 27 2.25%-2.50%
Sep 21 2.75%-3.00%
Nov 2 3.00%-3.25%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Jul 27 82.6%
Sep 21 87.8%
Nov 2 92.6%
With gratitude,
Jordan C. Dove, ABR® SFR®
MANAGING PRINCIPAL | REALTOR®
Dove & Associates Powered by Nationwide Realty
702.767.5557 | Jordan@DoveandAssociates.com
JordanDove.com | DoveandAssociates.com
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3960 E. Patrick Ln. Ste. 204
Las Vegas, NV 89120
NV Lic. # S.0180594
