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Las Vegas housing market slowed in August again

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When buyers were rushing to buy up homes in Las Vegas last year, no one knew how long the momentum would last.

Now that it’s over, we’re left with another question: How long will the market continue to slow?

Buyers are retreating in southern Nevada as higher mortgage rates wipe out the cheap financing that fueled the unexpected housing boom in the aftermath of the pandemic. Sales have plummeted, available inventory has skyrocketed, and sellers are slashing prices more and more.

Markets across the country are also hitting the brakes, so it’s not just Las Vegas. And two housing trackers told me on Friday they don’t expect sales to pick up anytime soon.

Housing “Standoff”

Jeff Tucker, senior economist at publicly traded site Zillow, said the slowdown in nationwide sales “could continue for another year or two,” although it’s hard to predict, adding that there was “a lot of tension between buyers and sellers.” There seems to be a conflict,” he added.

The flow of new listings has slowed as mortgage rates for existing homeowners may be lower than those for new purchases. Also, they probably would have bought the house at a lower price than it is now, he noted.

Tucker said he could wait for market conditions to improve. On the other hand, someone looking to buy a home may be hesitant to pay what the seller wants due to higher mortgage interest rates.

“Unless mortgage rates fall significantly, we don’t know how this stalemate will be resolved,” Tucker said.

Taylor Ma, deputy chief economist at real-estate broker Redfin, believes the national sales slump has bottomed out. But he added that he may not recover for another year or two.

As he sees it, mortgage rates need to come down for more buyers to come back.

The average 30-year mortgage rate last month was 5.22%, down from 5.52% in June but up from 2.84% in August 2021, reported mortgage buyer Freddie Mac.

Falling prices could, in theory, spur more demand. But it doesn’t send a good signal to buyers and sellers about market conditions, Ma said.

cooling after heating

Collectively, months of housing market weakness, both locally and nationally, marks a rapid change from the overheated markets of the not-too-distant past.

Fueled by the lowest mortgage rates that people can afford and an influx of out-of-state buyers, the housing market in southern Nevada accelerated to its most frenetic pace in years last year. Prices reached all-time highs virtually every month, house hunters flooded the property with offers, and homes sold rapidly.

However, higher mortgage rates have started to put the brakes on the market this year.

On the resale front, more than 2,000 single-family homes traded in Southern Nevada last month, down about 38% from August 2021. Industry group Las Vegas Realtors reported.

The median selling price for such homes was $450,000 in August, down 3.2%, or $15,000, from July. Prices were still up 11% year-on-year, but fell for the third month in a row after not falling for more than two years.

Additionally, 42% of Las Vegas-area properties saw prices drop last month, up from just 9% in February, according to Zillow’s Tucker.

So how long will the market slowdown last? Your guess is the same as mine.

But for now, don’t expect it to go overdrive again anytime soon.

Contact Eli Segall [email protected] or 702-383-0342.follow @eli_segall on Twitter.

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