Clark County Housing Market Update
(What real estate agents don’t tell you)
Buyer activity is a measure of how many showings are occurring each week as indicated by the number of times lockboxes are opened. We receive this information each week from RMLS.
For the week ending February 10, 2019, lockbox openings fell just over 25% from the week before. I see no holidays to account for this drop. Up to this point, buyer activity was looking somewhat strong since early January. If it continues for another few weeks then this suggests our market will be slowing further with increasing price reductions and lower home prices. If buyer activity levels fall, the market will adjust.
Price Reductions: The number of price reductions was as high as 1439 last August. Price reductions the past 30 days are at 637. This is up slightly, by 67, from price reductions in January.
The Average Price: The past twelve months has seen the average price of a home increase from $365,000 to $395,000. The past 30 days we have seen the average price of a home increase just under $17,000. This indicator is always interesting and at the same time misleading because it is as much revealing the price range of homes being purchased as it is an indicator of how our homes are changing in value.
Marketing time: Market time increased again to 72 days. Over the past two months market time has increased from 52 days to 72 days. That is an increase of 32%.
Inventory Levels: Inventory levels rose from 2.9 months to 3.2 months. This figure is not yet concerning to me because our inventory remains high as compared to this time last year and in January we had a healthy surge in pending sales. When these sales close in February, this will result in a lowering of the inventory level.
Pending Sales: Pending sales surged in January from 483 to 628. This is a 30% increase. When these pending deals close in March, it should result in some reduction in inventory thereby bringing that number back down.
What price ranges are most affected by the market changes?
Inventory (Inventory=months needed to sell all existing homes at the current rate of sales.) Data gathered February 20, 2019. (so it is current data.)
Price Aug Sept Oct Nov Dec Jan Febr
2-300,000 1.1 1.3 1.5 1.6 1.3 1.1 1.1
3-500,000 2.1 2.3 2.6 2.6 2.7 3.0 2.8
5-700,000 4 3.2 5.2 4.8 5.2 7.3 5.1
7-1,000,000 5.7 7.7 7 8.6 9.4 7.8 10.2
Homes priced below $700,000 actually showed strength, with equal or improving inventory levels over the prior month. Homes priced from $700,000 to 1 million experienced a major jump in inventory making them even more difficult to sell. Isn’t that interesting how shifts in inventory create pockets of opportunity as well as difficulty. (Inventory data here was gathered February 20. Inventory data above was from RMLS, the 3.2, and is 3+ weeks old.). Typically, if the market is worsening and moving toward a buyer’s market, the inventory levels will start in the luxury market and work its way down to the lower price ranges. So far, that is not happening to any great extent.
Outside Opinions on Market Direction
An article in the February 20, 2019 NY Times titled “Why a Downturn This Time May Not Be Housing’s Fault” by Conor Dougherty offers an opinion on market direction. Conor feels that the housing market never fully recovered from the 2007 crash and thus does not have much to contribute to the recession that may be just getting underway now. He concludes that while the housing market has experienced a slowdown for the past 6+ months, it likely will not get worse and may take a while before it gets better.
Conclusion: We continue to have mixed results from our indicators suggesting the market is still deciding on a direction.
Indicators that suggest a direction toward a buyer’s market are
- the most recent week of lockbox openings
- price reductions
- market time and
- the general inventory levels. (the 3.2 RMLS value)
Indicators suggesting a direction toward a seller’s market are
*pending sales and
* inventory level chart of homes priced under $700,000.
While pending sales is a major indicator of most recent buyer activity levels, the lockbox feedback chart is suggesting buyer activity interest is waning quickly. I hold a lot of stock in the lockbox openings numbers but one week is too short for any conclusion. If the lockbox numbers remain weak over the next few reports then we will quickly see a market making a major move toward a buyer’s market with lower home prices in increases in the numbers of price reductions.
Kelsey Family Farm
From a recent posting of “Lily Comes to the Farm”.
We are all up before light around here. Many nights our slumber is disturbed by Cubs giving the alarm that something is afoot outside. Cubs is our huge Anatolian/Great Pyrenees livestock guardian dog who by rights and breeding should be sleeping in the pen with the livestock. We bought him at six weeks at a distressed farm sale and just couldn’t put him outside with the sheep. He has grown into a formidable polar bear of a house dog, who loves the chickens and his familiar humans but has no use for strangers or other dogs. When Cubs barks and growls at night, Grandpa puts on his clothes and gives chase alongside Cubs. In the past few weeks they have scared off packs of coyotes and a marauding band of the fattest raccoons we have ever seen. After a check of the sheep, goats, and chickens they return to the house. Muddy paws are wiped and Cubs settles in his bed next to ours. It’s a good night if there are no casualties.