Clark County Housing Market Update
(You won’t read THIS in the paper)
January 14, 2020
1) Jump start supports sellers in 2020.
2) Would a war (with Iran) disrupt our Market?
3) More thoughts on CA buyers in Clark County.
Our sellers were greeted with a 59% increase in the openings of lock boxes the first week in January ending January 6 over the prior week. While it is normal to experience an increase immediately after the holidays, this is a strong start. When combined with little change in the number of total listings, this means this month or perhaps the year will be unusually strong for sellers.
This positive development has an especially interesting twist because this year is also unusually risky and unpredictable. This strong start could disappear just as quickly as it started. Please read on for an explanation.
Inventory ratios fell from 2.2 in November to 1.8 in December. I read this to mean we saw the number of listings fall faster than the number of buyers. 1.8 is a strong sellers market and suggests that along with the buyer activity data we are assured of a strong start this year.
I must hedge this prediction with two concerns:
1) I have seen buyer activity fizzle quickly for no explainable reason but it is not likely.
2) A war with Iran or whoever will likely slow buyer activity dramatically just as the Gulf War did back in 1991. A quick review of an article in the L.A. Times is a good reminder of how the Gulf War affected our housing market. (https://www.latimes.com/archives/la-xpm-2003-feb-02-re-impact2-story.html ).
Listing fell again as is typical for the last month of the holidays. They fell 17%. The odd thing is that listings will normally not begin their assent until around the first of April. I suspect sellers feel it is easier to sell when the flowers are blooming and the grass is green.
I get it. The home looks nicer in spring, but the competition also looks nicer in the spring and looks just as badly in the winter. So what is the advantage?
I say, “Why not sell in January or February?”. 1) There is reduced competition
2) The competition yards look badly.
3) and the buyer surge is likely happening through March?
Pending sales from November to December fell 24%. Again, this is a typical holiday slowdown and judging from the buyer activity levels mentioned above, we will see this jump back up quickly. The only limiting factor might be that there is simply a shortage of homes for sale at this time but this will self-correct in April or possibly sooner if enough potential sellers see the writing on the wall and list their homes.
Price reductions have been on a steady decline the past few months. In October they were at 757. They fell dramatically in December to 483. This is further evidence we are now in a strong seller’s market.
The Average Price:
This drooped from $416,000 to $414,000. This stat is a computation of average price and means little as just a single month’s reading. The average price in July was $413,000 so this has really changed little for 6 months.
Market time rose from 57 days to 65 days. I cannot explain this one except to say that this stat may simply be dysfunctional. It is contradictory to most other stats. It may simply be a reflection of the slowing buyer activity levels during the holidays.
There is a window of opportunity for sellers in this current market IF the market plays out as it has for so many prior years.
There is an unusually large buyer activity surge (59%) and low inventory that will stay low until early April. Then sellers will begin their march back into the market. During the first 3 months of this year we will likely see competitive bidding over the list price that will net sellers more. After that time, the number of listings will begin catching up and buyers will begin to see some comfort.
But there is a strong cautionary word that seems appropriate. We are in unusually precarious and unpredictable political times. The strong market of today could change quickly as they almost did with the conflict involving Iran last week. If a market change occurs then your short range plans may get put on hold.
Why do I have these buyers on the brain? I have written about CA buyers in my past two articles. (You can find these past writings at ckelsey.com. Click on “seller” and then “research reports”.)
We have all heard the story of a CA buyer paying too much for a home or stories blaming Californians for raising our housing prices. (This is bad until we are sellers, right?) CA buyers have been buying in Clark County for decades.
So, I am not sure why I am currently possessed about CA buyers. Perhaps it is because I would love to see my two kids and grandkids come home and escape the risks of CA fires.
Perhaps it is because I have this sense that there will be a growing surge of CA buyers, not so much because of the fires but because of the wonderful opportunity Vancouver is creating now along the waterfront as I reported last November at ckelsey.com
I did stumble into more information that suggests the exodus from CA is growing. According to a 2019 survey, 55% of Californians are “considering” a move away from the state due to the cost and lack of availability of housing. https://www.cnbc.com/2019/02/12/growing-number-of-californians-considering-moving-from-state-survey.html
The bottom line: Good reasons for leaving CA and good reasons for landing in Clark County are growing steadily. It seems a sure thing we will see at least a gradual growth in numbers over the years heading this way from CA.
Chris Kelsey, Keller Williams PP