November Housing Market Report

November  2020

CLARK COUNTY HOUSING

MARKET 

MONTHLY REPORT

UNPRECEDENTED MARKET

You won’t read this in the paper.

The October RMLS stats are in. Let’s get started.

In 2005 the housing market in Clark County was going pretty strong. I am sure you remember. Buyer activity was heavy and inventory was low. In fact, inventory measured at 1.5 in June 2005. It remained low for the next few months although it crept up slowly. By June 2006 inventory rose to 2.6 and a year later, June 2007 it was at 5.0. Realtors felt the slowdown happening the second half of 2006 but the Crash is generally considered to have started in 2007.

Inventory levels in 2020 just made history. As far as I can tell, RMLS has never reported inventory below the1.5 of June 2005. In 2020, our inventory has been below 1.5 since July. And in October our inventory officially fell  the lowest ever recorded in the history of the RMLS. It fell to 0.9. It is a great time to be selling.

Listings are on an unusually steep path downward. This is the main cause of our seller’s market.

Buyer activity

is drifting down at a normal pace for the season. In fact, the slowdown in buyer activity is tracking exactly as it was this same time last year. Heading down but so far, no worries.

What to Expect and How to Plan

The number of buyers in the marketplace remains steady, tracking almost exactly the path from last year yet the market is changing drastically. The market is changing because of changes in seller behavior. It appears that Covid has caused sellers in mass to not sell. As you can see from the chart above, there are less than half the number of homes for sale in October 2020 than there were at the same time the last two years.

No one predicted Covid to change the market as it has. Covid hit us and sellers decided not to sell. So, does it make sense that if the vaccine is available next summer then we will see this trend reverse? By this time next year after the vaccine is out we may have a surging inventory and switch into a buyer’s market. I will admit, I do not understand why Covid caused sellers to avoid selling so i am not going to express certainty the market will change next summer when the vaccine is out, but it sure seems likely. 

Planning When to Sell

If you want to play it safe and you are thinking of selling after next summer, consider planning a bit and sell your home sooner than next summer. It could mean $20,000 to $40,000+ more in your pocket. 

I am more certain that we will see our normal buyer and seller behavior after the first part of January. I have spoken on this topic many times in the past so forgive me if I sound like a broken record. 

Buyer activity now is slowly falling as we enter the holidays. We will likely see buyer activity grow rapidly in early January as it normally does. At the same time we will see our inventory stagnate at best. This is also normal and occurs because sellers do not typically place their homes on the market until April or May. (I can only guess as to why.) A growing inventory will really kick into high gear ( I suspect) once the vaccine is fully out. The vaccine will allow more sellers to sell and inventory will begin to grow faster than normal. This will take the pressure off of buyers causing home prices to stabilize. When this happens the sellers quickly lose the hysterical (the bidding frenzy) value of homes. This value is often $20,000 to $40,000 or more depending on the home value.

Why our home values are rising

I do not have stats to support this but I am hearing and seeing more buyers arriving from California. I suspect it is the result of the fires and smoke as well as the effects of Covid. California has a huge tech industry. More and more of these high-paying tech companies are allowing their employees to work remotely even after Covid is under control. Many of them are heading to Clark County just as my kids recently did.

Want to sell but are afraid of Covid?

Washington has specific rules in place for open houses and showing of homes for sale to reduce the chances of the spread of Covid19. If you are thinking of selling, give me a call and we can talk about the specifics. 

About this Report

A lot of realtors send out information to clients. It is a way to keep your realtor’s name closer to top of mind. It is good business. The newsletter might contain home maintenance tips or it might offer food recipes. 99% of the time Realtors newsletters are purchased products. Generally these are polished products. The grammar and spelling is almost always perfect and they offer a professional presentation. 

My newsletters lack all of the above. My newsletter is done monthly using my limited writing skills with a heartfelt approach. Rough around the edges might be a nice way to describe them. (Have you viewed my web site yet, ckelsey.com? The same sort of thing.) My newsletters are sincere and personal updates on where the market is and where it is going based on my 30+ years in the business. I have not seen  anywhere else to get such information on the Clark County real estate market each month. I present and interpret both the market stats as well as what I, as an agent, am seeing and feeling.

I have been through the 2006/2007 financial crisis. In fact, that crisis has been my motivation to continue the newsletter. I saw many elderly folks preparing for retirement over many years. A retirement to be largely financed with the equity in their home, at least, until the crisis hit. Instead of retiring, many had to keep working just to pay the bills. Others had to deal with a short sale after losing their jobs. These were hard times. Some of the hardest seen since the great depression. 

The resulting hardships of that financial crisis were painful for everyone. Few were spared. I was a bit luckier than some. A partner and I were building a spec home in mid 2006. We both studied the market stats and felt the changes happening. We saw the early signs of difficulty coming. We finished the home and dropped the selling price $80,000. It sold quickly but it was several months later before we fully realized we had made the correct decision. By making the decision early, we reduced our gain and avoided a loss. A delay in action of just a few weeks would have had very different and unfortunate results. 

Since that experience, I have felt an obligation to keep my clients informed. I have always felt that if clients knew what I knew, perhaps they could land in a better place just as I did in 2006. If a client knows market stats suggest risk ahead and flexibility is an option then why not minimize risk and make a purchase or sale sooner? If a client knows there are clues that interest rates or home values will be dropping soon and there is an option on timing then why not delay the purchase?I do not have a crystal ball today any more accurate than the one I used in 2006. It is not a matter of clearly seeing the future but rather a matter of reducing the risk. There is always uncertainty. I am just doing what I can to reduce the risk and minimize the uncertainty. 

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