Market watch May 2022
The first four months of 2022 have fallen 8.5% off the 2021 pace with 1446 fewer closings than the first last year at this time. Available SFR inventory improved by 2995 units while listings taken in April were approximately 140 more than in March. The SFR market increased slightly to 1.0 months of available inventory even as the condo and townhome segment rose to 0.8 months of inventory. The average days on market fell to 17 days.
The median sales price of SFR closings jumped yet again from $460,000 to $475,000 for a one-month gain of 3.3% while the SFR average closed sales price soared from $560,496 to $586,642 for a one-month increase of 4.66%. This was fueled by the high end and luxury market closing strength in April where the luxury market set another record with 218 closings of one million dollars or more. Strong activity at the higher price points with continued contraction of the lower price points drives the median sales price march into uncharted territory.
We are keenly aware of the upward price pressures in this market with continued scarce supply and a consistent, if not robust demand. Perhaps a bubble? Not at all! The market forces that caused the bubble that burst in 2006 do not exist today. Moreover, Las Vegas enjoys a much more diversified economy and wider range of businesses than ever before in Las Vegas history. We are no longer a “one trick pony” dependent solely upon gaming despite gaming and conventions remaining the bedrock or foundation that this economy is built upon. We enjoy a sustainable growth market as we begin leaving the pandemic behind us!
However, the market has tapped on the closing brakes in the wake of mortgage rate increases, political uncertainty, rising inflation, and supply chain disruptions.
Challenges in the Price Range Below $250,000
It’s incredible to look backward and realize that in January 2012 almost 50% of the Greater Las Vegas residential closings were below $100,000. Closings below $250,000 made up over 90% of that market. Today that some price point ($0 – $250,000) makes up less than 20% of residential market closings. Another 75% of current market residential closings is comprised of sales between $250,000 and $700,000. One can easily see the recent shift in the market closings above $700,000 as well. We will be keeping an eye on this chart as we navigate 2022!