Changing Times

Hello, welcome back to LuxeVegasLifestyles.com. The real estate market is shifting, but this change could present new opportunities for savvy buyers. While contract cancellations and rising inventory levels are making headlines, these trends might just create the ideal conditions for those looking to enter or re-enter the market. With mortgage rates fluctuating and new listings on the rise, now is the perfect time to stay informed and learn how these changes can work to your advantage. Today, I’m going to keep things simple and to the point.

Contract Cancellations & Declining Sales

Home buyers are getting cold feet. The data paints a clear picture of a market that’s starting to cool off after years of rapid growth.

• 60,000 homebuyers canceled contracts in July 2024 — a record high.
• Pending home sales dropped by 55% in July, a month-to-month decline according to national Realtors.
• Homeowners are paying an average of $115,000/year on top of their mortgages, covering expenses like taxes and insurance.

These numbers point to a major issue: affordability is becoming a bigger challenge. The market’s resilience is being tested, and early signs suggest we’re at the start of a larger downturn in home prices.

Also Read: Is Buying A Luxury Condo In Las Vegas A Good Investment?

Housing Inventory Has Risen Across The U.S.

Mortgage Rates & Unemployment

The drop in mortgage rates hasn’t sparked a buying frenzy as many hoped. And unemployment seems to be playing a big role. However, rates are expected to further drop.

• Mortgage rates fell from 7.8% in October 2023 to 6.4% in August 2024.
• Despite lower rates, mortgage applications continue to decline.
• 28% of Americans are searching for new jobs, marking the highest job-seeking rate in a decade.
• A third of Americans have second jobs, indicating financial strain.
• The Federal Reserve is signaling economic trouble with upcoming interest rate cuts.

Falling mortgage rates typically lead to more buyers, but not this time. This signals a deeper economic issue where job instability and high home costs are keeping people out of the market.

Housing Inventory Spikes Across The U.S.

Inventory levels have risen sharply over the last year, reflecting both a cooling market and a growing reluctance among buyers.

• Maine: +39% increase in inventory.
• Vermont: +45% increase.
• North Carolina: +52% increase.
• Georgia: +53% increase.
• Florida: Leads with a 66% inventory increase.
• Texas: +35% increase.
• Washington: +49% increase.
• California: +41% increase.
• Nevada: Still in the negative but shifting, from -21% to -2% in just a few months.

These rising inventory numbers show that fewer buyers are qualifying for homes due to sky-high prices. This shift in sentiment suggests we’re on the verge of a nationwide market correction.

Vegas Seeing Rising Inventory, Falling Prices

Las Vegas is a prime example of these trends. Housing inventory in the area has been on a steady climb, and prices are starting to drop.

• In April 2024, Las Vegas had 3,252 homes for sale.
• By September, this number hit nearly 5,000, a 35% increase in inventory over just six months.
• Median home price: Peaked at $485,000 in July, dropped to $475,000 in August.

Though a $10,000 drop might seem small, it’s an indicator of where things are headed. With fewer qualified buyers and growing inventory, downward pressure on prices seems inevitable.

Also Read: Is Nevada A Good State To Retire In?

There Have Been Noteworthy Price Reductions

Big Price Reductions

Price cuts are now a common theme across the Las Vegas real estate market as sellers adapt to the shifting landscape. Properties across various price points are seeing adjustments, highlighting the market’s cooling trend. Here’s a look at how sellers are reacting to the changing market:

• High-end Properties: Some homes originally listed in the $800,000 range have experienced reductions of $80,000 to $100,000 within just a few weeks. This indicates that sellers are eager to attract buyers in a market where higher-end listings are no longer moving as quickly.
• Mid-range Homes: Properties in the $600,000 to $700,000 range have also seen steep price reductions, with cuts of $50,000 to $90,000 occurring over a span of just a couple of months. These adjustments suggest sellers are becoming increasingly motivated to sell, even if it means lowering their expectations.
• Multiple Price Drops: It’s not uncommon to see homes undergo multiple price cuts in a short timeframe. What does this indicate? That the market is cooling faster than some sellers anticipated.

These reductions reflect a market that’s shifting to favor buyers more than it did just months ago. For those looking to purchase real estate in Las Vegas, now might be the time to look into these new opportunities at more accessible price points.

Patience MIGHT Pay Off

Current indicators suggest a downward trend that could last into 2025. Growing inventories and slowing sales are signals of more price reductions on the horizon. Of course, nobody has a crystal ball.

• Patience: If you don’t need to buy right now, waiting MIGHT save you thousands. Prices may continue to fall, offering better deals down the line.
• Economic Turmoil: The Federal Reserve’s planned rate cuts hint at a challenging economic environment ahead, which could further impact the real estate market.
• Cycle Insight: Real estate markets are cyclical. Though long-term appreciation tends to occur, the market hasn’t seen a true downturn in years. We’re likely heading for a correction.

Final Thoughts

This isn’t just a bump in the road; it’s more like a caution sign. We’re witnessing a market that’s adjusting after a period of high growth. For now, the signs suggest a buyer’s market is approaching. If you’re in the market to buy or sell, be patient, keep an eye on trends, and make decisions with these stats in mind. My name is Lynn Stringer. I have multiple decades of experience as a Las Vegas real estate broker. Should you want to have a conversation about the market, feel free to contact me using the contact form below. Thank you for stopping by my website LuxeVegasLifestyles.com.