Recent housing market forecasts for Las Vegas, Nevada suggest that home prices across the metro area could continue rising through 2018, though at a slower pace than the last couple of years. Here’s a look at the latest trends for this market, with an outlook for 2018.
Las Vegas Housing Forecast & Outlook for 2018
Economists with the real estate information company Zillow recently forecast that the median home value for Las Vegas would rise by around 5.8% over the next 12 months. This comes on the heels of a whopping 12.4% gain over the previous 12 months.
In November 2017, the company stated:
“Las Vegas home values have gone up 12.4% over the past year and Zillow predicts they will rise 5.8% within the next year [through October 2018, roughly].”
According to the latest S&P/Case-Shiller Home Price Index, published at the end of October, home values in Las Vegas rose 8.6% during the most recent 12-month reporting period. That was the second largest year-over-year increase of all the cities tracked by this particular index.
It’s only logical that this market should slow down, given the overheated price growth of recent years. In fact, we are starting to see some signs of a cooling trend right now. In November, the Greater Las Vegas Association of Realtors (GLVA) reported that the median price of existing single-family homes sold in October was $263,000 — a slight decrease from the previous month.
According to David Tina, president of the GLVA:
“I think our housing market is in good shape … Our population and economy are growing as fast as almost any place in the country. And Southern Nevada has been leading the nation in job growth. All these things point to more demand for housing, with more home sales and more appreciation expected for the foreseeable future.”
Limited Inventory Boosting Home Prices
As usual, supply and demand are key factors driving the forecasts and predictions for the Las Vegas real estate market in 2018. While prices are expected to rise more slowly next year, they will almost certainly continue moving north due to a relative supply shortage.
This mirrors trends happening all across the United States. In many real estate markets, builders simply cannot keep up with demand.
“We’ve been under-building for years,” said Robert Dietz, chief economist for the National Association of Home Builders. “That’s the reason that inventories are tight. That’s the reason that home prices are growing faster than incomes.”
In October, the Las Vegas real estate market had roughly a 2.6-month supply of homes for sale. That is below the national average, and even that is well below what is considered a “normal” market. Economists and housing analysts define a balanced housing market as having five to six months worth of supply. So the Las Vegas real estate scene is still fairly constrained, with available supply falling short of demand.
Real estate market activity can also be measured by looking at the number of days a typical home stays on the market, before going under contract. A low “median days on market” (DOM) suggests that homes are selling quickly. A higher DOM means that homes are staying on the market longer, which suggests a lower level of demand from buyers.
In October, the Las Vegas real estate market had a median DOM of approximately 55 days. That was higher than the national average. Some of the hottest markets in the country, like Seattle, Washington and Portland, Oregon, had a median DOM of less than 15 days during the same month. So perhaps the Las Vegas real estate market is slowing down a bit, despite the tight inventory conditions across the metro area.
The bottom line to all of this is that home prices in and around the city will most likely continue to rise over the coming months. All of the 2018 real estate market forecasts for Las Vegas that we have studied seem to agree that house values will continue rising (year over year). Despite this, demand for homes might be a bit softer in 2018 than it has been over the last couple of years.
Disclaimer: This article includes various forecasts and predictions for the Las Vegas housing market extending through 2018. These forward-looking statements were made by third parties not associated with our company. We have presented them here as an educational service to our readers. Real estate forecasts should be considered an educated guess, as they do not always proved to be accurate over time.