'Las Vegas real estate market: What happens in 2023?'

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Like the desert climate and burgeoning tourism industry, the Las Vegas housing market is one of the hottest in the country. According to the U.S. Census Bureau, the Las Vegas metro-area ranks 97th fastest in terms of population growth, increasing by 19,000 people from the summer of 2020 to 2021. Over the past decade, Las Vegas' population has grown by nearly 20 percent, and it is now home to about 2.3 million people. However, the housing market, previously favorable for sellers, has become more of a favorite for buyers in 2023 as home sales and prices in the early months of the year show signs of''weakening.

Trends in the Las Vegas real estate market

There's no doubt that the Las Vegas real estate market is being redefined. For example, Redfin's September 2022 report for the 100 most populated U.S. cities states that Las Vegas is the second fastest cooling market. The first place was taken by Seattle. At the same time, the city is one of the top 10 most popular migration destinations. While selling a home in this metro area is becoming more challenging, the data shows that people are still interested in moving to Las Vegas.

Home prices are falling

The good news for home buyers is that the median home price is coming down. The Las Vegas Association of Realtors (LVR) reports that the median sales price''s single-family home in May 2023 was $495,000, down 5.71% from a year ago. Detailed data from Redfin shows that 23.3% of offers had a price reduction in May 2023, down 1.6% from a year ago, indicating that more sellers are being forced to accept lower offers in a tight market. In addition to lower prices, there has been a decrease in the number of sales above their original price. Redfin reports that only 26.5% of homes sold above their original price in May 2023, down 32.7% from last year, indicating a more balanced market.

Fewer affordable homes

Unfortunately for buyers, there aren't enough' in the Las Vegas market'single-family homes. The number of single-family homes for sale in May 2023 totaled just over 6,500, down 3.28% from a year earlier. However, active spring and summer sales months could lead to increased supply and competition among buyers in the Las Vegas housing market.

The Las Vegas home price index

Home prices in Las Vegas have declined significantly this year, matching the national housing market's projections for declining prices and sales volume. This phenomenon is due to a combination of higher mortgage rates and a shortage of affordable single-family homes. According to the latest S&P/Case-Shiller NV-Las Vegas Home Price Index, the price index was 270.45 in April 2023, down 6.78% from a year ago and markedly below the peak in July 2022''05 - $300.05. Buying a home in Las Vegas is now more affordable compared to other U.S. markets, but still well above the city's previous record high of $234.78 in August 2006.

Median market timing

Active offers in the Las Vegas-Henderson-Paradise metro-area market are staying on the market longer, although home sales typically linger during the fall and winter seasons. The median time on the market in May 2023 was 46 days - double the post-pandemic low of 23 days in April and May 2022. When compared to the October 2016-2019 pre-pandemic median term of 49 days, it can be concluded that the market is returning to its historical norm.

Market Forecast''Las Vegas real estate

Like many local real estate markets, Las Vegas is transitioning from a seller's market to a neutral environment that satisfies both buyers and sellers.

Home price declines

Current trends suggest that home prices will continue to decline from the highest median starting price of $499,900 in May 2022 as buyers become more selective due to mortgage rates nearing 20-year highs and rising inflation squeezing consumers' budgets. Unfortunately, Las Vegas market forecasts do not publicly estimate how much they will decline over the next 12 months and whether they will eventually reach the pre-pandemic median price''s $320,000 sale. Currently, home prices are stabilizing and a sharp market crash is unlikely thanks to a healthy local economy and interest from out-of-state movers looking to live in Southern Nevada.

Homes will take longer to sell

Sellers in Las Vegas will see their homes stay on the market longer, and they may need to align prices more with their initial offers this year. In addition, buyers may be less willing to offer a deal once a listing on the Multiple Listing Service (MLS) becomes active. In addition, the data suggests that sellers are more likely to make price reductions from the peak of the exchange rate price tag in the summer of 2022. At existing''s mortgage rates of 7.12% on a 30-year fixed loan, buyer demand has fallen slightly.