Employment in the Las Vegas metropolitan area continues to moderate from the substantial growth of the past few years, but the region still experienced impressive annual employment growth of 3%. The market has added 28,400 new jobs over the past 12 months. With this growth in employment, the unemployment rate came in at 5.2%.
Las Vegas continues to grow its job base. This has led to solid growth in the civilian labor force, which is now at an all-time high. Given the fact that the area is approaching full employment, I expect to see wages rise at above-average rates. This will allow home price growth to continue, for the time being.
HOME SALES ACTIVITY
- A total of 10,018 homes sold in the third quarter, which was an increase of 5.3% over the same period a year ago. With a solid 7.6% increase in pending sales, a strong number of closings are expected to occur in the fourth quarter.
- Home sales were not as strong in the Queensridge and Aliante sub-markets, but this is due to very low inventory levels rather than a drop in demand.
- Sales rose substantially in several of the sub-markets within this report, but the greatest increase was seen in The Lakes/Section 10 market area, which saw an annual increase of 20.2%.
- Inventory levels remain remarkably low, with 36.3% fewer homes for sale than the same period in 2016. Listing activity is unlikely to grow in the fourth quarter, so the market will remain out of balance.
- Home prices in the area have risen by 12.7% year-over-year, to an average of $268,958.
- Double-digit gains were seen in an additional eight neighborhoods, and only five sub-markets saw prices rise by less than 10%.
- Prices rose in all sub-markets compared to the third quarter of 2016. The strongest growth was in the more-affordable Downtown sub-market, where prices were up by 32%.
- I continue to believe that we will see above-average price growth in the greater Las Vegas market as robust job growth continues and inventory levels remain very constrained.
DAYS ON MARKET
- The average time it took to sell a home in the region dropped by 19 days compared to the second quarter of 2016.
- It took an average of just 32 days to sell a home in the third quarter.
- The length of time it took to sell a home dropped in all the Las Vegas sub-markets compared to a year ago.
- The greatest drop in days-on-market was in the Aliante sub-market, which dropped by 40 days when compared to the same quarter in 2016.
The speedometer reflects the state of the region’s housing market using housing inventory, price gains, home
sales, interest rates, and larger economic factors. Employment growth in Clark County, although slightly less robust than in the second quarter, is still gaining strength. This, in concert with low inventory levels and competitive mortgage rates, will lead to continued above-average price growth. Given these factors, I have moved the speedometer a little further in favor of sellers.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has more than 30 years of professional experience both in the U.S. and U.K.
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