Ep#31 French Workbench- There are good reasons a housing crash is not going to happen

The Las Vegas housing market is scorching. Home sales are up from last year, and prices are setting new highs. Inventory is decreasing month after month and cannot keep up with demand. People continue to flock to Las Vegas from higher-priced areas, particularly Southern California, putting pressure on housing demand. According to industry experts, this trend has accelerated during the pandemic, with home sales in the area reaching their highest level in 14 years. In Southern Nevada, median resale prices of single-family homes are reaching new all-time highs almost every month, buyers have flooded properties with offers, inventory is limited, and builders have raised prices and put buyers on waiting lists on a regular basis. The median sales price of previously owned single-family homes, went from $375,000 in April to $385,000 in May, which is up 2.7% from last month and up 22.2% from the prior year. Many homeowners are developing a dread of missing out as housing prices rise, believing that there will never be a better moment to sell. Based on these trends, the Las Vegas housing market is expected to remain hot until the end of the year due to a shortage of existing homes. According to Nevada Census data, it is projected there will be a 1.51% increase in population between 2020 and 2025, as well as a 1.46% increase in median income in that same timeframe. All these factors will lead to less supply and will help keep the single-family price levels strong. The housing supply in Southern Nevada now at 0.6 months, well below what is considered necessary for a balanced real estate market. Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 6 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers. The rental prices in Las Vegas are also increasing. Despite the high unemployment rate, rental vacancies have been trending downward to record-low rates.