The real estate market in Southern Nevada heated up in the early months of 2018. Houses appreciated in value and were selling at an alarming rate. They lasted an average of two weeks and, in some cases, they were sold in days. What caused this heat? Reports showed that many of the new homeowners came from California. They migrated to Las Vegas for more affordable housing options. However, as the temperature cooled, so did the hype. The Las Vegas real estate market started to experience a steady housing slowdown. Unfortunately, this is having a negative impact on sellers. They are not seeing a flood of applications and they probably will not, for a while. So, what caused the market to cool? Is there hope for the Las Vegas real estate market?
Mature Stage of the Economic Cycle
Sales have peaked and have begun to decline. This means that growth in home prices has slowed down. With price fluctuations from late 2018 until February of this year, there is no certainty when the cool-off will end. Sellers will need to be more creative with their pricing strategies to attract buyers. However, if the California migration continues, there is still hope for sellers.
High Interest Rates
Realtors believe that high-interest rates contributed to the slowdown in the Las Vegas real estate market. Rates rose to 5%, which made homes less affordable for buyers. Although the rate recently dropped to around 4.5%, the reaction from buyers is yet to be seen.
Other Factors Are Contributing to the Cool-Off
The political climate has also impacted the market. The recent government shutdown and the upcoming election are adding another layer of uncertainty. Buyers and sellers are being very cautious with their reactions, and this is keeping the real estate market in check.
What does this mean for the Las Vegas real estate market? Speculators believe that the market will continue to cool off for a little while, possibly until the middle of the year. However, they are optimistic that price growth will not be negative in the near future.