Ex­pec­ta­tions for 2017 Las Ve­gas hous­ing mar­ket

Las Vegas Review-Journal (Sunday) - - Real Estate -

As an­other strong year for the hous­ing mar­ket has come to an end, it’s time to ex­am­ine the hous­ing out­look and ex­pec­ta­tions for the new year.

Ex­ist­ing-home sales are fore­cast to muster only a small gain in 2017 be­cause of in­creas­ing mort­gage rates and shrink­ing con­sumer con­fi­dence.

How­ever, now is a good time to buy a home, ac­cord­ing to new con­sumer sur­vey find­ings and a 2017 hous­ing fore­cast from the Na­tional As­so­ci­a­tion of Re­al­tors.

NAR’s Hous­ing Op­por­tu­ni­ties and Mar­ket Ex­pe­ri­ence sur­vey, which asked re­spon­dents about their con­fi­dence in the U.S. econ­omy and hous­ing ex­pec­ta­tions for this year, re­cently found that 68 per­cent of home­own­ers think now is a good time to make a home pur­chase, com­pared to 82 per­cent in De­cem­ber 2015.

Even with this dip in buyer en­thu­si­asm, the mar­ket did well and ex­ist­ing sales closed 2016 at 3.3 per­cent higher than 2015, reach­ing around 5.42 mil­lion, which is the high­est since 2006 when sales to­taled 6.47 mil­lion.

In 2017, sales are fore­cast to grow roughly 2 per­cent to around 5.52 mil­lion. The na­tional me­dian ex­ist­ing-home price rose by about 5 per­cent in 2016 and is ex­pected to rise by about 4 per­cent in 2017. By the end of the year, mort­gage rates are ex­pected to reach around 4.6 per­cent.

“In light of these find­ings, while we have a sta­ble mar­ket here in Las Ve­gas, there is still some room for growth be­cause our hous­ing prices are right in line with the na­tional av­er­age of $234,900,” said David J. Tina, 2017 pres­i­dent of the Greater Las Ve­gas As­so­ci­a­tion of Re­al­tors.

“But what sets us apart from other com­mu­ni­ties is (that) we have so much more to of­fer than just hous­ing. What most fore­cast­ers don’t take into ac­count is our low prop­erty-tax rate, nearly 320 days of sun­shine each year, and all of our nat­u­ral and man-made recre­ational ameni­ties. Las Ve­gas is a great place to live.”

Tina went on to say that in or­der to ul­ti­mately see growth here, the Las Ve­gas mar­ket needs to have more homes put up for sale, and that should spur an in­crease in home­buy­ing.

Here are a few of the trends and pre­dic­tions Tina ex­pects to see play out in the new year:

Tight in­ven­tory con­di­tions will con­tinue. Re­cent data from NAR and GLVAR shows that the sup­ply of ex­ist­ing homes for sale is not suf­fi­cient, and new home con­struc­tion is not meet­ing de­mand. More buy­ers are com­pet­ing for a smaller num­ber of af­ford­able homes than a year ago, which likely will con­tinue in 2017.

In­creas­ing home prices. With de­mand ris­ing and list­ings scarce in many mar­kets, such as South­ern Ne­vada, NAR fore­casts home prices will in­crease na­tion­ally by about 4 per­cent in 2017. In cities with the tight­est hous­ing sup­ply, prices could ex­pand above dou­ble dig­its.

Ris­ing mort­gage rates. The re­cent rise in mort­gage rates likely will con­tinue in 2017 with ad­di­tional in­creases.

Wan­ing con­sumer con­fi­dence. Rents and home prices out­pac­ing in­comes and scarce sup­ply in an af­ford­able price range will con­tinue as a prom­i­nent head­wind for many prospec­tive buy­ers this year.

Buy­ing a home can some­times be a chal­leng­ing process but with a lit­tle work and a Re­al­tor — a mem­ber of the GLVAR and NAR — at your side, 2017 may be a good time to start look­ing.

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