Expectations for 2017 Las Vegas housing market
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.