Challenges Persist in Las Vegas Real Estate Amidst Rising Interest Rates and Supply Shortages
Real estate agents in the Las Vegas area are facing significant challenges due to high interest rates and a shortage of housing supply. Shay Stein, a Las Vegas real estate agent with Redfin, noted that while interest rates hit historic lows during the pandemic, they have now climbed back above 7 percent for a 30-year fixed mortgage, affecting both buyers and sellers.
The drop in mortgage rates prior to the pandemic fueled a buying frenzy, leading to a surge in home prices. However, the current high rates are deterring sellers from listing their homes, further limiting the already low inventory in the Las Vegas Valley. This has created a challenging environment for both buyers and sellers, with many decisions being tied to interest rates.
According to Multiple Listing Service data, the Las Vegas Valley has seen a 34 percent decrease in home listings from January 2023 to January 2024, while the average home price has increased to $445,000. Despite record-high home sales in 2021, with over 50,000 units sold, sales dropped to around 30,000 in 2023, the lowest since 2008.
Tim Kelly Kiernan, branch manager of Realty One Group’s Summerlin office, highlighted the dramatic decrease in available homes, with around 3,500 single-family homes listed on the MLS compared to 5,400 in the previous year. This has led to a challenging market where agents must be patient in helping clients navigate the buying and selling process.
While the Federal Reserve aims to bring inflation down to 2 percent, concerns about a recession have delayed expected rate cuts. Fed Chair Jerome Powell recently indicated that a March cut in interest rates looks unlikely, leading to uncertainty in the market.
Overall, the high interest rates continue to impact the national residential real estate market, with many buyers remaining on the sidelines. Mortgage-purchase applications have dropped, and pending home sales are down 7 percent year over year, reflecting the challenges faced by the industry.
