The most common question I get asked every day is, “How’s the market?” Simply put, the market is great and stronger than ever. That’s the answer everyone expects from me and understandably they’re usually reluctant to believe it.
Firstly, I’m a real estate agent and they feel I’m trying to sell them something. Secondly, after so many people were hurt so badly after the financial meltdown 10 years ago, it’s hard for some people to believe or admit it. I want to address this by discussing some truly staggering data I reviewed earlier this week. I felt so strongly about this data that it prompted me to share it with as many people as people!
One thing I hear from many clients is, “There are so many homes being built, the market is being overbuilt! It feels like 2008 all over again!” This is actually false as evidenced by the first 3 stats.
1. New Home Market Share – The peak of new home market share was 45.7% in 2006, currently it’s at 16.2%
2. New Home Permits – The peak of new home permits was 32,658 in 2004. The low of new home permits was 3,740 in 2011. Currently it’s at 10,292.
3. Actively Selling Subdivisions – Most of the actively selling subdivisions are in the perimeters of the valley – Seven Hills, Inspirada, Mountain’s Edge, Summerlin, etc. The peak of actively selling subdivisions was 550 in 2007. Currently it’s at 226.
4. Notices of Breach and Default/Trustee Sale/Foreclosures – This is one of the most startling examples of how far we are from the housing crisis, the market isn’t even close! Notices of Breach and Default are down 94%, Notices of Trustee Sale are down 97%, and Trustee Deeds (foreclosures) are down 97%.
5. Mortgage Defaults In Nevada – The peak was Q4 of 2009 where there were 134,159 mortgage defaults. The lowest? Q1 of this year where there were 18,758 mortgage defaults. I’d wager the following 3 quarters of this year continually beat it!
6. Mix of Resale Closings – Distressed sales generally consist of shorts sales, foreclosures, and REOs. The peak of distressed sale closings was 72.8% in 2011. Currently only 4.6% of all resale closings are distressed!
7. Share of Homes With Negative Equity – The peak was Q1 of 2010 where 72.7% of homes had negative equity. The lowest? Q1 of this year where only 6.8% of homes had negative equity.
8. Housing Affordability – 2004-2007 were the peak where people and banks together were pushing the boundaries of what they could afford, often going to the point of no return. Currently we’re at a very healthy 3.75.
Conclusion – you can see how these stats debunk some of the most common myths you hear about the Greater Las Vegas real estate market. The underlying data is very robust and nowhere near the levels we saw leading up to the housing crisis and during it.