Southern Nevada’s red hot housing market continues to cool off, according to the August numbers released by Las Vegas Realtors (LVR) but isn’t showing any signs of a sharp pullback. There are, however, notable changes in the housing market, especially growing inventory, while higher mortgage rates become less affordable for home buyers.

“It happened almost overnight, and nobody anticipated it,” said corporate broker Vandana Bhalla. “I felt like one week prices were going up, and then the next week there was nobody buying anymore,” she added.

According to the latest numbers from LVR for the August housing market in Las Vegas, the median price dipped slightly to $450,000. That’s down 3.2% from July but remains strong year to year, up 11.1%.

Available housing inventory, however, is showing a dramatic shift. LVR says there were 10,644 available single-family units in August. A 43% increase compared to August of 2021. There were also 7,997 homes listed without offers, up 145.6% from twelve months earlier.

Based on simple supply and demand, more inventory leads to downward pressure on prices, but many realtors say buyers shouldn’t wait on the sidelines for prices to fall even more. The reason, they say, is rising mortgage rates which can offset any savings a home buyer might enjoy by waiting for price reductions, especially at a time when so many sellers are sitting on older home loans with near-record low-interest rates.

“Buyers, for the last three or four months, are convinced we’re going to drop more than we are,” said David Lee, Las Vegas real estate veteran. “Sellers are not having to sell their home because their loans are very strong. And, they can rent them out still for a high amount, so you have the standoff between sellers and buyers that I haven’t personally experienced in 15 years.”

Lee believes the existing dynamic between slipping prices and rising interest rates can ultimately cost a potential buyer more money.

“I’ve had a buyer that right now that was waiting three months ago. Basically, he is paying more now in the interest rate compared to the price drop that has happened on a home, and before he sees that get any worse, he’s finally committing, and we’re putting in an offer actually tomorrow,” Lee said.

Lee says, while the local real estate market may be softening, demand remains strong, especially with the ongoing migration to Las Vegas from other parts of the country, especially California. As a result, Lee doesn’t foresee any dramatic shifts in home values, but instead, a less volatile market in the coming months. “For a healthy housing market, you want it to be stable,” said Lee. “That’s what we’re heading into. That’s why buyers need to get in if they’re going to buy a home and not wait.”

Bhalla also sees growing inventory, which is opening a few more front doors for buyers. According to Bhalla, “we’re still at a point where we don’t have enough inventory. So, we look at that over the course of how long has it taken homes to sell, right? What is the timeline? How many weeks’ worth of supply do we have? Are the prices going down? Because realistically, they were what were we seeing the median home price actually went down in August to $450,000 from $482,000 In May, so a $32,000 decrease, so yeah, sellers are being a little bit more open about providing concessions to the to buyers which is which is great.”

*Story originally appeared on Channel 3 Las Vegas

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