Usually when we hear that a market is cooling or has taken a dip, anxiety sets in. But in regard to the housing market for potential Las Vegas buyers, that shouldn’t be the case.
The U.S. real estate market has been hotter than a Vegas summer for several years. Home sales started picking up before the pandemic, but 2020 and 2021 whipped up a homebuying frenzy that drove home value appreciation rates higher than ever before. Buyers struggled with affordability as prices jumped, and many had a hard time finding a new home at all as inventory dwindled.
As the real estate market starts to cool, those conditions are changing. Here’s what that means for Las Vegas homebuyers.
Home prices are coming down
In June 2022, home prices in Las Vegas hit record highs. The median value was $433,000, a 22.9% jump from June 2021. Since then, the market has started to cool, and that price has dropped. The current median home value is $403,500, a $29,500 difference. Additionally, in the last two months, more homes have experienced price cuts than ever before. A record-setting 45.2% of listed homes dropped in price in August, and 44.8% did so in September.
For buyers, decreasing home prices mean more affordability—especially if you’re buying in cash.
If you’re not buying in cash, chances are current mortgage rates have you stressed out. But if possible, you shouldn’t let higher rates prevent you from buying a home. Why? Because though interest rates are higher than they were in 2020 and 2021, they’re still historically low. See the following graph from the St. Louis Fed that demonstrates the average U.S. mortgage rate since 1971.
The ultralow rates from mid-2020 to mid-2021 were unprecedented, and we don’t foresee their return in the near future. If you’re not excited about a mortgage with a higher interest rate (who is?), remember that you have the option to buy the home you want at the current interest rate and refinance later if rates drop.
Contingencies re-enter the scene
When interest rates were at their lowest point, many Las Vegas homes sold in bidding wars, over the asking price, in just a few days. A record number of buyers were looking for homes in a low-inventory market, so sellers had most of the negotiation power. That means things that buyers can normally ask for during the home buying process—like inspection and home sale contingencies—disappeared. Sellers were looking for the fastest, cleanest sale possible and buyers eliminated any potential bumps to stay competitive.
But as the market cools, that’s changing too. Rising interest rates and a flood of inventory have reduced homebuying competition, which means buyers have more leverage. We’re seeing the reappearance of inspection contingencies—the clause that makes a home sale conditional on a clean inspection—and home sale contingencies—the clause that makes the purchase of a home conditional on the sale of the buyer’s current home.
What does this mean for Las Vegas buyers? A better shot at having a contingent offer accepted by a seller. Contingencies are important for buyers because they give you more protection during your real estate transaction. With an inspection contingency, you can back out of a deal if the home inspection uncovers defects that the seller won’t repair, and a home sale contingency protects you from ending up with two mortgage payments if you need to buy and sell at the same time.
Options open up
This cooling real estate market also comes with added home inventory—giving you more options. Gone are the days of only a house or two in your desired area. In August, there were 3,885 homes for sale in Las Vegas, and in September, that number jumped 7.9% to 4,191. At the same time, the number of homes sold each month is dropping. There were 745 Las Vegas homes sold in August, and in September that number dropped 6.9% to 699.
For homebuyers, that means there’s a greater number of homes available every single month. You don’t have to snap up the first one you see. Instead, you can dust off those must-have and nice-to-have lists and be selective, taking the time to find the home you really want.
You’ve got time to think
Speaking of time, the cooling real estate market means you have more of it. The average number of days a home spends on the market is up to 47 in Las Vegas—a big jump from its 2022 low at 15 days in April. The current average time a home spends on the market in Las Vegas is in “neutral” or “balanced market” territory. In a seller’s market, homes usually sell in less than 30 days. That’s been the norm for the last two years, but as the average number of days climbs, Las Vegas is headed out of a seller’s market and into a balanced one where supply and demand are equalized.
What does that mean? You no longer have to make high-pressure, snap decisions about buying a home. Instead, the cooling market means you have time to consider each option carefully. It’s true that houses in some desirable areas will sell faster than others—and when you find your dream home, we encourage you to jump in. But overall, the amount of time you have to visit multiple options, find the right home for you, and construct a winning offer is rapidly trending upward.
Ready to buy?
We’re ready to help. The Joe Taylor Group is Las Vegas born and raised, and we’re experts at navigating Las Vegas’ shifting real estate market. Whether you want to buy your first home, need to buy and sell at the same time, or have a different real estate situation as unique as you are, we’ve got your back. Tell us exactly what you’re looking for, and our team will help you make it a reality. Fill out the form below to get started.
When you're ready to dip your toes into the market in Vegas, make sure to schedule a call with us—we'll guide you every step of the way.