Friday, August 25, 2023

Are Prices Falling in Clark County?

The data suggests that home prices are pretty stable. All of the negative data about sales volume are really based on our lack of inventory. You can't sell allot of houses when you have no inventory to sell. This lack of sales volume has led to doomsayers in the media claiming that the market is in decline. The market is neither hot nor cold right now. We are truly in a middle market that would be dead neutral if we had more people willing to sell their homes.

If we were to see a rapid rise in new listings, then perhaps a market downturn could happen but I suspect that new home construction would suffer more than resales in that scenario. New homes have been taking up the slack in the resale market lately. New homes also represent a ceiling in the resale market. Generally a buyer is willing to pay 5-10% more for a brand new house versus a resale all else being equal. 

There has also been chatter in the media about price reductions that are occurring in the marketplace right now. Yes sellers are reducing their prices when they start out too high. In a neutral market buyers tend not to overpay for homes. Overly ambitious sellers will find themselves without offers if they keep the price above market. One only needs to look at the results when sellers are properly priced in the market to see that there is plenty of demand. We still see many homes selling in a matter of a few days when priced right.

Overall this is a good time to sell and for buyers it is a challenge. Rising interest rates are slowly squeezing buying power and sellers remain reluctant to exit their low interest loans by selling and buying another house. It is a bit of an economic stalemate right now but to answer the title query, no prices are not falling.

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