Inventory continues its gradual rise

Here in Clark County, inventory is still creeping up. We are a long way from a buyers market but we have more than month's work now and a traditional healthy inventory is 4-5 months. Things remain tight but buyers are starting to pass on overpriced listings and properly priced listings are getting a few offers hovering in the vicinity of asking. 

Overall we seem to be heading in a more healthy direction. Buyers are struggling with rising rates and sellers seem to be sensing the top of the market. Economic conditions still seem favorable for housing but a recession is almost inevitable at this point and that may slow the market a bit more, possibly leading to a modest dip in prices or at least a flat market for a few months to a year.

The median home price in Clark County is hovering around $560k with median household income at $78,000. The median household can purchase the median home but they will have to have strong credit and few or no other debts to pull it off. With a recession on the horizon, wages may flatten out and that alone will tug back on this crazy bull run in local real estate.

I would advise buyers to be prepared to stay in their home for at least a few years just in case we have to ride out a market downturn. Owning a home remains an excellent way to build wealth but there are times when patience is required to make that dream a reality. 

Inventory is now back to 1 Month

After a the tightest inventory levels in Clark County history earlier this year inventory has been increasing the last several; weeks and now stands at a still tight, one month. But we were at 12 days a few months ago. Although the market is showing signs of a mild slowdown, one month of inventory still puts us securely in a seller's market.

This is particularly true in the single level detached home market. Small homes with one level are getting hit by two large demographics, the starter home buyer and the aging step down buyer. The pressure in this segment is still red hot. other categories such as condos and large two story homes are softening up a bit. Young first time home buyers are well advised to consider two story homes rather than single level as the older buyers tend to shy away from stairs.

With inflation continuing to pressure interest rates, buyers in the entry level price range need to act soon. Even if prices start to level out or even dip a little the effects of higher interest rates will make the home more expensive. Once priced out of the market it can be very challenging to get back in.

Here is some more data from the latest market action report on our local MLS.

Is the market showing signs of slowdown?

Last week there were 171 new listings that came on the market in Clark County in a single day. This is great news for buyers as our market has had such a tight inventory for so long. If this trend continues we could see a bit of a softening int he tensions for buyers. I do not foresee prices tumbling at this point, but I do see prices flattening out and maybe even dropping just a tad. 

Sellers will not longer be able to expect multiple offers tens of thousands above asking if the inventory settles into a more healthy 3-6 months. A few months back inventory levels were measured in days! With our local median price hovering near $600,000 we could stand to see a a very modest slowing to help keep pace with incomes and the challenges with the high inflation currently infused into the economy.

It will also ease a little pressure in the "bubble" that can carry us through an minor recession that is likely to hit sometime in the next 18 months. Buyers using low downpayment products like VA and FHA should not be afraid to buy in this market, but always remember that low interest loans should be viewed as a longer term prospect. If the market softens you may have to stay in the house for 3-5 years to gain enough equity to get out. Of course if the recession does not come you may be able sell the very next year and come out ahead. It however is not wise to assume the recession will not come, but rather assume that it will.

Buying a house should be a long term investment and remember it is one of the few investments that provide a mandatory commodity of shelter, shelter that you otherwise have to pay rent and make someone else rich.