Friday, February 21, 2020 / by Ken Couture
That’s the outlook for the 2020 Las Vegas housing market — both new and existing homes when it comes to sales — and there should be slight price appreciation in both segments as well, according to housing analysts, Realtors, builders and economists who track the Southern Nevada home market.
In a sign of the strength in the new-home market, Summerlin is starting to open hundreds of acres for development north of Far Hills Avenue in 2020 and Del Webb is opening its first active-adult community in more than a decade with Del Webb Lake Las Vegas and one in North Las Vegas.
The final 2019 numbers aren’t in yet but the year is expected to fall short of 2018 in terms of closings for new and existing homes. The 43,337 existing home closings through November were 5 percent below 2018. Prices rose about 3 percent in 2019 and the median price of existing homes sold in November was $295,000 for single-family homes and $166,000 for attached homes.
There’s been 9,500 new home closings through November, 1.8 percent below 2018. The final number is expected to be a couple hundred below the 10,673 recorded in 2018.
Given how 2018 ended and 2019 began with interest rates around 5 percent slowing sales, new home closings were down nearly 5 percent in the first quarter and existing home sales were down 14 percent.
The housing market steadily improved after three Federal Reserve rate cuts brought down 30-year fixed rate mortgages below 4 percent. Because of that, there’s a more favorable outlook of the housing market than there was a year ago when some economists predicted a recession in 2020. Those predictions have dissipated even though some expect national economic growth to be slower than 2019.
National housing experts talk Las Vegas
Frank Nothaft, the chief economist for CoreLogic and one of the leading national experts in tracking the housing market, said Las Vegas will benefit from mortgage rates remaining below 4 percent and continued population growth — Clark County grew by nearly 50,000 people or 2 percent between 2017 and 2018 with a strong economy and job growth.
“Las Vegas is a magnet, and I expect continued population growth in 2020 to add to demand for housing (to buy and to rent), and continued low mortgage rates (sub-4 percent for 30-year fixed-rate through 2020) to add to homebuyer purchases,” Nothaft said. “This will likely place additional upward pressure on (home price) growth, with prices up by more than 4 percent in 2020.”
New home market from local perspective
The optimism for 2020 is reflected in how 2019 ended. Home Builders Research reported net sales (new contracts minus cancellations) continued to increase year over year in the second half of 2019 and net sales were only down 2 percent through the end of November. The 622 net sales in November was the second highest in the decade behind November 2017.
Home Builders Research President Andrew Smith said homebuilders have been converting potential buyers into sales at a higher pace in 2019, combating a “dramatic increase” in cancellations at the end of 2018 when interest rates rose.
Del Webb’s first 55-plus community in years
In a further sign of the strength seen in the 2020 housing market, Del Webb, part of the Pulte Group, will open its first age-qualified community in Las Vegas since prior to the Great Recession. It’s called Del Webb Lake Las Vegas.
Danny Welsh, vice president of sales with Pulte Homes, said they have seven new communities coming online in 2020, ranging from Summerlin to North Las Vegas and Lake Las Vegas.
One outside influence that will help with home sales in 2020 is the Federal Housing Agency (FHA) increasing loan limits by $23,000 to $345,000. That’s expected to add about 23 new communities that are available to buyers in Clark County.
Experts talk existing home sales FHA increase
“t’s very important and good thing that happened. It increases the number of homes that are available to those people. Not everyone can qualify for a conventional loan, especially first-time buyers. It’s opening up more opportunity. It benefits the buyers and the sellers and builders because they have that many more people to market their houses to.