The Las Vegas Condo Market is Interesting Again

Prices move rather dramatically against low supply

We normally focus most of our attention on the single family market since the Clark County housing stock is dominated by single family. However, condominiums, which make up about nine percent of the housing stock, has gained our attention due to price movement within the sector. In year-over-year measured from November, median prices are up almost 16% while single family homes have risen by 9%. Median days on market for condominiums has shrunk to 23 days while single family also remains at a below typical 27 days.

Months-of-supply, or the time it would take to clear the active inventory at the recent pace of sales, has fallen to under two months (excluding high-rise) for condominiums and townhomes so it is natural to see some price pressure in the sector. Recently we have seen muted listing activity but relatively strong demand. While affordability generally remains suitable for households near the median income, condominiums are picking up some interest as first-time homes or in some cases, a move-down or second residence. Additionally, the condo market was challenged during the recession by a lack of financing options as owner-occupant to investor ratios were weighted towards investors, construction litigation was frequent and banks generally had concerns about the viability of the housing segment.

In 2013 when investors had strong interest in the Las Vegas Valley, 65% to 85% of all condos traded through the multiple listing service were cash sales. Recently that number has dropped down to 55%. Investors remain a key component of the buyer pool, however owner-occupants are again accessing the market. On a relative value basis, we could see condo prices move at a higher rate than single family.