National housing market headlines have been painting a picture of an unbalanced market characterized by a notable supply shortage. Pro Teck Valuation Services zeroed in on the Nevada market in its most recent Pro Teck Valuation Services Home Value Forecast to illustrate that fact, saying, “what’s happening in Vegas is not necessarily staying in Vegas—Nevada’s housing market is facing a lack inventory on par with the rest of the country.”
Assuming demand returns to pre-crisis levels, Pro Teck asserted Nevada has a 138,000-home “housing deficit” as of 2017, which stems from the market’s reaction to the housing crisis.
Looking back to pre-crisis days, Pro Teck estimated about 29,000 single-family housing starts per year in the nine years before the crisis. In 2009, housing starts plummeted to just 4,633.
While home building is increasing over the past few years, there were 12,832 starts recorded in 2017, about half the pre-crisis level.
Pro Teck estimated that if 38,000 homes were built per year in Nevada starting now, it would take until 2028 to meet “historical market needs.”
In the meantime, that leaves the Nevada housing market with low inventory and steeply rising prices. The Greater Las Vegas Association of Realtors reported a 16.2 percent decline in housing inventory over the year in June.
“Unfortunately, the slow-down in production during the housing crisis has put the entire state significantly behind, a phenomenon we are seeing across the country,” said Tom O’Grady, CEO of Pro Teck.
This sentiment has been iterated throughout the industry by several experts and economists. The most recent National Association of Realtors Existing Home Sales Report, revealed just 4.2 months’ supply of homes available at the national level, prompting NAR Chief Economist Lawrence Yun to say, that the amount of inventory making its way to the market this spring “was not even close to being enough to satisfy demand.”
Learn more about how home prices are impacting other markets: