LAS VEGAS (KLAS) — The housing market has a cycle. A real estate expert told 8 News Now that southern Nevada was overdue for a slow down, and the pandemic just accelerated that.
Before COVID-19, the rates in southern Neveda were abnormal compared to other parts of the country.
“The market has been growing at a rapid pace, since 2019 the rate of growth has been almost double digits,” said Vivek Sah, Director of the Lied Institute for Real Estate Studies at UNLV.
Sah says we need to look at the effects of COVID-19 in the short term and long term.
In the short term, housing prices are going to dip. People selling to upgrade their home will need to adjust their expectations in terms of price, and how many offers they’ll get.
Sah told 8 News Now we’ll be moving from a sellers market to a buyers market.
“They will not only be able to negotiate a decrease in price, but they were also able to get all the concessions such as seller-paid closing costs,” Sah said. “Those days will be back.”
With that said, Sah says because of the layoffs in key industries such as gaming and hospitality, people will not be rushing out to buy a home.
People that were once saving up to buy will now have to dip into those savings. This will impact southern Nevada in the long run.
“But as the economy recovers and as the restrictions are loosened and jobs start to come back, we’ll see the market recover,” Sah said.
That recovery will be stronger than in 2008. Sah says there are more jobs that are resilient to these shocks, and there are stricter rules for lending.
“It gives us a lot of comfort that the loans out there are pretty strong and robust, and unless someone has a financial hardship due to the job loss or furlough, people are not likely to default,” Sah concluded.
Sah says that people,who are selling their homes to relocate, will not have much choice in the process right now. Buyers will want to negotiate heavily, and ask for discounts.