As the summer heat settles in, we conclude the second quarter of 2006. This report is a review of the real estate activity in Mesquite, Nevada.
Total listings submitted “For Sale” to the local MLS system 269; compared to 260 in the first quarter 2006, this includes all real estate categories. For 2005 second quarter, 217 listings submitted, new inventory up by 24%.
Total “Sold and Closed” as recorded in the local MLS system 145, compared to 157 in the first quarter 2006, this includes all real estate categories. In 2005 second quarter we closed 224 units total, which is a 35% drop in sales by comparison of 2005 vs. 2006 second quarter closings.
Single family lots have jumped up 44% in price, from $199,113 average sale price for the eight that sold in the second quarter of 2005 to $287,190 average price for the ten that sold and closed in the second quarter of 2006. These new prices will be reflected in the new construction costs and in new home prices.
Commercial buildings closed higher in price by 45% from an average of $132 per foot in the second quarter of 2005 (4 closed) to $192 per foot for the second quarter of 2006 (5 closed). Commercial land currently has an average asking price near $20 per square foot, or $871,000 per acre. It cost you more to be in business today by a large margin.
Single family residence prices are up 24% from the second quarter 2005 to the same time period of 2006. From an average price of $273,844 to $359,557 (from $149 to $185 per square foot.) However they have gone from an average of 51 days on market to 118 days. The number of sales has dropped by 45%, from 127 in 2005 to 70 in 2006.
Town home/condo unit prices are up 4% for the second quarter 2006 from the same time period for 2005. From an average price of $208,229 to $217,211, ($154 per square foot to $164 per foot average sale price.) While sales are down 27%, from 77 in 2005 to 56 in 2006. Days on market or marketing time has extended from an average of 40 days in 2005 to 85 days in 2006.
Building permits issued during the second quarter by the city of Mesquite. Single family residential permits, 223 issued in 2005, 71 issued in 2006, down by 68% for the second quarter 2006. Multi-family permits 8 issued in 2005 and 13 issued in 2006, up by 38% in 2006. Commercial building permits issued for the second quarter, 5 in 2005 second quarter and 1 in the second quarter of 2006.
Units listed “For Rent” in the news paper and on the internet have increased dramatically. There appears to be around 100 available, not including condo conversions or apartment buildings. There are many brand new, never lived in units available for rent. The competitive rental market is leading to incentives like “first months rent free.” Not a healthy environment for speculators who are faced with negative cash flow in a strong rental market. Plan B for many speculators, if it does not sell, is to put it into the rental pool.
At the end of the second quarter 2006, looking at the whole market picture of what is “for sale.” This includes “for sale by owners”, builders unlisted inventory, and property listed but not accessible to local realtors in the local system. There appears to around 400 properties available for the buyers to choose from, which based on the monthly average 2006 sales numbers is about a ten month supply.
The average asking price per square foot for single family homes today is around $205, while they are selling for $185. This illustrates how far sellers are from reality. Since the residential sales this quarter are selling on average, within one percent of asking price. In other words, those priced right are the ones selling.
Mortgage rates edged up to 6.9% for a thirty year fixed rate, historically a great number, it is the higher prices making it tough for people. Higher rates and the fact that the Federal Reserve board may not be finished with the rate hikes mean the exotic mortgage and negative savings rate time bombs keep ticking away.
Looking at the recent trends in the numbers and in conclusion; in my opinion the numbers look better than the market feels, buyers are very tentative and sellers very anxious.
I believe we better all fasten our seat belts for the “soft landing.”
We appear to be coming in hot and steep.
While the numbers are based on facts from what we believe to be reliable sources, they are not guaranteed; please do your own research.
For your complete daily market update, go to Mesquitemarket.com or tune into Radiomesquite.com for “Talking Real Estate” Saturdays at 3pm pacific time.
Please feel free to contact Chris Miller with any questions or comments at 435-862-5951 One last thing, I would like to hear your definition of a “Soft Landing”, or what goes beyond a soft landing in your mind, what does that term mean to you? Let me know on the comments section of mesquitemarket.com