Las Vegas, NV - February 13, 2014
Department of Business and Industry today released the Nevada Housing Stability
Index (NHSI) report for the fourth quarter of 2013. The market maintained a C grade for the second
index composite score rose to 2.03, a slight increase over the prior quarter’s
2.00 score. On a four-point grading scale,
the market earned a C grade, a marked improvement from a D+ during the fourth
quarter of 2012. A “C” grade represents
price gains in the residential market continued at a more modest pace. Washoe
County posted its highest median new home price, $352,750, since mid-2006. Statewide,
buyers continue to see new homes sell at a significant premium to resale homes.
Although many of the indicators are trending positively, caution is still
warranted when taking into account the relatively high delinquency rate coupled
with concerns about the supply-demand dynamic.
Fourth quarter findings:
Resale housing availability continued to
improve with 6 months of effective inventory, with 6.5 months of inventory in
Clark County and 3.9 months in Washoe County.
Share of purchases by investors were
down to 40.8% down from 44.6 in prior quarter, signaling an improved position
for traditional homebuyers.
Distressed home sales, which include
auction sales, short sales and bank sales, are decreasing as a percentage of
the overall total.
Housing affordability is trending toward
the optimum ratio of mortgage payments equaling approximately 25% of household
income, falling just under the benchmark at 22.8%.
While the delinquency rate- those notes
90-plus-days past due- has improved significantly from the height of the
crisis, the current rate of 7.7% still warrants caution.
In addition, indicators show growing
disparity between new and existing home sales with a 60% price premium for new
The Nevada Housing Stability Index can be downloaded
from the Department’s website at business.nv.gov/News_Media/Publications.
About the Nevada Housing Stability Index
The index is
intended to monitor the overall health of the statewide Nevada housing market
and provide a barometer of market stability. The index is comprised of 12
independent components such as underwater loan percentages, housing turnover
rates, affordability ratios and foreclosure volumes. Each measure is weighted based on relevance
and importance to the overall market’s performance. The individual components and composite index
is assigned a grade based on a 4.0 grade point average (GPA), with a “C” grade
representing average quality. Note: Data from prior reports are subject to
revision based on latest information available.
About the Housing
and Data Index Project
Nevada has led the nation in residential foreclosure filings and
negative net equity since the beginning of the housing market collapse.
Researchers agree the absence of systematic housing data has been prohibitive
in the development of meaningful policy and programs that would aid in the
recovery of the housing market. The project, a joint initiative of the
Department of Business and Industry and the Lied Institute for Real Estate
Studies at UNLV, provides a mechanism for extensive collection of data and
analysis of current and future Nevada housing market trends. This data will aid policy makers in
establishing public policy, legislation and programs as well informing the
general public. Project initiatives include the publication of a monthly
Housing Market Report, quarterly Nevada Housing Stability Index and convening a
biannual Housing Market Forum.
Department of Business and Industry
The Nevada State
Department of Business and Industry is a cabinet level agency in Nevada State
government. Our objective is to encourage and promote the development and
growth of business and to ensure the legal operation of business in order to
protect consumers by maintaining a fair and competitive regulatory environment.
The Director’s office at B&I manages a number of programs and initiatives
to address the needs of small businesses, homeowners and consumers including
small business advocacy, bond programs, access to capital, housing retention
programs, constituent services and fraud prevention and education.