Las Vegas, NV -
December 12, 2014Nevada’s
residential housing market continues to achieve increased stability, according
to the third quarter 2014 Nevada Housing Stability Index. The index points to more measured improvement
across a number of areas and supply-demand conditions which are better aligned
that at any point in the post-recession environment.
The
index composite score saw a slight uptick from 2.18 the preceding quarter to 2.26
during the third quarter of 2014, maintaining a C grade that was first achieved
one year ago. Only one individual component of the index, the measure of the
price premium of new construction over existing home price averages, saw a
decline.
The
index is intended to monitor the overall health of the statewide housing market
by taking into account twelve weighted ratios and performance metrics to
develop a measurement of stability. An aggregate grade of a “C” represents an
average quality housing market.
Q3 2014 highlights:
·
Foreclosure volumes remained flat and
delinquency rates continued to fall, at 2.3 percent and 5.8 percent
respectively.
·
Investor purchases statewide fell from
37.3 percent in the third quarter to 29.9 percent and down from 44.6 percent a
year ago. In southern Nevada investor
purchase share was 31.7 percent; northern Nevada, 21.9 percent.
·
Median prices statewide increase 3.8
percent to $189,000 with an increase of 2.8 percent in Clark and 5.9 percent in
Washoe County.
·
The component measuring the ratio of
total number of first home loans relative to employment earned an F, showing
the worst individual performance on the index.
·
The effective months of resale housing
availability is up slightly, but still below optimum levels with 5.1 months of
supply.
·
The lone metric recording a decline on
the quarterly index, new-to-resale price ratio, shows a 61 percent pricing premium
for new home construction, up from 54 percent the prior period and considerably
higher than the recession. Key
contributors to the outsized premiums include square footage and rising land
values.
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.
About the
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.
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