Las Vegas Housing Ceases To Be A Drag

It seems that the nationwide housing market has finally ceased being a drag on the overall economy and is now actually a source of strength.  According to a recent article in USA Today, Mark Zandi, chief economist for Moody’s Analytics, no reports that “housing is finally contributing to the economy’s growth instead of pulling it down.”  Mark expects the housing sector to account for approximately one fifth of the U.S. economy’s overall growth in 2013.  This is a stark contrast to 2009 when the housing industry actually subtracted one full percentage point from the country’s GDP growth.  It is not unusual, however, for the housing market to lead the overall economy out of recessions, which is why the housing recovery is particularly good news for the broader economic outlook moving forward into 2013 and beyond.

David Crowe, chief economist for the National Association of Home Builders, notes that with rising prices and more new home construction, “the recovery will start to feel more normal.”  New home construction is especially important to economic stimulation because it generates sales outside of the sale of the home itself as new home buyers purchase furniture, appliances and other hard goods.  

The Las Vegas market is one of the regional markets leading the country’s housing recovery.  Las Vegas’ median home price has risen steadily for the last 9 months in a row.  Simultaneously, the supply of REOs and other reasonably priced properties has slowed to a trickle, creating even more demand for an already strong sellers’ market.  New home starts are also up year over year in the Las Vegas valley.