It's a Roller Coaster it's Peaking - it's Cooling!Well, What is The Las Vegas Real Estate Market Doing?
If you are a borrowing buyer, notice that the cash buyers that were grabbing the homes that you wanted - are leaving the market.
You will have a chance to purchase the home that you want for a price close to the listed price. Over 50% of the homes on the market are lived in and in good condition too.
Less than 10% of the market is foreclosure homes. The remainder is short sales which do take a little more time since the banks have to approve the price.
If you are a traditional seller, notice that the values have stabilized since September. You will probably be selling to the future home owner versus the cash investor. The buyer will be interested in the inspection and the overall condition of your home because he is going to live in your home.
Normal appreciation is 5% to 8% per year throughout the country. In 2011 and 2012, during the boom, prices skyrocketed over 40%. During the recession and the foreclosure storm, prices plummeted. Now, expect the prices to inch up like a normal market.
What Is A Normal Market?
In a normal market, the available inventory is a six month supply. In normal market, national monthly sales are around 5.5 million. Las Vegas is moving in the right direction.
In October there were 15,011 available and contingent homes, and 7072 were without offers. 2,627 were sold (closed escrow) in October. Nationally there were 5.1 million sales.
In a normal market, home values inch up steadily. In Las Vegas, October was a normal month price wise with lower than normal sales. In fact the median "list price" of a home in the month of October was $185,300 and the median "sold price" was $185,000.
More borrowers than cash buyers help to keep the values stable. The borrowing buyer has to have an appraisal. The lenders are under strict guidelines so prices are base on replacement values.
Greater Las Vegas Board of Realtors reports resale median sales price of single family homes is at $185,000 for 3 consecutive months. The median price increased from $150,000 in January through July.
The median price has not fluctuated much since July when the median price was $180,000. Lower than normal signed contracts in October signify that the next few months' sales might be on the low side so prices will remain stable.
Short Sales - The Unkowns
In Nevada, "the unknowns" are the foreclosure market and the short sale market. The banks will control how many foreclosed homes they put on the market over time.
The banks could negatively affect the values if they flooded the market. That would hurt the banks as well. Notices of defaults have fallen from 3688 per month to 175 in October. November and December will probably stay under 200 notices per month.
The short sale market is anyone's guess. Reports tell us that around 40% of the Las Vegas home owners are under water.Well, many of them have decided to stay in their homes and to pursue mortgage relief programs, to refinance, and/or to pay their mortgage.
The values have increased over the past couple of years and that has reduced the gap between their mortgage and the value of their home.
Las Vegas - What About The Economy?
Most businesses agree that they were hit the hardest in the country. They feel that the recovery has been steady over the last 3 years.
The business community in general has created 30,000 new jobs this year and the goal of 50,000 jobs by 2014 has been exceeded over the past 3 years.
The unemployment rate is still high at 9.3%. The construction industry lost over 100,00 jobs in the recession. Only 25% of those jobs have been recovered.
The new housing industry has seen a recovery in 2013. New home prices rose 32% and new home permits are up 23% and closings are up 51%.
Dennis Smith reported that the new home builders are planning on pulling more permits in 2014. Smith reported in his Las Vegas Housing market letter that the median price of a new home is $285,000.
Overall, Las Vegas has an infrastructure like no other place in the world. But that's another topic for another day.
To summarize, the real estate prices are stable, the interest rates are low, jobs are being created, businesses are making profits, and the future looks bright.