Las Vegas Real Estate Update
Home inventory in Las Vegas is still at a very low level. The good news is that it looks to be turning around and increased almost 10% in one month. But remember, this is from a historically low level. Our current inventory is around 4000 homes we need 12000 to have a healthy and competitive market. The good news is that it seems to be going in the right direction.
Eighty percent of the current sales are traditional sales with 10% short sales and 10% foreclosures. A large number of the traditional (normal) sales are overpriced which doesn’t help the overall inventory problem.
Notice- of- Defaults (NOD”S) are important as it forecasts the number of homes that may be coming on the market at a later date. These defaults are increasing every week but not at a rapid pace. Again, it is at least going in the right direction but not a significant help.
Hedge funds have been responsible for much of the upward push in home prices but they are starting to pull out of the market. One hedge fund is responsible for 10% of the sales priced in the lower part of the market and one buyer was responsible for 10% of total home sales. Now that they have driven up the prices, they will be selling and leaving the valley which should help prices.
The elephant in the room is the large number of unoccupied homes. I have heard numbers in the 50,000 area but don’t know for sure. This data is derived from the number of homes that have the utilities turned off which is not exactly scientific. If and when these homes hit the market it will probably cause a dip in overall prices unless they are released drip by drip.
If you are looking to purchase a home in this market you are walking a tightrope between the possibility of home prices dipping and the inevitable rise of interest rates. Last week Ben Bernanke just mentioned that Quantitative Easing may be scaled back if the economy keeps perking along (it has to end some day) and interest rates took a big spike up. It should be pulling back some after the scare settles down but it shows how jumpy the market is. This little spike added about $200.00 per month to the price of an average mortgage.
My advice is to buy now! Home prices may dip some over the next half as foreclosures and bank owned properties come on the market but compared to the inevitable rise in interest rates it is not worth taking the chance of missing out on a historically low market. The inventory is low right now but improving. Get ahead of the crowd!
Contact me if you have any questions or if you want to get started on the path to owning your new home.