Sunday, June 08, 2008

Las Vegas Real Estate - Media Slow to Report Good News

It has long been my contention that the national media created both the real estate boom of 2004 and 2005, and then the real estate bust in 2006 and 2007. But unfortunately, bad news sells better than good news, and so the busts tend to last longer. Buyers are timidly trying to come back into the market, yet every new article about the sad shape of the economy makes them wonder if the time is right. Locally, the big question is: When is the Las Vegas housing market going to turn around? Sales of existing homes have picked up this spring, dropping housing inventory to a thirteen month supply, and in April the market had its first year over year increase in more than two years. The number of single family Las Vegas homes for sale rose for the fifth consecutive month to 2,206 in May, a 29.2 percent increase from a year ago. Applied Analysis, a Las Vegas-based financial consultancy, listed less than 22,000 homes in the resale inventory as of June 2, the lowest total since February 2007.

The number of contingent and pending sales has been escalating since the beginning of the year. About 45 percent of contingent sales have been identified as "short sales," or sales in which the lender will agree to accept less than the mortgage balance owed against the property as well as Las Vegas foreclosures. But local Las Vegas real estate agents are reporting multiple offers on homes under $225,000, reminiscent of 2004 when buyers were lucky to have two or three homes to choose from. Jackie Goodman, an agent on our team with Prudential Americana, started out with 21 homes from the MLS system last week to preview for her client, and 18 already had offers in on them waiting for final seller approval! Jackie had to start all over again to find enough good properties to show her client who was discouraged that her favorites had already sold.

And we are getting this type activity despite the “experts” who declare Las Vegas will see a 30% decline in the next few months. Are prices down? Yes, of course they are. But with the strong job growth and ever increasing population coupled with a steadily diminishing supply, my own personal prediction is that we will start to see actual appreciation in early 2009.

And fortunately the Fed is cooperating by keeping interest rates down near all time lows, even though credit restrictions are limiting the Las Vegas mortgages programs buyers have to choose from. Right now FHA is the most popular choice as purchasers that are buying a primary residence can still do a version of 100% financing through the Nehemiah program where the seller contributes 6% for down payment and closing costs.

So if you are wondering if now is the time to buy Las Vegas homes, well, they don’t ring a bell when the market hits bottom, but all the signs are there. And if you are trying to sell your home, hang in there, baby, better times are ahead as the market comes around to being more balanced!