Tuesday, January 26, 2010

Las Vegas Home Sales Indicate Cash is King

Yes, Las Vegas is definitely having a half price sale! Prices have dropped on average of 59.2% from their all time highs in early 2006. But despite reports of doom and gloom in the local and national press about the Las Vegas real estate market, the actual sales volume stats for the year 2009 say something different. The total number of closings for single family homes in 2009 finished at 38,127, a 53% increase over closings in 2008. Condos and town home sales volume finished the year at 8752 closings, a 137% increase over 2008.

In fact, total closings in 2009 actually EXCEEDED the number of closings in 2005, the former sales volume annual record holder. Inventory for single family homes is down to 9,119 as of today’s date compared to a peak inventory of 26,000. Of the available homes currently on the market, almost half are short sales and the rest are divided pretty evenly between Las Vegas bank foreclosures and “real” sellers.

And why is the inventory of Las Vegas homes for sale so far down and why was the 2009 sales volume so high? Investors, attracted by the low sales prices which yield a good rate of return for rental income, are flocking back to the city. They are coming with cash and competing with first time homebuyers and move up buyers for the limited number of available listings.

December closings sold according to the following terms:

Cash 41% with an average sales price of $117,522
Conv 23% with an average sales price of $192,915
FHA 30% with an average sales price of $143,515
VA 5% with an average sales price of $188,113

Prices in some of the most popular areas of the Las Vegas Valley actually appreciated a small percentage in December, most notably in Summerlin, Anthem and the Southwest. The big banks are still sitting on a large number of foreclosures that have never been put on the market, but sources indicate that they will only be releasing these in controlled numbers over the next year or two so that prices remain stabilized.

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