Is Las Vegas Real Estate Really On The Road To Recovery
702-487-0000
For years short sales and foreclosures dominated Las Vegas' distressed real estate market. Underwater home owners simply wanted a way out. Institutional and private investors alike flocked to Las Vegas in droves and were happy to bail them out and pick up as many undervalued properties as possible.What did they know that many didn't?
They understood our market had over corrected and would most likely rebound short term AND they were right. Savvy real estate investors were able to take advantage of low acquisition costs paired with high rents to maximize cash flow while they simply waited for the market to go through the much needed correction. Returns of 20-25% weren't uncommon and you could almost accidentally purchase a property with 10-15% returns. Compare that to what you currently get with stocks, bonds, or money market savings and suddenly you understand why so many people wanted to buy Las Vegas real estate.
Fast forward to today and you may find yourself asking, "where have all the short sales and foreclosures gone?" Read the paper or watch the local news you're likely to hear the media touting that Las Vegas is back to a "normal" real estate market. Looking at Las Vegas market statistics from a 30,000' view it may very well appear that way to an amateur. However stabilized inventory, increasing sales prices, and multiple offers on listings are only part of the equation.
Rising home values have put many Las Vegas home owners in a position where they may be in an equity position where they can liquidate their property without the need to short sale. Bringing the "real" sellers who pay attention to their bottom line back into the market has pretty much put an end to the ravenous investor frenzy. Most of the institutional investors are no longer acquiring properties in Las Vegas and the smart smaller investors are simply sitting on the sidelines waiting for their next opportunity or better yet liquidated their investments and cashed out on the equity they've earned over the last two years. If you own a Las Vegas home and you want to know if you're back in a position where you can sell without paying cash at closing or going through the short sale process check out our short or stay calculator.As home prices begin to level off are we really out of trouble or are we in for another correction?
As of today the MLS shows 6578 active single family homes on the market in Las Vegas, North Las Vegas, and Henderson. Of those 1041 are short sales, 522 are bank owned properties, and 5015 are traditional equity listings. Here's the number that's tells the true story, out of all active homes for sale in the greater Las Vegas Valley 2810 of them have been on the market without an offer for more than 90 days.
Why is this number important if I want to sell my Las Vegas home?
Many of these listings are the real estate version of a hail mary. That's where home owners throw their home in the MLS and simply hope the right buyer comes along and is willing to overpay. As an I agent I believe homes that are priced "out of the market" or simply put the sellers are unrealistic and their homes aren't actually "on the market." Using that logic there are really only 3768 active homes on the market. This means if want your home to sell you have to price it based on market value or your home will simply sit with no activity. Inventory 3000 - 4000 is very similar to where we were 6-8 months ago when every time a listing went active on the market there were multiple cash offers over list price within minutes but we aren't seeing that anymore because the investors have left and the perception is that supply is up when it really isn't. It's just a bunch of unrealistic sellers with an agent that isn't willing to have a tough conversation with them
What does that mean for the Las Vegas market overall?
Over the balance of 2014 we will see inventory stabilize and hover around 10,000 homes including town homes and condos. We will see a rise in buyer activity through the spring and summer as we normally do and eventually see the market soften as we close out 2014. Home values will continue to rise at a more sustainable pace. New construction homes in the valley will be an attractive option for many buyer's because the jump in price from resale prices to new construction has gradually gotten smaller. Local home owners that need to sell will have to pay close attention to their pricing strategy to be successful. The days where they could hire your neighbor's cousin's boyfriend who is also a dealer at TI to sell your home are over. Going forward it's going to take more than simply putting a sign in your yard, putting your property in the MLS, and praying you get an offer. If you're considering selling your Las Vegas or Henderson home give us a call at 702-487-0000.
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