A Key Development In Las Vegas Real Estate Suggests House Price Gains Are Probably Going To Slow

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported GLVAR reports 19-month run of rising home prices, increased inventory

GLVAR said the total number of existing local homes, condominiums and townhomes sold in August was 3,539. That’s down from 3,633 in July and down from 3,688 total sales in August 2012. …

GLVAR has also been reporting fewer foreclosures and short sales — which occur when a lender agrees to sell a home for less than what the borrower owes on the mortgage. In August, 25 per cent of all existing home sales were short sales, down from 28 per cent in July. Another 8 per cent of all August sales were bank-owned properties, unchanged from July. The remaining 67 per cent of all sales were the traditional type, up from 64 per cent in July and as high as that percentage has been in several years.

The total number of properties listed for sale on GLVAR’s Multiple Listing Service increased in August, with 14,472 single-family homes listed for sale at the end of the month. That’s up 2.4 per cent from 14,133 single-family homes listed for sale at the end of July, but down 15.1 per cent from last year. …

GLVAR also reported more available homes listed for sale without any sort of pending or contingent offer. By the end of August, GLVAR reported 5,612 single-family homes listed without any sort of offer. That’s up 19.9 per cent from 4,681 such homes listed in July and up 41.1 per cent from one year ago.
emphasis added

There are several key trends that we’ve been following:

1) Overall sales were down slightly from July, and down about 4% year-over-year.

2) Conventional sales are up sharply. In August 2012, only 39.4% of all sales were conventional. This year, in August 2013, 67% were conventional. That is an increase in conventional sales of about 63% (of course there is heavily investor buying, but that is still quite an increase in non-distressed sales).

3) Most distressed sales are short sales instead of foreclosures (over 3 to 1).

4) and most interesting right now is that non-contingent inventory (year-over-year) is now increasing quickly. Non-contingent inventory is up 41.1% year-over-year!

This suggests inventory has bottomed in Las Vegas (A major theme for housing in 2013). And this suggests price increases will slow.

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