Las Vegas Finance | Las Vegas Now

MarketWatch Reports for January 2011

February 11, 2011

A few things worth noting:

First, REO inventory declined in January to just over 3,000 units after climbing each of the previous 10 months. And, as could be expected, REO pendings also increased by about the same amount as inventory declined. Short sale pendings increased—first time in 9 months. And finally, overall pendings increased—also for the first time in 9 months. Signs that sales activity is not declining, but may be gaining momentum. We shall see.

Second, REOs only makeup 19.79% of the available inventory in Las Vegas. Short sales still dominate the landscape with over 50% market share of the available inventory. As we have been reporting, inventory is very stable—only increased a few units from the previous month.

January Las Vegas real estate stats

Closed units were down from the same time last year, but only by 2%. Another good sign. We will truly begin to see the impact that the tax credit had on sales during the first half of last year as we compare it to these next few months of 2011.

January Las Vegas real estate Pie

January Las Vegas real estate graph

Finally, and as you may have seen in Hubble’s excellent article from earlier this week, cash transactions finally crossed the 50% of total sales mark. Cash sales make up more than all other types combined. Wow. What will these investors’ exit strategies do to the future recovery? Not much being said about that to this point. But, it will certainly have an impact on the timing of the turnaround and at what pace prices will climb once they begin doing so.

Have a great month!

David Brownell

Broker-Salesperson

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MarketWatch Reports and End of Year Analysis

January 19, 2011

Market Watch Report
End of Year 2010

Las Vegas, Nevada

Happy New Year! Well…..another year of living the Las Vegas real estate dream has come to a close. And, we’re all still here. At a minimum, let’s raise our glasses to that fact. That alone speaks volumes. So………..Cheers!

2010 was a year without a lot of surprises. Things stayed pretty constant throughout. Those who projected the beginning of a turnaround (was there anyone who took that side?) were left to grasp a few glimmers of hope that came to pass and those who warned of another year of further crashes throughout the market – the Gloom and Doomers – were also off the mark.

The home buyer tax credit, which many worried was artificially propping up an otherwise much worse market, came to an end. And while we agree that we did see a slowdown in closed units in the months that followed, certainly, those numbers did not dip to the lows that were being presented at that time.

Hopefully, the 2011 Las Vegas real estate market will begin to show signs of a turnaround. However, I believe that we will probably see another year very similar to 2010. Of course, massive job creation or a spike in interest rates could move the pendulum in either direction, and quickly.

Here’s what I noticed as I reviewed the end of year statistics as well as each month’s numbers throughout the year:

1. Inventory is climbing. December was the first time that available inventory had declined since April, but it is up 50% from the same time in 2009. REO and Short Sale inventory climbed 58% and 68% respectively over that same period. The available inventory is showing signs of stabilization. From August through December, the available inventory has remained between 14,119 on the low end to 15,353 at the upper end.

2. Contingent and Pending properties are down. Since April, this number has been trending downward, from 16,193 in April to 10,849 in December—a 33% decrease. For the year, the number of contingent and pending properties is down 17%.

3. They’re baaaaacck. The next wave of REOs may be upon us. In December, there were 1,880 REO closings—the highest number since March 2010. We shall see.

4. Final Short Sale numbers proved us wrong. Earlier in the year, I predicted that Short Sales would pass REOs as the largest portion of closed units in a given month. They got close, but did not quite make it. In June, REO closings were 38% of the closed units for the month and Short Sales were over 34%. However, the spread started moving back the other way in July, and at the end of the year, REOs were back to 50% of the closed units and Short Sales had declined to 26%.

5. There is one other thing to note about Short Sales in 2010. While the general perception is that Short Sale successes are on the rise, a closer look at the numbers shows this is just not the case. Overall, Short Sales are successful between 8 – 12 % of the time, or 1 out of every 8 – 12 Short Sales actually closes. This statistic has remained pretty consistent over more than just these past 12 months. Many theories abound. I will save that for another discussion.

6. Finally, distressed sales (REO and Short Sale) continue to dominate the market. They comprised 77% of the closed units in December 2010. This number has been as high or higher for some time. With the number of homeowners underwater at around 80% and Las Vegas having the highest percentage of distressed assets in the United States, look for things to remain the same for awhile. The turnaround everyone is looking for may still be a few years away.

Thanks for your continued support and readership. I really enjoy sharing every month. And again, Happy New Year!

David

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Once Again I Present Larry Murphy and Steve Bottfeld

August 18, 2010

SalesTraq
Copyright© 2010
(used with permission)

It is summertime in Las Vegas and everything is hot except the real estate market. July is traditionally a slow month for Las Vegas residential product and this year more than honored that tradition.

Sales slowed. Prices remained static. Inventory enjoyed a very uneven performance.

Here are the details:

SALES: New home sales which had surged in June to beat the Federal tax credit closing deadline slid back to May levels. Still, the total of 408 units sold exceeded last year’s level by 1.5%. In fact, in six out of the seven months of this year, new home sales have topped last year’s numbers. The positive: 2010 should be a slightly better sales year for new homes than last year. The negative: It is still a weak new home market.

Existing home sales — while maintaining a reasonable level — slid 16.9% from last month to 4,128. That’s also 19% below last year’s level. It still appears that existing home sales are poised to beat 2009 levels. However, it is worrisome to note that the last three months’ existing home sale totals have all failed to exceed corresponding months in 2009.

PRICES: While we cannot call residential prices stable, there has been some consistency.

The median price for an existing home sold in July was $120,000. That price is below both June (-2.4%) and the previous July (-1.6%). But, it is consistent with data over the last 16 months. In that period, the median price of an existing home has been bouncing between $115,000 and $126,000.

It is interesting to note that for the first time in four months, the median price of a short sale exceeded the median price of an REO sold. Monitoring the relationship between those two numbers can give us some indication of where we really are in the recovery process.

But, more importantly, the median price per square foot of an existing home sold in this market has been above 2009 levels for the last four months. The current median price per square foot of an existing home sold in July was $79.78.

The new home sector is somewhat more difficult to analyze because of the inclusion of 90 Hi-Rise closings at CityCenter. The median price of a new home jumped from a century low $182,440 in June to $210,000 in July. Obviously, that number and that change were influenced by the CityCenter closings.

The new home average price per square foot barely changed from June’s $101.51 to July’s $101.57. (Hi Rise closings are not included when calculating median price per square foot.)

Whole dollar pricing may not be giving us a true picture of the market. We may need to concentrate on price per square foot as a truer measure of pricing in the new home market.

INVENTORY: We called inventory uneven because three out of four major measures fell and one increased.

1. The number of new home subdivisions in the Las Vegas Valley fell to 219 – the lowest total in this century.

2. The number of new home permits in July slid to 364, a 14% drop from last month and a 19% drop from last year.

3. The 1,907 foreclosures in July were somewhat higher than June figures (+28%). Yet, that number was 19% below last July. In fact, five of the seven months in this year have seen lower foreclosure levels than corresponding months in 2009. Nonetheless, we believe that 2010 will very nearly mirror 2009 foreclosure totals.

4. The 13% rise of available listings in July to 12,772 is the first time this year that any month has been higher than its corresponding month in 2009. Yet, even at this figure, this inventory represents just 3.1 months of supply at current sales rates.

Unlike the bright sunny weather Las Vegas enjoys in the summer, July’s data was hazy and perhaps a little cloudy.

We’ll be looking more closely at these and other figures on October 21 at the next Crystal Ball. Mark the date. We’ll be sending you more information in the near future.

Respectfully submitted,

Larry Murphy and Steve Bottfeld
SalesTraq Marketing Solutions

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