Home prices in Las Vegas weren’t so good at the start of the year, much like the year before, by falling 5.6% in January according to the Greater Las Vegas Association of Realtors. In addition to that, Realtors also showed a median single-family home price of $118,000, based on 2,931 units sold during the entire month. The median price drop is also a little bit lower than the 7.4% drop seen in January 2010.
In addition to that, the inventory of homes on the Multiple Listing Service also continued to experience a steady decline to 19,160 in January, a decrease of 12.9% from the same time last year. The number of available units without contingent or pending contracts also fell 35.8% to a total of 8,001. Kolleen Kelley, Association President, stated that the downward turn may change due to a new state law that has slowed notice of default findings. “We’ll see the full effect of AB 284 in April or May and we’ll see prices go back up.”
First Server Realty’s Bryan Kyle says that there will be enough inventory to come as banks work through the legalities of foreclosures and also stated, “I wouldn’t be surprised to discover that the banks will continue to artificially control the amount of homes coming on and off the market.”
Nearly 50% of all the homes sold in Las Vegas are cash transactions with absolutely no mortgage, which suggests heavy activity from investors who will turn them into rental properties. According to Kelley, that isn’t necessarily a bad thing either. “I kind of have an optimistic view. I look out into the future when these people will eventually sell the homes and they’ll be owner-financed,” she says. “If interest rates go up, that could be a real possibility because investors can’t get the return on investment like that on a monthly basis. And if lending criteria stay as high (they are), it’s possibly something that we could see sooner rather than later.”
Bank-owned homes accounted for nearly 45.5% of all the existing home sales in January with 28.1% being short sales. Short sales occur when a home sells for less than is owed on the mortgage. Las Vegas is currently going through a process where former homeowners are now becoming renters with almost half of the bank-owned sales going back on the market as rentals, according to CEO of Coldwell Banker Premier Realty Bob Hamrick.
Source: Las Vegas Review-Journal – Home prices keep falling in January