A common perception is that Las Vegas has a “ton” of inventory. For those that have been actively looking to purchase a property in Las Vegas, especially entry-level houses, have experienced the opposite. Lets examine the market to find out the reality:
Take a look a the Foreclosure Filings graph below from ForeclosureRadar.com. This graph is for the state of Nevada. The green line, “Notice of Default,” is the bank filing telling the homeowner you have not paid your mortgage and the next step is a foreclosure filing, Notice of Sale. As you can see, the defaults went to near-zero in October due to some complicated state regulations. So there are very few homes being foreclosed on. Even been the new regulations went into place there was a downward trend. Keep in mind that typically 47% of all sales in Las Vegas were REOs.
So, 47% of our sales has historically come from a product type that is about to come near-extinct! Let me be clear: There is very little REO inventory and huge demand; 2011 saw the most homes sold in Las Vegas ever. Let me repeat, the most sales ever and the media forget to tell you: http://www.lasvegasrealtor.com/Newsroom/article/GLVAR-December-2011-and-Year-End-Housing-Statistics-799
Okay, so REO inventory is now low and falling. But John what about short sales and “traditional” sales? Well, yes, there are a lot of short sale inventory although very little traditional (homes with equity) properties. But taking into account demand, there is almost no inventory of any kind. Think I’m crazy? Take a look at the Days of Supply graph below from NARREIA.
For Single Family Residences we have ONLY 25 DAYS OF INVENTORY. Does that look like too much inventory to you? Yes, less than one month’s worth of inventory.
What this means on a practical level is that if you want to buy a home (especially under $160,000) there will be a ton of buyers you will be competing with and very little to choose from. I also expect the average home price to go up just slightly in February. Let’s see, shall we?
A follow-up story is here: http://www.houseofvegas.com/?p=955