2010 ended up being a stellar year for closings with only 2009 and 2004 being slightly better. Demand remains strong despite the expiration of the first time home buyers tax credit. The following chart can also be downloaded for your use. Click here to download as a pdf.
What this clearly shows is that 2010 was only bested by 2009 and 2004. Of course we acknowledge that market prices of the single family residence are down significantly from 2004, but the fact is that resale closings remain strong – even though tax credits for first time home buyers having been eliminated. So let’s now look closely at an eleven year history of both median and average sale prices for the Greater Las Vegas market. (This chart is included in the Equity Title Market Update Report for January 2011, which can be downloaded below.)
This month’s report is a year end special with extra charts to illustrate how strong and stable the market has been during 2010. Also included are charts depicting the market shifts with respect to both closing type and terms. For example, FHA closings have enjoyed approximately the same amount of market share for the past three years while Conventional loans have given way to Cash transactions due to a mix of circumstances, including more stringent underwriting requirements.
A Year of Stability!
Single family residential (SFR) closings for December are up more than 12% over November 2010 and is the second best December on record for closings. The median sales price of an SFR dropped to $132,000 for an overall drop of 2.9% for 2010. Compare that to the 22.3% and 32.3% market value decline for 2009 and 2008 respectively. That demonstrates stability and healing in this market.
REO listings and closings are on the rise and that has been generally good for buyers. Nearly 30% of those listings are Fannie Mae Homepath qualified properties that offer owner occupied buyers additional leverage when competing with investors for ownership.
So What About 2011?
I’m a firm believer that usually nothing is ever as bad as the naysayers predict nor as good as the blinded optimist believes it will be. Of course 2007 was the exception to that paradigm! Nevertheless let’s look for the Las Vegas market to build upon the present stability while enjoying the current level of demand. Then we need to see what will happen with employment in the Las Vegas Valley. Finally, we will just have to wait to learn how banks will manage the mix of foreclosures with short sales. And if that weren’t enough, the real wild card is that we can look forward to an interesting political year – both on the state and federal level! So fasten you seat belts and enjoy the ride!!