Single family residential (SFR) closings for April were down 9%from March but 4.5% better than April 2010. The median sales price of an SFR dipped further to $125,000. Yet, the average closed sales price increased slightly from last month. Homes in the South, Northwest, and Summerlin enjoyed noticeable higher average closing prices than in March. Overall inventory continues to slowly shrink; however, available REO inventory reached the 3000 level. Meanwhile Classic Closings have gained momentum even as REO and Short Sale Closings continue to decline!
Again, keep in mind that based on the 2010 Census—Nevada will gain a fourth Congressional seat. To keep up with Reapportionment & Redistricting or the current Legislative Session, please visit: http://www.leg.state.nv.us/.
The Case for Traditional Listings
This month we want to isolate SFR closings from the Residential Resale market to gain a different perspective on the Greater Las Vegas real estate market. Of course average sales prices are higher, but note that the traditional sale has an average closing price of just under $200,000. Some would have us believe that this market segment is dominated by flipped property and that there really are few traditional sellers benefitting from the current market. Yet the higher average closing prices would suggest otherwise.
First, thirty percent (30%) of all April closings were classic or traditional sales. We are eliminating condos and townhomes from this view because so many of those properties can only be sold with a cash offer. By looking only at SFR closings it can be seen that only 37% of traditional SFR sales were cash deals. Therefore, 63% of all SFR closings were financed with conventional loans leading the way. Notice too that VA loans make up 9% of this market segment compared to 5% when all property types are included.
Are a substantial number of the traditional listings overpriced? Absolutely! But those that are priced properly and generate good activity are selling in about the same amount of time as an REO listing, but at a closing price that is 56% higher! Average Classic closing prices are also 20% higher than Short Sale closings * close in fraction of the time * and do not experience the 60% fallout rate that short sale escrows endure. It’s important to work in all segments of the market, so I am only suggesting that Traditional listings provide a good place for most agents to focus—without giving up any other REO or Short Sale business they may already be conducting.