Single family residential (SFR) closings for February were up 4% from January and up 18% from February 2011. There was yet another dramatic shift from REO closings to short sales as the available REO inventory continues to decline!
What About Available REO Properties?
Many would like for us to believe that all of the precipituous drop in REO inventory is due almost exclusively to Assembly Bill 284 which dealt with the RoboSigning issues in Nevada. It’s certainly true that Notices of Default (NODs) have nearly halted since AB-284 went into effect on October 1, 2011; however the Las Vegas market was already witnessing a severe decline in available REO properties prior to this date. I believe that foreclosures have essentially become politically incorrect – in general in the United States – and that there is a push to either keep inventory off the market or to embrace short sale and deed-in-lieu alternatives.
Why do I believe this? Well, if banks were concerned about AB-284 – why didn’t they speed up the NOD process prior to October 1, 2011? Why do banks pay the county tax bills even though they haven’t received a payment from the Borrower in over two years? Why are we seeing the same trend in decreasing REO inventory in markets such as Phoenix/Scottsdale where there is no AB-284 impact? It’s simple! The banks own very, very few of the loans they service and are obviously benefitting from protracted foreclosure periods. Perhaps we need to modify the NRS Chapter 107 foreclosure laws to protect the interests of both the Borrower and the Noteholder?
Market and Price Changes
Bote the median and average prices increased during February with the median closed price of an SFR increasing by 12.5% to $121,000. However, the median closed sales price of a traditional SFR increased by 3.45% at $150,000. But let’s keep in mind that these price increases were not uniform throughout the Greater Las Vegas Valley. For example, the Northwest enjoyed a 4.1% average closed sales price increase while Summerlin witnessed an 18.4% increase and Henderson a 7.5% increase. It just reminds us that all real estate is local.
New Property Management Permit Course!
Again, I am going to shamelessly plug Americana’s Pre-Licensing Property Management Permit course that was recently approved by the Nevada Real Estate Division. Registration is now open. Just click here to view the course and/or register.