Las Vegas Market Update – September 2014

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 The Current Las Vegas Market

Click Here to Download the Current Las Vegas Market Update

Click Here for Additional Las Vegas Market Update Charts

Closed sales for Year-To-Date 2014 remain 13% behind last year as we enter into September. The median sales price of an SFR remains at $200,000 while the average closed sales price increased to $250,313.

SFR-ClosingsByYearAug2014However, the really big news this month is that cash closings did not dominate the market.  For the first time in years Conventional financing enjoyed a slightly larger market share of August closings.

FinancingAug2014This represents a major turn in the Greater Las Vegas market and a trend that we can expect to continue despite the challenges with the Mortgage community’s QM rules and more conservative appraisals.

 

Overpricing Overview – Part 2

It’s again time to address the overpricing issue head on!  The average listing price of an SFR Equity home was nearly $36,000 more than the average closed sales price.  The average listing price of all available equity properties remains at nearly $418,000 compared the the average listing price of approximately $302,000 for new listings.  That means this market is carrying a large number of older, very overpriced listings in inventory that do not have a prayer of selling anytime soon.

OverPricingAug2014Current inventory levels are generally high enough – and growing – so that a seller and listing agent will most likely only get one shot at pricing a new listing correctly.  A year or so ago a seller might be tempted to list their home a few thousand dollars high and then “nibble” the price down over the next few days or weeks.  Do NOT try that today!!  It will most likely result in exposing the home to the correct buyers who will not respond to the over pricing.  Then, once the price drops and corrections have been made – those buyers will probably no longer be available as they will have moved on to competing, but properly priced homes.   Some communities may be better or worse due to supply and demand – which must be taken into consideration.  However, do you really want to play Russian roulette with your listing? Or, is it better to price it to sell from Day One?

Have a very Happy Autumn Moon Festival!

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Categories: Market Stats, MLS, Mortgages, Pricing, Property Management | 3 Comments

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3 thoughts on “Las Vegas Market Update – September 2014

  1. Mark,

    It’s always good to hear from you are to get your insights. Cash closings just hit 25% in the Greater Phoenix/Scottsdale area in August. However, they were are our current cash closing levels in April. Based upon that, I would expect Greater Las Vegas to be at the 25% mark by December or January.

    Politically and legislatively – the largest looming concern and focus is the Margins Tax. While many falsely believe that it won’t impact them because they do not gross $1,000,000 a year in revenues – they could not be more incorrect. For example, medium and large real estate brokerages will easily exceed the $1,000,000 gross revenue trigger. However, a large team may also easily reach the $1,000,000 threshold. Therefore, if I read the ambiguous initiative correctly – everyone on that large team could easily be taxed twice – 2% by the brokerage and another 2% by the team! The same could be true for anyone working on a productive Title/Escrow team or a larger lending team. Worse yet, there is no guarantee that even one dollar of the Margins Tax will reach schools or benefit the educational system.

    You are absolutely correct about the inventory level. A three month inventory level would normally offer sellers some advantage or be balanced at best. However, much of our over pricing now is driven by sellers pricing their homes at a dollar amount that represents an equity sale, whereas the same home listed at market value would undoubtedly be a short sale. Last year’s quick run up in market prices fueled the current wave of over priced listings. So sadly we have perhaps a one month’s supply of “marketable listings” at a time when demand is cooling off.

    I haven’t read the appellate case, but if this one was about the one HOA foreclosure that chose to go judicial – rather than non-judicial – then I would not be surprised. In that case the bank had ample opportunity to respond and apparently did not. It will be extremely interesting when the Nevada Supreme Court hears one of the non-judicial HOA foreclosure cases.

    Kolleen Kelley is usually very good about getting information out, so I suggest contacting her directly. This past week there were lots of distractions – the Tesla plant in Reno being the most exciting and promising for Nevada!

    Forrest

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    • Mark E. Rowley

      Hello Forrest…..

      I think we will be at that level also….Just a lot sooner…..

      The Margins Tax……R & R Advertising was chosen by the largest business groups in the state to lead the opposition…..They Chose Winner and Mandebach out of LA to lead the opposition…..They are a leading firm in the country that does ballot inititives…..The contract with them is $8MM…..NVAR is in for 7% of that amount or $560K…..We are a small player in the group that is against this bill………So as a trade group we are already out of the day to day operations other than to get our organization out to vote against it……You are spot on, even if it were to pass, the monies have no guarantee of reaching its intended target……

      That is a perfect transition into the inventory level…..You could not have laid my point out more sustinctly…..We really have only a months worth of inventory to sell…..So shouldn’t we work on why SB278 in not working and try and loosen up some of the 40K units that are sitting vacant here in Clark….??….So that does lead to the CoreLogic number of 29.4% of our mortgages statewide are still upside down and people were hoping to maybe get out without a tax consequence…..The market is going to pay the piper at some point for not having a true recovery…..We may finally be at this point….

      Ms. Kelley was at the event, but it is the AG’s program that she have several ten million dollar bills lined up to spend……There were less than 300 people calll the program in the first quarter of this year…..I’ll be the second quarter was even less….Hence the delay of the results…..

      Tesla is huge for our state for sure…..It will be interesting to see if the 20 year, 100% tax abatement of Sale / Use tax, the 10 year 100% property tax abatement, the 10 year 100% Modified Business Tax and then the transfer of over a $100MM in other tax abatements will stir a controversy from other big players in our great state…..Personally, I don’t think we have a think to lose and it is a very good bet….

      So what about SB278…..?????

      Best, M.

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  2. Mark E. Rowley

    Hello Forrest….As you know I think it is always great to read your thoughts…..Colony Financial has exited the market as the end of May….Evidenced by its biggest local buyer…..Closed 98 properties in May….In July, this agent closed 6….The agents lowest total in over three years…..Also FREO has exited the market….Also evidenced by its lead buyers agents closing numbers…..By the end of October do you think that the cash buys could be as low as 25%…..?….June 23rd was the day of the Madam Generals relaunch of her signature program “HomeAgain”…..Ms Kolleen Kelley was in attendence representing NVAR…..At the event it was announced that the second quarter results for the program would be available in the next couple of weeks….It has now been over two months and still is not posted as of this morning…..This program has tens of millions of dollars in its coffers….Is it time to have a discussion on how better to spend those funds in another area of the market in helping the 29.4% of the people that are still upside down in their homes….??….In last months discussion we brushed across SB278….You said it was to “Properly Define” an abandoned property, when the bills name is actually “Establishes an expedited process for the foreclosure of abandoned property”…..It is now September and it is evident by the Clark County NOD and NTS monthly counts that the bill is not working…..Is NVAR going to try and re-address this to figure out how we can get something legislated to take the 40K abandoned homes out of our neighborhoods that are “blighting” them….The ten year HELOC resets of 04′ and 05′ are now starting to become the challenge of the moment…..As has been explained to me by a banker here in Clark County, the minimum payments of these personally guaranteed notes will now reset into amortizing payments…..Can the home owners now afford this reset…..?….Am still interested in your comment of AB284 and SB321 bills comment where you said they had “linkage”….Would still love to read about the mitigated numbers of the “Dual Tracking” that SB321 has had a hand in….Have you seen the Appelate court ruling out of the DC court last week on August 28th that upheld the HOA foreclosure does indeed wipe out the first DOT in their jurisdiction….?…..To close and I’m sure you are happy about that…..A normal market inventory is 6 months….We are at 2.8 months according to the most recent GLVAR numbers…..So how is it that we are over priced with a shortage of inventory…..??…..Best, Mark E. Rowley ROG W. Charleston….

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