Yes it’s finally over! As Mark Twain said:
“No man’s life, liberty, or property are safe while the legislature is in session.”
However, progress was made in the areas of construction defect litigation, squatters, HOA foreclosures, miniature horses in the workplace, and more new license plate choices. I’m not sure about the ethics in government bill after watching some of the heated sessions featuring varying degrees of what could be considered mud slinging. Will the local paparazzi get their own drones and test the new privacy laws? Then there’s the historic tax hike. Yikes! Yet, I’m excited that the Assembly Joint Resolution (AJR-4) was passed to pave the way for Nevada to remain on Daylight Time year round beginning 2017 should the U. S. Congress approve it. Why am I excited? Because that is “best for business” as it allows more hours of Open House time during the winter months! Yes! Yes! Yes!
Las Vegas REO Market Update
First, let’s address the current myth that we are about to be flooded with more REO foreclosures. The chart below challenges that rhetoric that is running rampant out there. The Las Vegas market is still seeing about 8 percent of all closings being REO, but I don’t see the banks dumping foreclosure inventory into the Las Vegas market. It would make more sense for them to continue selling bulk or renting until they are ready to flush that inventory.
Market values dipped despite demand remaining constant in May. Some areas were sluggish, but check out the activity in the Northwest where closed units of SFRs was up even though the average price of an SFR dipped approximately $10,000. There’s only 2.7 months of inventory, but only about 30% of that is priced right – so there’s only about 2-3 weeks of marketable inventory. Basically a home comes on the market properly priced and is in escrow within 30 days – or it comes on well overpriced and takes 300 days to get into escrow. Financing remains strong and cash sales are beginning to dwindle.
May posted solid market performance despite not ending up at last year’s level. The median sales price of an SFR slipped 0.7% to $211,000, while the average price dropped to $245,758.
Review the charts below and look at the strength in the following market areas:
- Luxury Sales (Closed sales over $1,000,000)
- High Rise Sales – which are gaining momentum
Finally, review the over pricing chart below. Why? One can see all the potential tell tale signs of a potential bubble. But there is no bubble and ignore reports of bubbles! Why? Because we can thank conservative appraisals and conservative loan underwriting standards for providing a check and balance against such a bubble! There are no more NINJA loans! In fact, are we ready for even more changes to loan underwriting and reporting that will launch on August 1, 2015 by CFPB? Well, stay tuned . . .