Hello and belated Happy New Year. For Las Vegas real estate market the perfect storm is over and land mass in sight, congratulations to those who have survived it and condolences to those who sank.
Silly real estate pundits have been writing about how bad Las Vegas real estate market is in the first few months of last year. Well a whopping 41,915 single family Las Vegas homes, condos and townhomes have been sold in Las Vegas, North Las Vegas and Henderson through the Las Vegas MLS and another 5,945 properties were sold to a third party in the Las Vegas Trustee Sale Auction with additional properties which have been sold through various bank owned auctions which should put the total number close to 50,000. The supply of distressed properties in Las Vegas area is not endless and we have easily burned though the majority of these.
The total number for foreclosed properties in Las Vegas was 23,920 and 19,180 of these have sold through the Las Vegas MLS in 2010. Some of the rest have sold in bank owned auctions and some are not ready to sell yet. I have shown that home prices have been going up and down in a narrow range (10%) for the type of transaction; see Las Vegas homes market for foreclosures, short sales, auction homes. Condo prices in lower price ranges are up about 10%-15% in many cases.
We are witnessing a serious attempt by the banks to raise prices in all types of residential real estate and all price ranges!!! Time after time we see Las Vegas bank owned listings have been withdrawn from the market and re-listed at 5%-10% higher. We used to have a real estate tradition in Las Vegas pre-2008 and it was; if the property didn’t sell within three months, raise the price by 10%!!! I don’t think bank attempts can succeed in the current market but banks are playing hard ball now.
We have had a couple of complaining e-mails from the listing agents along with rejection letters for offers on $400,000-$500,000 Las Vegas bank owned luxury homes because our offers were 10% below the lowest COMPS. These listing agents were attempting to teach me how to calculate the correct COMPS!!!! Unless these complaint letters are really snobby, I don’t answer them. But while I do not have any problems about paying COMP prices for $150,000 single family homes offers should be made with future direction of the market which is totally different for single family homes that are priced in $150,000 range rather than homes that are priced in $500,000 price range.
As for Las Vegas real estate market for 2011
If things go the same way they have been, we will start a slow recovery in prices which will go on for a year or two, I have explained in Las Vegas economy and its effect on Las Vegas real estate that four levels of trickle downs have to happen and we have started seeing the second level which is a double digit increase in casino and convention business. Now our casinos have to feel good enough to give their workers more hours (I am not talking about new hiring) and employees have to feel good enough and pay down some debt before they start spending money.
I will write about why I expect Las Vegas foreclosures to down drastically in the future.
We are a couple of years away from sharp recovery in Las Vegas real estate and when it arrives it will not be linear. Masoud