Tuesday, September 11, 2012

Las Vegas August Real Estate: Sales decline, Inventory down sharply year-over-year

by Bill McBride on 9/11/2012 12:34:00 PM

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

From the GLVAR: GLVAR August 2012 Housing Statistics

According to GLVAR, the total number of local homes, condominiums and townhomes sold in August was 3,688. That’s up from 3,572 in July but down from the near-record 4,693 total sales in August 2011.
...
For the second straight month, the total number of homes listed for sale on GLVAR’s Multiple Listing Service bounced back a bit, with a total of 17,047 single-family homes listed for sale at the end of the month. That’s up 0.6 percent from 16,944 single-family homes listed for sale at the end of July, but still down 23.9 percent from one year ago.

[T]he number of available homes listed for sale without any sort of pending or contingent offer fell from the previous month and year. By the end of August, GLVAR reported 3,981 single-family homes listed without any sort of offer. That’s down 7.3 percent from 4,293 such homes listed in July and down 64.4 percent from one year ago.
...
Meanwhile, 43.7 percent of all existing local homes sold during August were short sales. That’s up from 40 percent in July and the highest short sale percentage GLVAR has ever recorded.

Continuing a trend of declining foreclosure sales in recent months, bank-owned homes accounted for 16.9 percent of all existing home sales in August, down from 20.7 percent in July.
A few key points:
• Even with the slight increase in inventory in August, inventory is still down sharply from a year ago (down 64.4 percent year-over-year for single family homes without contingent offers).

• The decline in sales from the record levels in 2011 (even more sales than during the bubble!) is because of the decline in foreclosures. Some of the recent decline in foreclosures is due to new foreclosure rules in Nevada, but there is also a shift to short sales.

• Short sales are more than double foreclosures now. The GLVAR reported 43.7 percent of sales were short sales, and only 16.9% foreclosures. We've seen a shift from foreclosures to short sales in most areas (not just in areas with new foreclosure laws).

• The percent distressed sales was extremely high at 60.6% in August (short sales and foreclosures), down slightly from 60.7% in July.

• There is a push to complete short sales, from the article:
[H]omeowners are pushing to short-sell their homes by the end of the year, when the Mortgage Forgiveness Debt Relief Act is set to expire unless Congress acts to extend it. If Congress does not extend this law by Dec. 31, she said any amount of money a bank writes off in agreeing to sell a home as part of a short sale will become taxable income when sellers pay their income taxes.

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