Thursday, January 08, 2015

Las Vegas Real Estate in December: Lowest Sales in Years, Non-contingent Inventory up 18% YoY

by Bill McBride on 1/08/2015 11:38:00 AM

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.

The Greater Las Vegas Association of Realtors reported GLVAR reports local home prices stay up through holidays

According to GLVAR, the total number of existing local homes, condominiums and townhomes sold in December was 2,734, up from 2,483 in November, but down from 2,915 one year ago. At the current sales pace, [GLVAR President Keith] Lynam said Southern Nevada continues to have less than a four-month supply of available homes. REALTORS® consider a six-month supply to be a balanced market.

For all of 2014, GLVAR reported that 36,550 total properties were sold through its MLS. Lynam noted that was the lowest number of sales in at least six years, down from 47,685 sales in 2009; 44,045 in 2010; 48,798 in 2011; 45,698 in 2012; and 41,477 in 2013.
...
GLVAR said 34.1 percent of all local properties sold in December were purchased with cash. That’s up from 31.9 percent in November, but well short of the February 2013 peak of 59.5 percent, suggesting that fewer investors have been buying homes in Southern Nevada.
...
GLVAR has been tracking a two-year trend toward fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. That continued in December, when 10 percent of all local sales were short sales – which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s up slightly from 9.6 percent in November. Another 8 percent of all December sales were bank-owned properties, down from 8.7 percent in November.
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The total number of single-family homes listed for sale on GLVAR’s Multiple Listing Service in December was 12,377, down 7.8 percent from 13,421 in November and down 7.0 percent from one year ago. GLVAR tracked a total of 3,282 condos and townhomes listed for sale on its MLS in December, down 7.0 percent from 3,529 in November, but up 13.1 percent from December 2013.

By the end of December, GLVAR reported 7,774 single-family homes listed without any sort of offer. That’s down 5.1 percent from 8,195 such homes listed in November, but up 18.0 percent from one year ago. For condos and townhomes, the 2,309 properties listed without offers in December represented a 6.1 percent decrease from 2,458 such properties listed in November, but a 38.8 percent increase from one year ago.
emphasis added
There are several key trends that we've been following:

1) Overall sales were down 6,2% year-over-year.

2) However conventional (equity, not distressed) sales were up about 9% year-over-year.  In December 2013, only 70.8% of all sales were conventional equity.  In December 2014, 82.0% were standard equity sales.   Note: In December 2012, only 44.7% were equity!  A significant change.

3) The percent of cash sales has declined year-over-year from 44.4% in December 2013 to 34.1% in December 2014. (investor buying appears to be declining).

4) Non-contingent inventory is up 18.0% year-over-year. The table below shows the year-over-year change for non-contingent inventory in Las Vegas. Inventory declined sharply through early 2013, and then inventory started increasing sharply year-over-year. It appears the inventory build is slowing (an important change in many areas).


Las Vegas: Year-over-year
Change in Non-contingent
Inventory
MonthYoY
Jan-13-58.3%
Feb-13-53.4%
Mar-13-42.1%
Apr-13-24.1%
May-13-13.2%
Jun-133.7%
Jul-139.0%
Aug-1341.1%
Sep-1360.5%
Oct-1373.4%
Nov-1377.4%
Dec-1378.6%
Jan-1496.2%
Feb-14107.3%
Mar-14127.9%
Apr-14103.1%
May-14100.6%
Jun-1486.2%
Jul-1455.2%
Aug-1438.8%
Sep-1429.5%
Oct-1425.6%
Nov-1420.0%
Dec-1418.0%