Las Vegas was one of the hardest hit real estate markets in the country during the housing crash of 2007-2008. It had one of the highest foreclosure rates and many developments were left with unfinished homes as property values plummeted and mortgages dried up. That may finally be turning around in 2013, if recent sales trends are to be believed.
Seven Year High
Figures on May home sales were higher than they had been in seven years. May saw the sale of 5005 homes and condos in the Vegas metropolitan area. That is the highest for the month since May 2006 when 7615 homes were sold. The current total is 3.6% higher than May 2012 and .3% higher than the 20 year average for the month. Sales were up 2.8% compared to April 2012.
Median home prices were also up — for the 14th consecutive month. The new median price of $162,000 rose 1.3% from April and a staggering 32.8% compared to May of last year. In fact, over the last 11 months the median home price has recorded double digit gains, establishing a solid trend. Median prices went from a high of $312,000 (November 2006) to a low of $110,00 in January of last year, so the gains are significant.
Note of Caution
Experts are leery of proclaiming a full recovery for the market. They point to the fact that 59.6% of May sales were all cash and that higher priced homes may be skewing the data. In fact, sales of homes of less than $100,000 were down 44.8% and those less than $200,000 fell 17.8% compared to May 2012. Meanwhile, $200-$500,000 homes sold were up 76.9% year-over-year.
Another reason for caution is that new home sales are running 52.1% below average. This fact is overlooked by those who focus on the 28.1% rise in sales of existing homes and condos. Lack of new construction could mean that the growth in the market will stall out sooner rather than later.
According to the Las Vegas Association of Realtors, the average listing currently gets a minimum of 15 offers as institutional investors, hedge funds and Wall Street brokers, are paying cash and overbidding on existing properties, buying up homes in bulk. This makes it difficult for the regular borrower to purchase a home.
It has also led to a drop in available properties. Vegas usually has a six-month supply of available homes, but realtors estimate the current supply at only five weeks. They report having to cold call homeowners trying to convince them to put their house on the market.