Housing inventory for single-family homes in the Las Vegas area continued to decrease in March, dropping down to below 5000 homes on inventory (not including contingent or sale pending homes). The supply would last about six-weeks if homes keep selling at the current rate. Last March there were a little over 11,000 homes for sale without any offers on them. The total number of homes for sale in Las Vegas last month, including contingent and sale pending, was 18,000, an 18% decrease from March 2011 when the total number of homes on the market was 22,000.
There are numerous reasons why home inventory continues to decrease, but a major factor is the robo-signing law that was recently passed. Before this law was passed in October anywhere from 2500 to 5500 Notices of Default were being filed on a monthly basis. Because of the new law, the number of notices filed has drastically decreased to only 300 a month; bank repossessions have decreased to 800 a month.
Because of the robo-signing law there has also been a large increase in the number of short sales being done. A short sale is when a home is sold for less than what the bank is owed; it’s often a popular alternative to foreclosure, especially when a loan modification won’t work out. Short sales, however, can often take up to six months to close due to needing the banks approval for the sale amount. Some foreclosures can be expected to enter the housing marking again, but not a significant amount. Most lenders are willing to do short sales in lieu of foreclosures to save themselves some money. 40% of homes sold last month were sold via foreclosure and 26% were sold via short sale.
The number of single-family homes sold last month was 3500, a 4.5% increase year-over-year. The average price of these sold homes was $123,000, an increase up almost 2% from February but a decrease of 2% from last March. The average price for a foreclosure was $106,000 and the average price for a short sale for $121,000.
The tightening of inventory is bringing in multiple offers on homes and often times cash buyers are beating out the traditional buyer. More than half of all transactions last month were cash transaction; before the housing supply started to decrease cash buyers only account for 40% of all sales.
Housing inventory can be expected to stay tight for some time due to a few mitigating factors. An increase in cash buyers typically means an increase in rental properties; short sales and loan modifications will also work to keep the inventory low as banks try to avoid having to foreclose on homes.
