Some homeowners in the Las Vegas area are worried that home prices could increase as much as 10% in the next few months as the number of homes on inventory decreases. According to a report showcasing numbers from February, the number of homes for sale in the Las Vegas area was down to 7800, which is 1700 fewer homes than January and a little more than 14,000 fewer homes than the previous year. Last month there were a little over 3500 homes that closed escrow. This number is the lowest it’s been in the last five years and is barely more than two months’ worth of inventory. Some real estate agents are worried that the housing inventory may dip to below 5000 homes by the summer of 2012, which would be lower than anytime in 2004-2006.

The number of homes on inventory for bank-owned and real estate-owned homes has also shrunk to a little over 1300. This amount of homes isn’t even enough of an inventory to encompass one months’ worth of supply because of current sale levels. Distressed property sales are making up most of the housing market in Las Vegas as well. Foreclosures comprise about 50% of all home sales while short sales are about 25%. This number could soon change however due to the $25 billion settlement between the government and the banks.

One real estate agent believes that real estate-owned properties are going to significantly decrease in the next couple of months; in fact, he believes that the number on inventory could be less than 1000. Back in the early months of 2011 there were approximately 200 trustee sales every day. That number has been steadily decreasing, down 90%, to as few as 10 a day.

To understand where the housing market is going, take a look at these numbers: there were over 4600 total homes put on the market in February and 6200 new escrows. 1800 of these homes were short sales and 1300 were real estate-owned. For the homes in escrow, almost 3000 were short sales and 1800 were real estate-owned.