Okay, so in trying to keep up with the Las Vegas real estate market you pretty much have to consistently do the following: Being a real estate agent would really help, read any real estate related articles, watch the MLS (multiple listing service that only members of the Las Vegas, Board of Realtors have access to), listen to the news, read Dan DeNuccio's blog, and any other internet real estate related articles. Not to mention, talk to as many active, successful agents that are working at least five days per week showing homes and taking listings on a consistent basis...Whew!
If you are not a real estate agent it would really help to have a really good one if you are planning to buy or sell in the next 6 months. A real estate agent that does all of the efforts in the first paragraph. Because if they don't do all of those things, Vegas is a hard market to track.
Let's start with what I'll label "The Comeback". Around late 2011 to the beginning of 2012, I began noticing the inventory shrinking on a consistent basis. Every listing I took seemed to sell within 30 days or less. EVEN short sales! Up until now, most buyers, except investors, and agents tried to side step or just plain avoid short sales since there was no definite closing date or sales price. But, even the short sales were starting to get competitive bidding and multiple offers by the middle of 2012 as the inventory continued to diminish.
Hedge funds, Wall street investors, by the droves had invaded the housing market, specifically the single family residential market, like never before! Daily, like sharks swimming the Vegas waters, they were looking for every good deal they could swallow up, making offers by the hundreds every month. The return on investment (ROI) was anywhere from 5% to 20% as the prices were still emerging from the depths of the recession and veritable cliff that our market fell off of from 2008-2010.
By the start of 2013 the Vegas real estate market was in full recovery mode! The number of traditional sellers, that's homeowners that actually have equity in their home, were increasing monthly. The water level was dropping by the month as many Vegas homeowners started to convert from being underwater to above water.
One of the main sources of inventory, foreclosures, had also dried up to a fraction of what Vegas was accustomed to. Typically 2500-3500 foreclosures per month from 2008-2011 had dwindled down to less than a hundred per month due to the revised AB-284 law. The revised statute not only changed the penalty for banks foreclosing without all of the proper paperwork, mortgage documents from cradle to grave, but also increased the financial penalty. Civil crime to felony crime, that crippled banks from foreclosing.
Like most frenzies, they don't last long. As the market demand increased by investors, traditional buyers that want to occupy a home, were pushed aside for the cash buyers/investors so the seller wouldn't have to contend with a low appraisal or the buyer not being able to qualify.
And as we move into the last quarter of 2013, we reached the tipping point for the investors. This is the point where the ROI is not attractive enough for the investors due to the peak prices and the investor demand starts to wane, inventory stabilizes or increases and we subside into a normal market..at least that's where we seem to be heading. Which is great for the traditional buyers. Now maybe the competition won't be so daunting and we real estate agents won't have to write 10 offers per buyer to secure one home. And, I'm sure there will still be some short sales and foreclosures that will be appealing to the investors, just not on the grand scale of 1-2 years ago.