In my last post I talked about the 78.3% increase in Las Vegas Home Sales for April 2009. It was the 13th straight month of year over increases, and Las Vegas Home Buyers and Investors have been grabbing up the bargains. For first time buyers that qualify, they have the added incentive of the $8,000 tax credit if they close on their home before Dec. 1, 2009.
I also mentioned in that post that real estate is local, even on the local level. This is where you need to have a knowledgeable agent working for you, as unfortunately there are so many generalizations in the media and elsewhere. Median price and price declines for an entire metropolitan area can be misleading.
There are homes available at median price in Las Vegas, and above and below that figure. A home buyer can be misled if they think that home prices are 'median' valley wide. While home prices have dropped valley wide and homes are offering tremendous values, much will depend on the area. While still a generalization, an article in The Las Vegas Sun about Median Home Prices in Las Vegas Zip Codes can give you an idea of what I mean.
In the article it states that 13 of 56 Las Vegas zip codes had median home prices under $100,000, well under the data source's median of $150,000 for the metropolitan area. The lowest median prices they found were $45,500 in 89101 around downtown Las Vegas and $39,000 in 89030 around downtown North Las Vegas.
On the other end of the scale you have their 1st quarter median listed for Henderson's 89052 that includes communities like Anthem and Seven Hills where they place the median at $260,000. Summerlin's 89135 and 89138 medians were at $270,083 and $285,000 respectively. You'll also notice that percentage of price declines goes across the board, and those will also vary even within a zip code, even down to various subdivisions within a particular community. Remember median is also only the middle number of all homes sold, so there will be an equal number of homes sold above and below the amount.
You easily see that price variation in the article's mention that the highest price per square foot of $320 was along the Strip. That's the highest for the entire valley during that quarter, yet the median price for the zip code area only came in at $247,500, which isn't the highest median valley wide for a given zip code.
So yes, location, location, location still plays a huge role in real estate values. Median and overall price drops only give you a wide ranging ball park figure. For you to determine pricing for your specific needs, you really need to look at comparable sales and their reported appraisal condition. Was a property sold that was appraised as a Excellent like new condition, or was it Poor and in need of rehab and additional investment? That is where having a good agent can be a tremendous asset for you to determine a home's real value.
In another article in the Las Vegas Review Journal, they say what I said in my last post, Home Buyers and Investors are gobbling up foreclosure inventory. The article states that first quarter sales are up 77%, even larger that last month's gains alone, and that inventory is being purchased at a faster pace than in other parts of the country, again why real estate is local.
Local SalesTraq tells of what most agents are experiencing locally. Banks are listing homes low to attract attention and competition and then waiting a while for highest and best offer, often at or above list. This isn't necessarily the case in other home markets, so using what may be happening elsewhere could be a mistake in home buying.
The article mentions another quote that homes under $200,000 that are very popular, are in shorter supply. This is also increasing competition for both home buyers and investors. Here you don't want to overbid and why you need to determine value, but you also need to know the reality of the market if your bid is to be successful.
Assuming you can underbid on a foreclosure because the banks are 'loaded' with them, might just have someone else getting the home. The media in general produces statistics that claim Las Vegas has one of the highest foreclosure rates in the nation. That's not the amount of homes going into foreclosure, but the rate based on population. It doesn't tell you that these homes are selling and keeping inventory down, or where the competition is found.
The article also mentions 'Phantom Listings', or homes that have been foreclosed by the banks that have yet to be listed on the MLS. They claim that only 30% have been listed nationwide. Unfortunately national foreclosure statistics aren't maintained by any government agency, and the private companies that the media often list as 'leading sources', have had their figures come into question.
I think any agent who has experienced Short-Sales can explain why some homes don't make it to market quickly. The RJ article states SalesTraq figures that the number of completed Short-Sales is around 10%, which is an improvement since when the housing crisis first began. Lender have been understaffed and slow to respond in many cases.
Another issue is that it's often difficult to figure out who exactly owns the loan, as many lenders are only loan servicers. Loans can be bundled among countless others and placed into traded securities which can make it difficult to sort through. Following homes through a foreclosure process, it's not unusual to see a property reconveyed, even multiple times, before one lender has clear title. Using raw data as the statistical site often do, it's possible that these changes in title may be inflating numbers of bank-owned properties.
There can also be further complications with property condition and even keeping up with prepping a home for sale. Demand for restoration services is often high and in severe cases of damage a determination has to be made if it would be better to invest more into the property for repairs or simply sell in it's condition. One property may be pristine with new carpets, paint and appliances, the next requiring repair. Some listings can be found as cash-only as by underwriting standards the home's condition won't permit it to be financed.
So my question is...does this statement of a 30% national figure of 'Phantom Listings' that have yet to reach the MLS apply to Las Vegas? It appears the inventory on the MLS has been moving quickly, so there has been demand. Local SalesTraq also states that while one month may only be a 'fluke', bank-owned home dispositions, or sales, have outpaced bank acquisitions through new foreclosures in March. So I'll let you decide if this nationwide overview figure necessarily applies to Las Vegas.
While foreclosures appear to still be with us and for some time into the future, don't let broad media statistics influence your buying decisions. You need to examine and understand the local market very closely, and determine what applies to your specific situation.
It's also unknown what condition or pricing may be if this demand continues, so at least shopping now will keep you in touch with what is happening. Median price or general reduction of values doesn't give you guidance, if it's not the specific area, community, access, or lifestyle where you want to be. Again, that's where the personal services of a knowledgeable REALTOR® can help you along the way.
If you are interested in relocating to the Las Vegas area or would like more information or have questions about Las Vegas real estate, please email me, Roberta LaRocca, at firstname.lastname@example.org,
or call 702-354-8988. I look forward to hearing from
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