Las Vegas Real Estate Market is Starting to Warm Up

The Las Vegas Board of Realtors (MLS) reported that, as of April 15, 2008 there were approximately 21,971 home listings throughout the greater Las Vegas valley, which includes the cities of Las Vegas, North Las Vegas and Henderson. This figure, one of the lowest numbers of monthly listings reported in the past year, is the result of the overall increase in pending and contingent transactions, now reported to be approximately 5,301.

Based on the current rate of monthly sales, this translates into about an 8-month supply of inventory, a definite improvement over any period in 2007, during which typical supply averaged about 20 months. This change represents a buyer increase of approximately 140% over similar periods in 2007 and is considered a good market indicator that the bottom has or will arrive soon.

If you take 2007 figures we averaged 1,077 sales per month. In 2008, over the first three and a half months we are averaging 1,393 sales per month which is an increase in sold properties of 29%, which is another indication that the market is improving. Furthermore, multiple offers on foreclosures are being reported, another good sign that buyers believe we are at or close to a market bottom.

The general market softened over the past 1.5 years due to the oversupply of available inventory and diminishing demand. This softening was the direct result of unrealistic sellers, a large portion of which were investors, and the lessening of credit programs formally available. In a typical market, if a property is priced appropriately, it will sell within a reasonable period of time. In a soft market, however, sellers have a tendency to be very unrealistic in pricing in order to minimize losses.

They do not take into consideration the dynamics of supply and demand.

Builders in the city believe that a full market correction will occur sometime in 2009. In adjusting to the downturn, they have lowered prices by 20%-30%, have less standing inventory and are constructing homes on an "as needed" basis. Its hard to imagine our local housing market will not right itself and come into balance, given the over $35 billion dollars worth of construction taking place on the Las Vegas "Strip." To date, approximately 6,000 people continue to move to the Las Vegas valley every month. This can only lead to an ever-increasing demand for housing. In their reluctance to buy, the ongoing major concern of buyers is whether or not we are truly at the end of a declining market.

Thanks to Paula Clark for this information.