Inventory is shrinking: a sure sign of better times ahead?

As of last Friday, there were just over 17,000 homes (single family, condos and townhomes) for sale in Las Vegas and Henderson.

Sounds a lot, doesn’t it? Well, not when you take into account that we are currently seeing about 900 homes going into escrow…per week!!! If this sales volume continues, we have an inventory level of about 5 months.

So who’s buying? Last year there was a survey published, showing more or less 67 million US residents were actively searching real estate.

1st. time buyers make up a significant chunk of Vegas home purchases. Not surprising when you consider that prices are low, FHA rates are running around 5%, and 1st time buyers (if you’ve not owned a home in the last 3 years, you’re a 1st time buyer) are eligible for a tax credit of $8,000.

Parents make up another sizeable portion of the home buying public. Rather than waste money on fancy cars or lavish graduation parties, a lot of kids are being “gifted” down payments to buy a home.

And finally, let’s not forget about investors. Donald Trump said recently “be bold and buy real estate now!”. Looks like a lot of folks are taking his advice.

Do multiplex properties make sound investments?

As single family homes become more and more affordable, we are seeing the inevitable rush of investors into that limited segment of the market. As inventory levels shrink, forcing prices to stabilize and then rise,  we’re going to see many more frustrated buyers wasting their time with “multiple offer” bank owned homes.

So where will the smart money go? One answer could be multiplex homes. Some years back, these were seen as great investments, and maybe their time has come again.

Consider this: There are plenty of multiplex listings, with 4 units of 2 bedrooms each, listed in the low $100,000s. Qualified buyers can still get finance with 30% down, and even with some renovation work, in certain circumstances it’s possible to generate $500-$600 per unit in monthly rental income!

With very little competition from other buyers in the market, it’s not unheard of to get offers accepted at 20% below asking price.

Conclusion? Running with the herd is not necessarily the best strategy for savvy investors!

Las Vegas Housing Market Showing Signs of Life.

More good news. It’s refreshing to see the media have got bored of constantly reporting doom and gloom. Here’s what Eyewitness News had to say this week about the local housing market:

There is some light at the end of the tunnel for the Las Vegas housing market. Instead of seeing more homes go up for sale, valley residents are deciding to invest.

As time goes on, for sale signs may be harder to come by because more and more people are realizing it truly is a buyer’s market. They’re pushing their fears aside and are finally ready to take advantage of it.

For months all you saw was house after house with foreclosure signs out front. But now, after months of bad news, empty homes are finding new owners at a fast rate.

Applied Analysis says during the first week of April, there were more than 10,000 Las Vegas homes in contracted status, just waiting to be closed on. That’s double the number from the same time in 2008.

Debbie Vocum-Runyan with Fidelity National Title says they’ve seen an increase in their closings and inventory is also down, which is a good sign of a shift in the housing market. “We are definitely in a buyers market. We are not in a seller’s market yet, by any means, but when your inventory starts to go down, you are getting closer to a seller’s market,” she said.

Homes selling quicker!

I was somewhat surprised today when I did some research on the MLS and discovered how quickly homes are selling.

Ignoring short sales (the ones which take ages to get a response from the bank!), the average time it’s now taking to sell homes under $250,000 in Henderson, is down to just 2 months.

Good news for sellers, but it shows that buyers looking for a great deal can no longer dilly-dally. This “buyer’s market” can’t and won’t last forever. At some time in the future we’ll be at that magic tipping point, and as history has shown, when the Vegas / Henderson housing market turns, it turns fast, so don’t get caught napping!

Homebuilder confidence jumps.

Signs of recovery – and perhaps a bottom – emerge in housing market report; largest monthly increase since 2003.

Judging by the high volume of sales at our office over the last few weeks, I can’t say I was entirely surprised to read this report by Aaron Smith on CNN Money, today:

“In a strong sign that the housing market may be picking up, builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report.

The Housing Market Index, a survey-based measurement of sales, as well as sales expectations, rose by more than 50% in April, according to the National Association of Home Builders, which compiles the index with Wells Fargo.

The index rose to 14 from its prior level of 9, which was the biggest increase since May 2003.”

More good news for buyers and sellers alike, but for those buyers still sitting on the fence, don’t sit too long, for the times they are a-changing!

Are we at the bottom yet?

Who knows where the bottom of the housing market is? Unless you’re a seller, do you really care? The trick is to buy while prices and interest rates are low, and not get too carried away with waiting and waiting for “the bottom”.

Truth is, we’ll only know where bottom is (or more accurately, “was”) when we look back….and for smart buyers, that’s too late!

Need any convincing that now is a GREAT time to buy?  Recently I previewed a brand new 2 story single family home in Las Vegas….for $89,900 !!!!