Like most of us, I have a morning routine. While I can’t get into the full details of this routine (for your benefit), it typically consists of: getting a cup of coffee, reading the latest headlines in the news, going to the gym, walking the dog and most importantly logging into the Las Vegas MLS.
Before the sun comes up and while most are still sleeping, I’m reviewing new listings, seeing what has gone into contract, what is now sold, etc. This exciting step immediately sets the tone for my day! As a REALTOR, it’s my job to do this research for my clients and find out what is happening in the real estate market and their neighborhoods so they/you can benefit.
Take this morning’s search for example. As of right now the inventory in Southern Nevada has reached a high for 2013. We’re sitting at just over 6700 homes currently available at any price range which is more than double from only four-months ago! Let me put it this way; that’s less than two-months of inventory and in a healthy market six-months of inventory is ideal. Clearly we still have a long way to go before we’re “healthy”.
What’s the reason for the sudden increase? Many assume that the banks are finally releasing this “shadow inventory” which is the reason for the inventory….nope. That’s not it. The vacant bank-owned properties that have investors drooling and homeowners hoping that pride-of-ownership is restored in their neighborhoods is but a myth at the moment. Only 369 of those 6764 homes are bank-owned. That’s less than 6%…that’s right 6%.
Truth of the matter is that the banks are still holding onto these properties for now and in my opinion it’s to help the house prices increase enough for existing homeowners to feel confident in their home again and/or to get the loan assistance/refinance options they’ll need to stay in their home and avoid foreclosure. It’s also helping banks on new loans as with values increasing, new homeowners have to borrow more in order to own a house these days….this is a way for banks to temporarily hedge their bets in the housing recovery (even with record low interest rates). Eventually the banks will have to let go of these homes as they’d of course rather “Loan than Own”. I just don’t see that happening any time soon.
The inventory of homes for sale are made up of:
a) homeowners that have seen their prices roller coaster up and down and with values now increasing so they can sell without having to short sell
b) they’re homes owned by investors who are now deciding to cash out on their investments instead of continuing to be landlords
c) investors “flipping” homes for profit.
To find out what is happening on the day-to-day and for expert real estate advice, contact me today.
Mike Rebarchick
Desert mirage photo by Michael Gwyther-Jones