Less Cash Buyers in Las Vegas Housing Market
According to the Greater Las Vegas Association of Realtors (GLVAR), local Las Vegas home prices continued to climb in June while the percentage of buyers paying cash fell to its lowest point in four years.
GLVAR reported the median price of existing single-family homes sold in Southern Nevada during June was $199,900, up 2.5 percent from $195,000 in May and up 14.2 percent from June of 2013. That's the highest median home price GLVAR has reported since September of 2008. The median price of existing condominiums and townhomes sold in June was $109,000, up 6.9 percent from $102,000 in May and up 26.7 percent from one year ago.
"Our GLVAR median home price is almost back to $200,000, which is encouraging," said GLVAR President Heidi Kasama. "While real estate investors have played a key role in helping our housing market recover in recent years, it's also good to see more traditional buyers entering the market. The percentage of local home buyers paying with cash is now under 35 percent. It hasn't been that low since July of 2009."
Putting these prices into perspective, Kasama said existing local home prices are still well below their June 2006 peak of $315,000. Prices bottomed out at a median of $118,000 in January 2012 before rising for a record 19 straight months until September 2013, then increasing more gradually since then.
Fewer existing homes were sold in June than during May, according to GLVAR. Kasama said local home sales so far in 2014 are running about 13 percent behind last year's sales pace. At the current sales pace, she said Southern Nevada has less than a three-month supply of available homes. But compared to one year ago, she said Southern Nevada has almost twice as many homes available for sale without pending or contingent offers on them.
Since 2013, GLVAR has reported fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. However, in June, GLVAR tracked an uptick in short sales - which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. In June, 10.8 percent of all existing local home sales were short sales. That's up from 7.9 percent in May. Another 10.1 percent of all June sales were bank-owned properties, up from 9.1 percent in May.
Kasama said short sales have slipped this year due in part to uncertainty about whether Congress will vote this year to extend the Mortgage Forgiveness Debt Relief Act of 2007 that expired Dec. 31, 2013. If Congress doesn't extend this law and make it retroactive to Jan. 1, it can create a significant tax hit for anyone who completed a short sale in 2014. She said Realtors are still pushing Congress to extend this act for at least another year. Unless Congress extends this act, as Nevada's congressional delegation has proposed, any amount of money a bank writes off in agreeing to sell a home as part of a short sale starting in 2014 may become taxable when sellers file their income taxes.
The total number of single-family homes listed for sale on GLVAR's Multiple Listing Service in June was 13,838. That's up 1.5 percent from 13,637 in May and up 0.6 percent from one year ago. GLVAR reported a total of 3,715 condos and townhomes listed for sale on its MLS in June, up 1.9 percent from 3,646 listed in May and up 7.7 percent from one year ago.
By the end of June, GLVAR reported 7,126 single-family homes listed without any sort of offer. That's up 7.7 percent from 6,615 such homes listed in May, and an 86.2 percent jump from one year ago. For condos and townhomes, the 2,333 properties listed without offers in June represented a 3.3 percent increase from 2,258 such properties listed in May and a 59.4 percent jump from one year ago.
According to GLVAR, the total number of existing local homes, condominiums and townhomes sold in June was 3,274, down from 3,450 in May and down from 3,642 one year ago
GLVAR said 34.7 percent of all existing local homes sold in June were purchased with cash. That's down from 40.2 percent in May and well short of the February 2013 peak of 59.5 percent, suggesting that investors are accounting for a smaller percentage of local buyers.
The median price of bank-owned homes sold in June was $150,000, down from $165,000 in May. The median price of homes sold as part of a short sale in June was $170,000, up from $160,000 in May.
These GLVAR statistics include activity through the end of June 2014. GLVAR distributes such statistics each month based on data collected through its MLS, which does not necessarily account for newly constructed homes sold by local builders or for sale by owners. Other highlights include:
- The monthly value of local real estate transactions tracked through the MLS during June decreased by 3.1 percent for homes to nearly $643 million. For condos and townhomes, the total value of all June sales was more than $88 million, up 6.8 percent from May. Compared to one year ago, total sales volumes in June were down 1.6 percent for homes and down 2.6 percent for condos and townhomes.
- In June, 69.4 percent of all existing local homes and 67.3 percent of all existing condos and townhomes sold within 60 days. That compares to May, when 69.4 percent of all existing local homes and 62.7 percent of all existing condos and townhomes sold within 60 days.