Bill McBride of Calculated Risk finds the August Las Vegas housing market trends are offering the best window so far into whether the residential real estate inventory has bottomed.
He sees inventory for sale, especially distressed inventory, as “a major theme for housing in 2013.”
The Greater Las Vegas Association of Realtors reported home prices have been increasing, and for 19 months in a row, along with inventory, but data also show the number of existing local homes, condominiums and townhomes sold in August decreased to 3,539 down from 3,633 in July and 3,688 in August 2012.
These changes matter because Las Vegas “is a key distressed market to follow,” McBride noted in his commentary of the day, since Las Vegas “has seen the largest price decline of any of the Case-Shiller composite 20 cities.”
August data show the number of foreclosures and short sales as a percentage of all existing home sales decreased to 25% from 28% in July, with sales of bank-owned properties unchanged at only 8% of all sales in August and July.
Meanwhile, at 67% of all sales in August, up from 64% in July, sales of nondistressed properties reached their highest level “in several years.”
Curiously both the number of sellers and interested buyers decreased.
The number of single-family homes listed for sale by the end of August was up 2.4% from July, but down 15.1% from last year. The association reported by the end of August the number of single-family homes listed that did not have “any sort of offer” increased 19.9% compared to July and 41.1% annually.
“Key trends,” McBride observes, including an overall decrease in sales combined with the sharp increase in conventional sales from 39.4% of all sales in August 2012 to 67% in August 2013, while “most distressed sales are short sales instead of foreclosures” at an over 3-to-1 ratio, is leading to a fast increase of “that noncontingent inventory” that is now up 41.1% year-over-year.
And since these trends “suggest residential real estate inventory has bottomed in Las Vegas,” he concludes,“price increases will slow.”