Traditional Home Sales Return to Dominance in Las Vegas

 

 

Las Vegas real estate professionals have watched and waited for the last year to see how the passage of Nevada Assembly Bill 284 would impact the local real estate market.  The initial effects were obvious.  Virtually overnight, foreclosures halted in the greater Las Vegas area.  Banks went from filing over 4000 new notices of foreclosure each month, to filing less than 100. Although banks have since found ways to resume the foreclosure process, foreclosures rates are still less than half of what they were prior to AB284. Many investment specialists, such as myself, cautioned that this lack of foreclosure inventory could very likely create dramatic and somewhat “artificial” price increases as demand temporarily outpaced supply.  This is, in fact, exactly what has happened.

As the foreclosure process continues to be slowed and stopped by this legislation, median sales prices have skyrocketed, rising over 30% in the last year in Las Vegas, while the number of units sold has dropped by a large margin.  This means that the rise in home prices is not being brought on by soaring demand, but by extremely low supply.  What most buyers and sellers in Las Vegas may be unaware of, is that the Nevada Assembly is considering several modifications to AB284 that may be real game changers for the Las Vegas real estate market.  I recently interviewed Las Vegas attorney and co-author of AB284 Tish Black on my radio show “The Las Vegas Real Estate Reality Hour.”  (If you would like more information on the laws that are being proposed in the Nevada Assembly, you can listen to a rebroadcast of the show on my website at www.teamplantone.com.  The radio player is located on the left hand side of the home page.  Simply click on Playlist and then scroll down to the episode titled Possible Changes to AB284.)

The bottom line is that the real estate market is very unstable in Las Vegas at the moment.  Several possible changes to the law could push inventory up and prices down again.  On the other hand, strong gains in the broader economic picture could facilitate another year or more of double digit gains.  The end of the current Assembly session should provide some indications of what the near future might bring.  I will keep you updated as things progress.