Temperatures in Las Vegas in June soared above average bench marks, but the hot weather seemed to be one factor contributing to slightly cooling sales trends in the local real estate market. The GLVAR reported declines in both new home sales and resales of existing homes last month. During June of this year, there were 3,642 closings of existing single-family homes compared to 3,884 closings in May (down 6.2%) and 3,945 closings in June of 2012 (down 7.7%.) This mark is also down from the high volume of sales Las Vegas recorded shortly after the market collapse. Vegas properties closed at a rate of 4,702 resales in June of 2009, mostly due to the huge number of cheap foreclosures flooding the market and being snapped up by investors at that time.
New home sales were also down in the Las Vegas valley. Builders unloaded just 637 new properties in June, down 8.5% from May. This number is still significantly higher than the previous June though, when very little new construction was available on the market. Dennis Smith, president and
CEO of Home Builders Research, blames hotter than average weather and the sharp rise in interest rates for the decline.
It is interesting to note, however, that 60% of Las Vegas deals are still being completed as cash transactions, most of these sales to investors. It seems unlikely to think that investors who are paying cash would have much regard for either rising interest rates or rising temperatures. Rather, it seems to me, that the slow down in sales rates has more to do with the decrease in foreclosures on the market and the subsequent difficulties investors are facing in finding properties that cash flow as profitable investments.
I have been pursuing HOA foreclosures over the last year as an excellent way to obtain Las Vegas investment properties for my clients at 2010 and 2011 prices. These properties can not only generate positive cash flow, but they have instant equity and still benefit from the rising home prices we expect to continue to see in Las Vegas as the housing market recovers further from its catastrophic lows. If you are interested in learning more about this unique way to purchase discount Las Vegas real estate, call Glenn directly for more information.
