December 2009 Las Vegas Market & Short Sale Report
ByThis Market Condition Report is courtesy of Nevada Title Company:
Overall Months Supply is 2.8 and rising at a very slow rate. The market continues “tight” overall with most of the supply/demand constriction centered in REO with 59% of demand and only 20% of supply. The percentage of the market taken by REO is declining at an average rate of about 1.8% per month. Overall, supply remains unchanged while demand declined slightly.
Prices, which were holding steady, have resumed their decline. Expect closings to remain rather steady in the current range. As far as overall prices are concerned, continued weakness is the most likely outcome. In all categories (REO, Short and Standard), current pending price is less than current closing price signaling impending price declines in the near term. The reader should take note that current Months Supply is tight, thus it is reasonable to expect rising prices. The current negative trend in price, which is running counter to supply/demand, is likely due to conservative standards applied by appraisers versus current market realities.
As a note, 34% of all closings are cash, suggesting a high level of investor participation in the current market.
Short Sale supply exceeds Short Sale demand by a factor of 6.8 (see Months Supply). Months Supply is declining in very small stepson a monthly basis. Market Speed is slow and Percent Selling depressed, while escrow inventory remains at high levels. Observe that CDOM is elevated when compared to REO/Standard. These factors continue to support anecdotal reports of an inefficient closing process. Short Sale prices are currently steady, however, future price declines are expected (see Median In Escrow Price).
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