The big news article in this morning’s Review Journal is entitled “Experts See Soft Summer For Resales”. What do you find, though, when you really read the article? Check it out:
“The tide has certainly changed,” McGarry said. “The prices that the banks are offering their homes at are competitive, but they are slowly creeping up in price.”
Six months ago, McGarry was sending buyers out to look at $250,000 homes and encouraging them to offer $230,000 and ask the bank to pay 3 percent of the down payment and all closing costs.
“At that time, they were the only offer and nine times out of 10, the offer was accepted,” he said.
Three months ago, competition heated up with banks getting two to five offers on the same bank-owned property, so McGarry suggested offering list price with some assistance on closing costs.
Banks are now getting up to 15 offers on homes in the $250,000 price range.
“We now tell our buyers to offer above list price or even an escalating offer where they will pay $1,000 more than the highest offer,” McGarry said.
In other words, the market is seeing significant price escalation from 1st quarter lows. The house that went for $230k is now going for $260k.
Here’s another buried positive report:
If [the rate of new home permits] continues, Las Vegas will end up with less than half of last year’s 12,836 total permits, SalesTraq President Larry Murphy said. He estimates that new-home inventory is at a two-month supply at current absorption rates.
That’s an important item. A two-month supply basically means there isn’t any excess new-home inventory left. What new homes are getting ordered are getting purchased and closed within 60 days of completion. This is an important differentiator for Las Vegas compared to, say, Miami, which has tremendous new home inventory.