Las Vegas Home Sales Increased 93.4% from August 2007. RJ’s Inventory Numbers Are Still not Right.

September 10, 2008

Every month the RJ publishes an update on Las Vegas home sales and inventory numbers. And every month readers are left scratching their heads.

Let’s start with the headline,

“Streak of home-sales increases stopped.”

This seems like bad news. But the reality is that we had a tiny drop from July to August  (which is one of the slowest months of the year), and sales are still up dramatically over 2007. Predictably, the RJ touts the bad news in the headline, and buries this hugely positive news below:

Sales increased 93.4% from 1,316 in August 2007

In case RJ readers aren’t already confused by the headlines, things get worse. According to the RJ:

The inventory of single-family homes for sale on the Multiple Listing Service declined to 22,710 in August… Another 5,390 condos and townhomes are on the market.

So according to the RJ, if we add SFR to condos and townhomes, there are 28,100 homes on the market available for purchase.

Yet just a few paragraphs later, the RJ says,

Las Vegas-based Applied Analysis showed a reduction in resale inventory to 21,941 as of Sept. 1.

I’m no math major, but even I can tell that something doesn’t add up here.  How can inventory be 28,100 homes in one paragraph but 21,941 in another paragraph?

The answer is that Applied Analysis has it right, and the RJ’s quotes from the MLS have it wrong, because they include pending and contingent sales.

As we’ve said before, pending and contingent sales are NOT inventory.  The difference between 28,100 and 21,941 is huge, and there is simply no excuse for reporting two completely different numbers without so much as an explanation.

Still not confused?  There’s more:

According to the RJ:

Pending sales, or homes under contract to be sold, totaled 7,220 as of Sept. 1, down from 7,339 in the previous week. About 48.8 percent of the contingent units are identified as short sales, suggesting they may still be subject to bank approval.

Here the RJ uses the terms “pending” and “contingent” interchangeably.  But these are two completely different terms in the MLS.  There were actually 2,916 Pending Sales and 4,259 Contingent Sales on the MLS as of September 1.

The difference is important, particularly when looking at the number of short sales.

Let’s use the RJ figure and assume that approximately 50% of the contingent sales are short sales.  That means we currently have around 2,100 short sales.

If the banks reject 50% of those 2,100 short sales currently marked as contingent, that would only put about 1,050 units back on the market, or roughly a 1/3 of a month’s supply.  If you took the article at face value you might assume that more than 3,600 homes could be coming back to the market shortly.

Read the full RJ story here.

-Frothing Mark

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August Las Vegas Housing Sales: Nearly 3000 Units!

September 9, 2008

August was not, as I suspected, able to break the July sales record of 3100+. We did 2949 sales in July. That number handily beats June, May, and every other month back at least a year.


Pow! Amazing Sales Numbers for July

August 6, 2008

I was pleasantly surprised to see the number of closed sales in July:

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Compare that to June’s already strong numbers and you see a nice rate of growth.

Note that none of these are from Trump or Palms Place. This is all resale.

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Yesterday’s Las Vegas Review Journal Story on Home Sale Surge

June 20, 2008

Talked about this yesterday:image


InBusiness LasVegas: Housing Market Numbers Improve

June 18, 2008

It’s becoming increasingly difficult to ignore all of the good news about the Las Vegas housing market. Brian Wargo writes:

May home sales are up 29 percent over May 2007 and prices increase[d] fo the first time since last summer…

He also notes that May sales were 13% higher than April sales, and mentions what almost no one has picked up on: median price of homes in May was higher than in April. I.e. Prices in Las Vegas are going up.

Furthermore:

May marks the fifth straight month sales have been higher than the month before…

The article isn’t 100% accurate though. Wargo republishes the highly misleading GLVAR inventory numbers that include units in contract as “inventory”. We’ve talked at length about how wrong this is.


"Glimmer of Hope"

June 10, 2008

You gotta love the editorial crew at the Las Vegas Review Journal. They are so committed to doom and gloom as a means to sell newspapers that they refer to the huge increase in pending sales published yesterday as a “glimmer”.

Further in the article, which started out as an AP newswire article, a Las Vegas realtor is quoted saying

“She’s working with 11 buyers; six months ago, she had one. “We’re having multiple offers on anything under $250,000. It’s kind of crazy. We’ve seen in excess of 70 offers on a property and it’s commonplace to see 10-plus”

This is a lot more than just a glimmer. I’d call this a beam of hope.

LVRJ hasn’t posted this online, so here’s the version from Sacramento, without the negative headline.


Oops, They Did It Again

June 6, 2008

Another month, another completely misleading chart published by the LVRJ.

In this morning’s paper, the number one most misleading chart in Las Vegas real estate:

image

This is the chart that caused me to start Frothing Developer. This is the “I’m mad as hell and I’m not going to take it anymore chart”.

The only way you can come up with this is if you take the enormous number of units that went into contract in May, along with the enormous number of units that went into contract in April, and March, and count them as available inventory.

I have argued before why this is nonsense. A unit is not “available” if someone else has it under a binding contract.

What REALLY happened in May?

The only ACCURATE metric of available inventory is the count of the homes that you can actually go out and buy. This is represented in the GLVAR database with one of two status codes “EA” and “ER”.

The count for EA and ER on May 1 was 22,719. The count on May 31 was 22,329. 3 days later it had dropped to 21,914.

So inventory in May actually dropped by nearly 400 units.

This is the actual chart of inventory in Las Vegas, when you strip out units in contract.

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