Hello again from Las Vegas!
Foreclosures
It is hard to anticipate how foreclosures will impact this marketplace in the future. The Las Vegas Review Journal had an article today with the headline ” Local foreclosure start surge. There has been a significant increase since June. Having said that as I review the foreclosure filings for Clark County for the last several months I see that from October 1012 until May 2013 the foreclosure filings averaged over 2,000 a month. There was a very significant drop in June and July but the figures for August, even though higher than for June and July, were still well below the previous months. Looks to me like the refrain ” the log jam is breaking on foreclosures” is premature.
Given the number of homes where the homeowner owes more for the their home than the home is worth, I do expect considerable activity in distressed sales into the indefinite future. How much that will impact prices given the still fairly strong demand is hard to say.
Investors
According to the Las Vegas Sun, investors are leaving this marketplace. A year ago there were at least 50 investment firms buying homes in this area. Now there are just 3 and even these 3 are much more selective. Home prices have surged over 35 percent over the last 12 months making it more difficult for investors to turn a profit. Rental prices are slipping also.
Some of this investor activity has been the result of the Fed’s easy money policy. Given the low interest rates available, many larger and smaller investors have moved to real estate where there has been the possibility of, along with higher returns via rentals, also the possibility of increasing values. If interest rates increase then even more investors will leave this marketplace.
The good news for buyers is that it is much easier to purchase a home without competing against these investor, all cash, buyers.
