Lately there have been signs that the real estate market is about to turn the corner and start heading up again. Although that has been mostly on the national level, economic fundamentals here in Las Vegas still look good, too, except for the residential construction sector. For a solid housing recovery, we appear to have some distance to cover yet.
The May statistics from GLVAR, the Greater Las Vegas Association of Realtors, are in and the single-family homes listed for sale category is actually getting worse. The number now is 23,042, just short of the all time high of 23,474 recorded in October of 2006. It's a clear indication that the gap between what buyers are willing to pay and what sellers expect for their property remains rather wide. And neither side is willing to compromise. One thing is for certain, it's a legitimate buyer's market in Southern Nevada.
The most worrisome aspect of this development is that about half of this inventory is empty, most likely owned by investors who are unable to sell or rent. This causes a real dilemma for the mortgage lenders who hold the paper on these vacant houses. They don't like to own property and prefer to sell quickly any foreclosed ones, but to sell now would require a drastic price cut and that would lower values all across the board. To go that route would probably be counter-productive. So, they are seemingly taking the wait and see attitude.
Enough of the bad news. On the positive side, the median price of a single-family house declined 2.8% from a year ago. It's a modest drop that we can live with, hoping that it holds for now. Holds until the inventory figures begin heading down and the market stabilizes.