There is no doubt about it; 2013 was a turnaround year for the Las Vegas real estate market! January started with a proverbial bang, with the number of homes sold increasing dramatically from the past. It seemed like everyone suddenly wanted a piece of the market, and prices, which had been fairly flat for the past couple years, started an almost meteoric increase. I think almost everyone held their breath those first few month, wondering if it was just a market anomaly rather than a true recovery. After the first few months when sales weren’t slowing down, we started realizing that we were indeed in a market recovery.
Investors played a major role in the recovery. They were bringing in money from all over the world and snapping up the vast inventory of distressed (ie short sale, foreclosure and auction) homes that had been dominating the market. These types of listings tend to lower overall sale prices, so as the supply started drying up, prices increased. Cash had been king for the past several years as banks tightened up their lending requirements in fear of repeating the mortgage debacle we had gone through, meaning that folks who needed financing in order to purchase homes were pretty much left out in the proverbial cold.
As prices increase and the number of low-priced distressed homes decrease, home owners who don’t have to sell are putting their homes up for sale are being lured by the higher prices and we are seeing the return to a more normal market. The dramatic increase we’ve seen in the number of active listings is, in fact, in large part these traditional listings.
In 2013, we can see that prices have been fairly stable since September, and the number of sales dropped a bit during the same time. This cooling trend is not cause for alarm though. We generally see a cooling of the market during this time frame. In fact, I don’t anticipate the market heating up again until January/February 2014.