Frank Nason

Las Vegas Metro MLS August Sales Statistics

General Overview of the August 2009 Multiple Listing Service data for Las Vegas Metro:

August may be viewed with disappointment among those who expect a continuing month-over-month increase in single family sales, however, with 3,182 single family closings representing a 26.8% year-over-year increase I continue to see the market stabilizing and returning to a post-boom seasonal pattern of sales. For those looking for the cloud surrounding the silver lining August’s closings represent a 15% decrease from (what we believe will be) July’s 2009 peak.

Not only did sales remain strong, but median sales prices, although declining 2.2% from July, have remained relatively flat since April. The 4% bounce in the median sales price of REO properties in July was more than offset with the drop in August.

The data isn’t clear yet for August in terms of how many foreclosed properties were disposed of versus how many new were acquired via Trustee Deed sales and that information probably won’t be available until the end of this week. Unless the number of properties acquired through foreclosure continues to decline we believe we will see an increase in median sales prices as more higher priced homes enter the market and the price compression occurs at a greater level – dragging the median sales price upwards.

There are a lot of moving parts to this market though so it remains prudent to be cautiously optimistic and watch the various indicators closely.

The good news for the month is:

!    strong purchase agreement activity

!    continued flattening of sales prices

I believe that the continued decline in median prices and price per square foot for the REO properties is largely a function of the oldest properties that are being absorbed. In the beginning of the crash most of the foreclosures occurred in homes built after 2000 with a large concentration in just the years after 2004 – as you would expect – those were purchased at the absolute peak.

That is shifting somewhat as nearly 27% of August’s sales were in homes built in 1989 or earlier and represent 590 transactions. The percentage of homes built since 2006 continues to shrink as a percentage of REO transactions.

The breakdown in transactions for the month are 2,201 REO 69.2%) , 404 short sales (12.7%) and 577 arm’s length (18.1%). I see the short sale figure as a positive as it is the first month since I have been able to track that figure that it has broken the 10% level. It could jut be a result of the continuing decline in REO transactions and short sales would inevitably have to account for an increased percentage of monthly closings but I would like to believe that the ‘banks’ are figuring out how to process short sales quicker resulting in fewer foreclosures. I’ll remain optimistic until I see something that would indicate other factors are at work.

This Month’s Graphs

The graphs and table above probably tell most of the ‘story’ however, I find the Value Ratio (price per square foot) revealing also. The median price per foot declined slightly but has obviously flattened and the ranges as a percent have remained fairly constant for the last few months.

Terms Sold: Another trend I have been watching is how the properties are being sold each month. Cash transactions, not surprisingly, represent more than 1/3 of all successful REO transactions but only 1/5 of non-REO properties. What has surprised is the large percentage of FHA (37% in July). Either the appraisers aren’t being as picky on funding issues or else the REOs are in far better shape than one would expect given the ‘horror’ stories we so often read about – concrete poured down the plumbing fixtures, etc.

Days on MLS: I anticipated DoM to start to increase and possibly it will next month as short sales increase their percentage of listings and Contingent sales, however, August saw a remarkable drop in the median DoM to 24 days. Even the Non-REO (which includes short sales) had close to 1/3 of all transaction that closed in August accepted in 15 days or less!

Tidbits:

!    Asking price versus selling price: Minimum 32.8%, maximum 300.5%, median 100.0%; in non-REO, non-short sales transactions the median AP/SP was 96.7%

!    Occupied (by owner or tenant): Arms length – 23% which is uncharacteristically low; Short sale – 51.5%

!    Swimming pools – overall 16.5%; arms length 27.6%; short sale 15.6%

!    Seller points – REO 46% of all transactions; arms length 34%; short sale 55%

Methodology: Data is downloaded from the Greater Las Vegas Association of Realtors MLS website for analysis & graphing. During the course of the analysis errors are corrected that are discovered, e.g. we remove lease-option ‘sales’, correct lack of square footage, correct Seller Concession dollar amounts, etc. There are errors every month but often not great enough to affect the medians or averages except in the Seller Concessions category where there are always substantial errors. The MLS has a new statistical function that all subscribers can partake, however, since it doesn’t correct input errors any analysis created with the new capability is suspect in my opinion. So be cautious when examining data from other sources, including the Greater Las Vegas Association of Realtors.

While we do our best to cross-check information with Clark County assessor records and use a variety of statistical checks to discover errors Residential Resources, Inc. cannot guarantee the accuracy of the data. We do believe that given the meticulous ‘scrubbing’ we do that any undetected errors (including errors of omission) do not substantially affect the statistics presented.

There is usually a discrepancy between our total closing figures compared to other sources, such as GLVAR, since we eliminate closings that are actually condominium/townhouse properties that end up in the single family residential category as well as sales reported as lease-options. Additionally, since MLS data is self-reported, it may take an agent/office a couple of weeks to accurately report a closing date for the previous month – they are subject to fines so the margin for error is not great. Since we generally download our data on the 5^th of the following month (depending upon the day of the week) there may be properties that show up after our download.

Conclusions and interpretations are solely those of Residential Resources, Inc.

For further information on this or Northern Nevada (Reno/Sparks and Fernley/Fallon) or for a quote on custom analysis please contact:

Frank Nason, President

FrankNason@ResidentialResources.com

702-597-2855 Office or Toll-free 866-597-2855