November 2011 – Las Vegas Real Estate Market Update
Hello welcome to Todd Miller TV. I wanted to give you a market update for the month of October 2011. First of all I, wanna apologize for no videos for the last week, I couldn’t talk. So you can’t/one of the bad things about doing a video blog is if you can’t talk, you can’t video blog; and I don’t text blog and I don’t want to type bunch of stuff out. So, there were no blogs, and/so I apologize for that. But I can talk today. At least enough to do a video. So, October 2011, very interesting month. You probably remember 6 months ago I did one where I also broke out the percentage of sales by financing type. Cash, Conventional, FHA, and VA; and we’re gonna go over those again and you’re gonna find something very striking, strikingly similar. So we’ll start with the month of October, there were 3,540 total closings. That’s how many houses sold through the MLS. Condos, Single Families, Townhomes, all of it. Okay? Why is that number important? Because if you’re looking at the vacuum it doesn’t mean anything. Well, it means something if you compare it to the total inventory of houses. There are 13,164 houses currently available. What that means is the absorption rate is 4 months. Meaning, if were to take those houses and over/and not out new houses on the market, in 4 months they’d all be gone. That’s all the houses that includes the shortsales. Okay? We take the shortsales out, that’s 6,000 houses. We only have 7,200 houses left. That means in 2 months, all the houses are gone. So we have 2 to 4 months purchasable inventory here in Las Vegas. A normal healthy market is 5 to 6 months. What that means is, upward price pressures we tend to see, and that we have multiple offers on a property; so we’re seeing both of those. Bottom end, we’re seeing prices starting to come up, and we’re seeing the multiple offers on properties. Especially anything that’s priced reasonable. Okay? Now, where does the financing break out? So, we did/I did a video 6 months ago and it was/these were the numbers. 51% of all purchases were cash, 23% Conventional, 21% FHA, 5% VA. Almost identical. It was 50% Cash, 23% Conventional, 21% FHA, 5% VA. Why is that important? Why do we even care? You might be saying “Hey, I’m gonna be a Cash buyer, I’m gonna be a Conventional, why do I care with other people doing?” Well this is why, when Cash people come in to the market place, they usually believe that that’s where the investment is. In 2005 and 6, everyone was coming in with financing. Nobody was paying for properties Cash. Everyone’s was just coming in and getting financing. When people come in to buy cash, they believe that they don’t wanna loose their money. They believe that market’s in the bottom and that’s when they come in with the cash. So, it’s very telling that other people are doing this, they’re coming with cash, they’ve been doing it constantly, about every month it’s half the purchases; at the end of the year I’ll do a video where I’ll go through the whole market for the year and what happened. And if/I’ll break it into segments. It’ll probably take a couple of videos to do that. Specially the bottom end which is the most interesting part of the market. We just out a house in the market for 29,000, we got a bunch of offers. It was an older house, built in the 50’s. You know it’s a one very big house, but you know, the thing flew off the market. And I think when looked at those little end, the little end houses, the low end houses, I think we’ll find something very interesting with them; their time on the market’s ridiculously short. I wanna say 20 days on average or so. So, the 2 important things I want you to get out of the numbers for October are one, absorption rate. Houses being purchased of all property types. First is what’s available, 2 to 4 months, and then half of it’s cash. Those are very important numbers for you to understand why that’s important in the market. So, I want to share that with you. Anyway, Thank you for being patient with me waiting a whole week for a video. I promise I’ll be doing it everyday. So long as I have a voice. And hope to/hope you what the other videos. Hope to see you on another video. Thanks a lot.