The canary in the coal mine?

Back in the early days of the mid 2000’s real estate bust…Las Vegas was the first to show signs of cracking. Now, is Vegas trying to tip us off again?

Read the excerpts from todays WSJ story below and see what you think. Personally, for the past 60 days I have been telling my clients that I feel (and see) a softening in demand and growth in listing inventory. Although we still seem to be short on properly priced inventory in certain price ranges, I can feel the tide shifting.

Also, I am of the opinion that rents will be softening up soon as there are hundreds of new rental units coming close to completion. And new construction ‘for sale’ homes are coming our of the ground everywhere…just like in 2005. Close to me, Osprey Oaks had the timing about right, but I think that DR Horton is going to be late to the party with their 2 developments on Hypoluxo and the one on Haverhill north of Lantana. Then there is Capistara just around the corner on Military (Lennar I think?) and also on Lawrence just south of Hypoluxo. I think we’ll be seeing LOTS of builder incentives in 2014 in an effort to maintain the listed pricing…just like the builders tried to do in 05/06/07.

Las Vegas: The share of homes that sold in cash last month stood at 47.2%, down from 54.8% in August and one year ago, and down from a high of 59.5% in February, according to the Greater Las Vegas Association of Realtors. Many cash buyers tend to be investors.

Home sales were down 1.2% from a year earlier, even though there were more homes for buyers to choose from. The number of single-family homes listed for sale, at 14,659, stood 12.6% below last year’s levels, but the inventory of “non-contingent” listings—homes that don’t have any offers and aren’t under contract—was 60.5% above year-earlier levels. The median sales price in September fell for the first time in 19 months.

In Las Vegas, buyers earlier this year found themselves regularly losing out to investors amid tight supplies of homes for sale. Now, “the market is softening tremendously,” said Bryan Lebo, a local real-estate agent. “Buyers are becoming a lot pickier. They’re more patient.”

In some neighborhoods, he says, homes are now selling for 10% less than they were just a few months earlier, and builders are beginning to offer generous incentives, such as home upgrades to buyers and commissions to real-estate agents, in order to stay competitive.

Thanks for reading…Steve Jackson

561.602.1258