Las Vegas Sun Newshousing:
Las Vegas housing market shows continued improvement
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Wednesday
21 November 2012
12:16 p.m.
The Las Vegas area housing market continues to outperform last year with rising sales and more building permits.
There were 593 new home sales in October in the valley, according to a new report from Las Vegas-based Home Builders Research. That’s almost the same as September’s 591 sales, but it’s up 62 percent from 367 in October 2011.
The median closing price last month for new homes was $216,614, up 8 percent from September and up 10 percent from last October.
Valley builders also pulled 576 new home permits last month, up 31 percent from September and nearly triple the number in October 2011, when 196 permits were issued.
The numbers are promising but might mask deeper problems, Home Builders Research President Dennis Smith said in the report. There could be tens of thousands of homes listed for sale in the coming months, and there is “no doubt” that the valley’s rising prices are not sustainable.
He also pointed out that cash buyers are picking up many of the homes. Since the housing bubble burst, out-of-state investors have flocked to Las Vegas to buy cheap homes and rent them out, driving up sales volume and prices.
“The housing market continues to amaze,” Smith wrote. “Is it real?”
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No, it's not real. A real housing market consists of owners not renters. Not to say that investors keeping the housing market afloat is necessarily a bad thing, it does however give the illusion that everything is hunky dory when in fact, it's not.
More positive than negative, but having so many cash buyers is akin to gov't bail outs - short term, band-aid phony fix which does not solve long-term issues.
Sound Dude: I'm with you and I would add that until the existing short sale/foreclosure inventory is absorbed, it's gonna be a continued artificially bouyed market, easily crashed by the appearance of that inventory in any significant volume. They're gonna have to let it loose sometime and when they do, everyone who owns is gonna lose more value. Heh, but we get smaller gov't as an unintended consequence, since their revenue goes into the crapper too!
Prices are up a lot on the lower end. What about rents? They seem stuck. With rents so low, why buy a home as an investment property? Especially in an area with such a low end crowd renting.
Anybody seen changes in renting costs?