The time for Las Vegas’ beat-up housing market to be a gold mine for Wall Street is waning.
Big-money investors streamed into the valley after the bubble burst to buy cheap homes in bulk to turn into rentals. They paid cash, sight unseen, telling brokers to find as many houses as possible. Their buying binge helped pull the market out of the trash heap, sending prices rising at one of the fastest rates nationally. But their hoarding also made it nearly impossible for locals to buy a place.
That competition, however, has eased considerably, increasing the chances that valley residents can buy homes.
More from the 8/3/14 issue of The Sunday:
- Why Southern Nevada stinks at recycling
- South side has its own struggling stretch of Strip
- People on the Move: Aug. 3-9
- Married gay veterans’ next battle is for equal VA benefits
- The Sunday editorial: Immigration woes point to bigger problems
- Cicadas: The never-ending summer alarm clock
- Football helps former gang member gain his focus
- Cosmopolitan still forging its own Vegas vibe
- By any name, cornhole is expanding beyond the tailgate
- Citizenship granted: ‘It’s like a new birthday for me’
- Henderson weathered recession with cuts to salaries and services, now considers tax hike
Buyers paid cash for 35 percent of the used homes that sold in June. That’s down from a peak of almost 60 percent in February 2013 and the lowest share in almost five years, according to the Greater Las Vegas Association of Realtors.
Faced with rising prices they helped create, investors have been pulling back for months. And as they buy fewer homes, sales volume is dropping and more listings are being ignored, creating opportunity for other buyers.
The pace of used-home sales is down 13 percent year-over-year, and about 7,100 single-family homes were listed at June’s end without offers, almost double the inventory from a year earlier, the GLVAR found. (Another reason for that rise is homeowners, emboldened by the rebound, are overpricing and refusing to budge.)
The investor-fueled, meteoric rise in prices also is slowing. Since the market rebounded, it’s been normal to have year-over-year price growth of 25 to 30 percent any given month. In June, however, the median sales price for used single-family homes was up just 14 percent from a year earlier, to $199,900.
But just because competition is waning, doesn’t guarantee that you can close on a sale.
Nevadans have some of the worst personal finances in the country, and many residents, after going bankrupt or losing their homes to foreclosure during the recession, likely still can’t get mortgages. Even if they qualify, affording the down payment might be impossible.
Nevadans’ average down payment is 15 percent of the purchase price, LendingTree says. However, 56 percent of households statewide are in a “persistent state of financial insecurity” with little or no savings, according to the nonprofit Corporation for Enterprise Development. That’s the second-highest rate in the country, behind Mississippi.
Las Vegas’ housing market still has a long way to go before it’s fully healthy, given its high rates of underwater borrowers and foreclosures. But for now, if you’ve got the cash and the credit, at least you might be able to buy a house.