"Where have all the homes gone?!" In the Las Vegas real estate market it's like the clock has suddenly been turned back to the year 2004. Within hours there are multiple offers on everything listed under $250k, often sight unseen, and most accepted contracts are going above list price. New home builders are warning real estate agents about imminent price increases.
At the beginning of November there were approximately 11,500 single family homes actively on the market that were not yet under contract. Today, less than 6 months later, there are only 5,074 active single family listings in the Las Vegas MLS. That's about a six week supply at the current rate of absorption.
This is a direct result of Assembly Bill 284, which effectively stopped the non judicial foreclosure process in Nevada. Before AB 284 became law, lenders were filing around 5,000 Notices of Default per month. Now that figure is down to about 300 a month. Actual foreclosures are down to about 800 per month, and even that figure is dwindling rapidly. REO teams are downsizing staff and services, as there doesn't seem to be an end to the drought any time in the near future.
So where is the "shadow inventory" we keep seeing in the news? Since Nevada lien holders can no longer foreclose on properties non-judically, they have gotten much more aggressive about encouraging and approving short sales. Many owner occupants with true hardships that don't qualify for loan modifications are receiving cash incentives from $3k up to a whopping $30k for cooperating in a short sale.
Lienholders are also modifying many borderline loans, often unsolicited. I had a call from one of my clients last week. He had been trying to refinance his home through a new lender. (He was just barely upside down and had excellent credit.) Out of nowhere, he got a call from his existing mortgage lender, Bank of America, offering an interest rate reduction that saved him more than the refinance would have, at no cost, and without extending the life of the loan!
So in the foreseeable future, the "shadow inventory" in Nevada is a myth. And with the Las Vegas economy recovering, by the time AB 284 expires, many Nevada homeowners will be able to achieve a work out solution with their lienholders.
For more news on Nevada's improving economic situation and rapidly shrinking inventory, check out this week's recent news articles:
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