Friday, January 11, 2013

Las Vegas Housing: Cues for a Bottom

Interesting news on the Las Vegas housing market this week - sales reached a 5-year high according to DataQuick. Surprised?

The positive signals have been building for the last 14 months:

  • The deceleration of Las Vegas' price declines in January 2010.

  • Towards the end of 2010, inventory started spiking causing downward price pressure in Q4, but the relative drop in prices compared to the influx of new inventory was mild.

  • By October 2010, the trends showed that house-flippers re-emerged in Las Vegas.

More recently, the price of new listings (the new sellers entering the market each week - black line below) moved above the overall market ask price (all available sellers - orange line below) by mid-October 2010:

click to enlarge


Price of new listing and aggregate market ask prices since September 2010:

On a percentage basis:


Price of new listings as a percentage of aggregate market ask prices

With price reductions leveling off this Spring (still elevated but down from the 55% range we saw back in early 2009):


Percentage of active market sellers that have reduced their asking price in the most recent 90-day period

The cues are there for a bottoming in Las Vegas. Remember the house wants you to win - that's the only way you'll come back for more...

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

No comments:

Post a Comment