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Last Friday Las Vegas foreclosures were once again mentioned in the news and reported as being #1 in foreclosure filings in the country. The report mentioned that Las Vegas real estate showed that one in every 23  homes were in foreclosure. We are at record levels never seen before, and the number of Las Vegas homes for sale should continue to climb or so we think.

Banks are at it again. The same banks that brought Las Vegas from being the entertainment capital of the world to making us known as the foreclosure capital of the world are controlling the market again. I applaud the banks as it seems that they have grown a bit of a conscious.  They are also just reaching into their mind for the basic instinct of survival by not flooding the market and destroying Las Vegas real estate market even further. It is estimated that there are as many as 30,000 homes in banks inventories and they are not ready to release them. In fact in some neighborhoods prices are starting to creep up a bit allowing investors to sell some of the Las Vegas real estate they purchase a few months back.

News media is reporting that banks cannot get homes on the market fast enough yet we are at 8738 Las Vegas homes for sale at the time of writing this post, and that is a 50% decline in inventory since last year.

It is not that they cannot keep up with the Las Vegas foreclosures, but more of a case of they don’t want to. In reality neither do the markets affected by it despite the fact that it is contrary to what many frustrated buyers feel.  Supply and demand is what is at play, as well as other factors such as bank liquidity. Banks have effective manipulated the rate at which Las Vegas homes enter the market converting a buyers market into a sellers market.  A sellers market occurs only when a few month of inventory are left for sale and is calculated by the amount of homes  are for sale on the market and the amount of  Las Vegas homes being sold, that is the simple formula. 

We are definitely in a Sellers market for the time being.

Las Vegas buyers both cash and financed are out looking for homes in record numbers, and many are not locals. We have seen cash buyers from every place on the planet come to Las Vegas, and with the dollar declining as it has been vs other currency we are a bargain. Buyers that are buying homes with any financing are finding themselves in multiple offer situations, and homes at lower prices are being purchased at above asking price, frustrating investors.

Banks have increasing inventories of  Las Vegas homes for sale, and they are not going to release them fast. Here is why, if they do, we will see all home prices collapse, and if home owners are felling the pinch now they will feel it even more as their home prices sink even more, investors portfolios will diminish and that will spiral us into an even worse depression.

The quality of the homes being placed on the market will likely decline as abandoned  Las Vegas homes become prey to people trying to make a quick buck selling the abandoned appliances.  Banks in an effort to make the homes eligible for the FHA buyers will continue buy stoves and other items to brig them back to guidelines. Buyers will have to bring patience with them as they go in search of their home.  Buying systems such as the one I’ve developed will  have to be put in place if you want to be the winning bid. Having one in place is the only way to win in this market. We will continue to be the wining bid.

Today, as I have heard many times we rank somewhere in the top ten markets for foreclosures. The news article in today’s Yahoo front page spoke about a home with 7 bedrooms in Chicago that had no buyers at 7,000 starting bid, and went on to say how banks are struggling to sell their real estate.

Not here. All Las Vegas real estate as of lately seems to have multiple offers as droves of buyers have been flooding the market. I hear it from cash buyers, and I hear it from FHA buyers alike; cash buyers want to purchase Las Vegas homes for sale at below asking because they heard or read that they should offer below asking price. The FHA buyers can’t go high enough. After a few offers most Las Vegas real estate buyers get it and offer above asking if they truly expect to close on a home.

What is going on?  Well… banks have effectively manipulated the market. How?, by restricting the flow of homes to the market, they are effectively reducing supply both avoiding a greater erosion of price and increasing demand. Some homes tracked as a result of the demand have been sold for as much as 30,000 above asking price, and it is particularly true  if you are buying below 150,000.  How far behind are the banks, it is hard to tell, but I’ve seen recently listed Las Vegas foreclosures that had been in the hands of banks for little over a year. The homes are definitely being held back. 

I have two homes listed that are owner occupied in which the bank that owns the homes said to keep the in the home until it is sold.  They are both short sales, and because there can be so many complications and unexpected results we have not received any offers.  The sellers continue to keep up the pool, the landscaping and other items around the home in exchange the bank has kept them in place now nearly one and a half years. The foreclosure filing had occurred a long time ago, but I remember as the 111th day came around and the home should have faced sale, the bank called and said “keep it listed”.

Las Vegas foreclosures have become part of this economy and represents many shattered dreams of home owners and speculators see everything vanish. Their credit scores  are destroyed, the down payments they put in disappeared, and the reality of  a deficiency judgement state sinks in. I will continue to make Las Vegas foreclosure investors money and I will continue to have full classes as I teach at a local non profit foreclosure prevention seminars, and I will continue to help this new breed of buyers that have had to jump through all kinds of hoops to get a home loan and begin to call that Las Vegas foreclosure… HOME!