The year-end home sales and foreclosure data has been compiled and posted to our website, and there was some good news amid the rubble. Existing single family home sales peaked in 2005 at just over 5,800 units, but it took a few years before the glut of foreclosures and short sales began to flood the market. With prices tumbling and inventory rising, it set the stage for investors to re-enter the market – and I say “investors” because, for the most part, they were the only ones in a cash position able to take advantage of the deals being offered. Existing home sales began rising from the depths in 2009 and have steadily increased since – and 2011 was a banner year for existing home sales with over 6,100 single family unit sales (up 11% from 2010).
Notice that unit count is even higher than it was at the peak of the buying frenzy. The difference, of course, is that prices have continued to fall since the end of 2005, although it appears as if we might finally be getting close to the pricing-bottom. In 2011, the median sales price of existing single family units dropped another 12%, but the last several months of the year showed a marked “flattening” as the rate of descent began to lessen.
New home sales continued to struggle in 2011 with another 19% drop, although the median sales price actually managed to increase 7% from 2010. If there’s any bit of good news for the area’s new home builders, that was it – they may be selling fewer homes, but at least they have been able to hold the line on pricing. Still, with barely 400 new units sold in 2011, the market is a far cry from the 3,000 annual units it was absorbing just a few years ago.
Foreclosure activity was trending down in 2011 even before AB284 came along and changed the game entirely. Once the law took effect on October 1, Notices of Default (which were averaging around 500 per month) effectively stopped and it will take some time to figure out how the banks will deal with delinquent mortgages in Nevada from here on out. There will most certainly be an increased reliance on short sales to clear inventory off banks’ books, but there could be a lot of people living mortgage free for a very long time if they choose not to go that route. In the last half of 2011, actual bank repossessions declined 25% compared to the first half of the year and Notices of Trustee Sale (NTS) declined 24%. There is still a critically high number of “distressed” homes out there, but it’s encouraging to see these numbers moving in the right direction.
Be sure to take a look at the data here on our website, and drop us a line if you have any questions!