by Calculated Risk on 7/10/2012 12:37:00 PM

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities. Prices, as of the March Case-Shiller report, were off 61.1% from the peak, and off 5.8% over the last year.

Sales in 2011 were at record levels - even more than during the bubble - and it looks like 2012 might be an even stronger year, even with some new rules that slow the foreclosure process.

From the GLVAR: GLVAR reports local home prices up for fifth straight month, while local housing supply continues to shrink

According to GLVAR, the total number of local homes, condominiums and townhomes sold in June was 3,945. That’s down from 4,134 in May and down from 4,540 total sales in June 2011.

Even with fewer sales last month and fewer homes listed for sale each month this year, [GLVAR President Kolleen] Kelley said existing home sales are ahead of the record pace set in 2011, when GLVAR reported 48,186 existing properties were sold in Southern Nevada.

The total number of homes listed for sale on GLVAR’s Multiple Listing Service again decreased from May to June, with a total of 16,930 single-family homes listed for sale at the end of the month. That’s down 2.4 percent from 17,346 single-family homes listed for sale at the end of May and down 25.4 percent from one year ago. GLVAR reported a total of 3,713 condos and townhomes listed for sale on its MLS at the end of June. That’s down 0.4 percent from 3,728 condos and townhomes listed for sale on its MLS at the end of May, and down 29.2 percent from one year ago.
...
By the end of June, GLVAR reported 3,690 single-family homes listed without any sort of offer. That’s down 2.9 percent from 3,800 such homes listed in May and down 67.5 percent from one year ago. For condos and townhomes, the 1,083 properties listed without offers in June represented a 2.4 percent increase from 1,058 such properties listed without offers in May and a decrease of 59.2 percent from one year ago. ...
34.2 percent of all existing local homes sold during June were short sales, which occur when a lender agrees to sell a home for less than what the borrower owes on the mortgage.

Bank-owned homes accounted for 27.8 percent of all existing home sales in June, down from 32.6 percent in May.

“Since banks have been encouraging short sales and doing fewer foreclosures, short sales have finally surpassed (the sale of) foreclosures,” Kelley said.

Inventory continues to decline (down 67.5% year-over-year for single family homes) and sales are slowing, but still on pace for a record year.

The percent distressed sales was extremely high at 62% in June (short sales and foreclosures), but that was down from 67.3% in May. Some of this decline was due to the new foreclosure rules in Nevada.

It is important to understand that sales in these highly distressed markets will probably decline as the percent of distressed sales declined (sales are at record levels in Las Vegas - even above the bubble pace!). The key is to watch inventory (listed inventory is down 25.4% from a year ago, and non-contingent inventory is down 67.5%) and to watch the number of conventional sales.