In order to understand how we got to where we are today, we have to look back over the last couple of years. The real estate market enjoyed unprecedented growth across the country, especially in large urban areas. Unfortunately, this growth was built on the shaky foundation of sub prime lending which did collapse or as the media described it, the "real estate bubble burst".
RTTNEWS.COM had an article about a study conducted by Radar Logic Inc., a real estate data company. The New York based company tracked foreclosures across several large cities in the US. From January 2008 to October 2008, during which time foreclosure sales nearly tripled, home prices plummeted. According to the data provided by Radar Logic, Detroit, Las Vegas, Phoenix, Paradise Valley, San Diego and Seattle saw their largest month to month declines in home prices since they began tracking data in January of 2000.
A side effect of the flood of bank owned properties has been the reduction of home prices. As a result, home sales are up 15% from the prior year. In Las Vegas, the latest figures show that bank owned properties represent 75% of all sales, up from roughly 64% in October of 2008 (data provided by Radar Logic).
Despite the slowing of the Las Vegas economy, people are still moving to the valley. An analysis of moving requests conducted by Relocation.com shows that Las Vegas retained its top spot for people looking to make a long distance move in cities with more than 1 million residents. One of the major draws of the Las Vegas real estate market was inexpensive housing
(when compared to nearby markets, like Southern California). With such a huge inventory of homes for sale, prices have dropped below historic market value.
What does all this mean for the market? For one thing, all of this activity is helping to speed up recovery. As more properties are bought up, the discounts being offered by banks and new home builders will start to decline.
"There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure." Some buyers have been waiting for prices to stop falling and in some areas of the valley they already have.