Traditional Home Sales Overwhelm
Traditional home sales made up the over-whelming majority of Las Vegas home and condominium sales in the third quarter of the year as foreclosures and short sales declined, according to data from the Las Vegas Association of Realtors.
Some 9,420 residential properties were sold by association members from July through September, which is historically the most active period of the year for home sales since children are out of school during most of the period for summer vacation, making it an easier time to move for most families.
The largest percentage of properties that changed ownership (83.1%) were traditional home sales. Only 7.4% of single family homes, condos and townhouses were REOs or foreclosures that had been previously taken back by lenders.
The remaining 9.5% were properties sold to home buyers through bank assisted short sales, in which sellers cooperate with lenders to sell for prices that are at less than what is owed on a homes mortgage. Foreclosure sales and short sales made up the majority of sales during much of 2011 and 2012 as investors bought up cheaply priced homes in the Las Vegas area.
Investor purchases and flipping homes have declined in the marketplace as prices rose, but an onslaught of foreclosed homes is expected to be listed on the market in 2015. However, banks and the nations’ giant mortgage lenders, Freddie Mac and Fannie Mae are expected to slowly place the inventory on the market for sale in efforts to keep the market stable, and deter major price declines. Thousands of homes are sitting vacant left as a result of the foreclosure crisis in the Las Vegas area.
Real estate analysts expect many will be destroyed over time by lenders and community involvement, while other properties are expected to rot and become eyesores in some especially hard hit areas of the city.
Mortgage rates have hovered near record lows for more than six months as the 30-year fixed rate loan reached the lowest average it has in more than a year during early December. The rates have acted to incentivize home buyers, especially first time buyers who have hesitated to take the plunge into home ownership.
Mortgage rates are expected to remain low during at least the first part of 2015 as the Federal Reserve keeps the overnight rate it lends to banks at near zero.
However, mortgage rates are expected to increase substantially over the coming year by some real estate analysts, including Realtor.com economists, who forecast the 30-year fixed rate to increase during the year to 5.00%.