We are in a Buyer's market. They are in the driver's seat these days, steering for great bargains across the valley.
Resale houses are taking longer to sell - up to three or four months, compared to two weeks or less when the market was hot - and some sellers are accepting lowball offers. Gone are the waiting lists and overnight campouts as anxious buyers competed among one another for new houses. Gone too are the bidding wars for resale houses and above listing price offers. Instead, a number of home-sale indicators show how the Las Vegas Valley is now experiencing a buyer's market.
A record number of resale houses - 18,467 in April - are on the market, along with another 4,000 new homes. The increase in the housing inventory is largely attributable to real estate investors and speculators who are now trying to cash in before the market cools too much, said Dennis Smith, president of Home Builders Research Inc.
Home builders are offering purchase incentives, including free lawn maintenance, swimming pools, washers and dryers and even the cost of packing and moving customers into their new residences. Some incentive packages have been valued by builders at up to $100,000. Builders are offering higher commissions to real estate agents - up to 6 percent in some cases. With contract cancellations reaching 38 percent in some new subdivisions, builders are cutting staff and prices on new homes by tens of thousands of dollars.
Las Vegas real estate agents who represent sellers aren't hitting the panic button. With the valley's continued population and job growth, demand for housing, they say, hasn't lessened. What has changed: there are more homes for sale than there are buyers. Housing prices started escalating dramatically at the end of 2003, triggered by a relatively small inventory of new and resale homes. The inventory shrunk in March 2004 to 2,583 homes - such a paltry amount that they were selling within hours of being listed.
The dynamics of who's calling the shots have changed. In April, 18,467 resale houses were listed for sale and builders' inventories showed another 4,000 or so homes. Additionally, another 6,000 condominiums are - or will soon be - for sale after being converted from apartments. Buyers can now go after the pick of the litter and negotiate for better prices. Homeowners also are cashing in their equity, either to move up - or out of the valley altogether, he said. They're hoping to capitalize during the spring, traditionally a time of increased sales activity.
With about 30 houses entering the market daily, one broker expects the number of resale houses for sale to reach 20,000 this year - a first for the valley.
"Buyers understand there are deals out there to be had," said Ken Perlman, vice president at the California-based Sullivan Group Real Estate Advisors. "They hear the market is slowing down and they expect incentives or prices to be in their favor as they go out to look for homes."