A Knee Jerk Reaction... But Wait, Let's Think About it!

As Realtors, we get sent all kinds of emails from 

Lenders, Title Companies and others in the business sharing information they have access to

 to help educate us about what is happening in the Las Vegas Real Estate Market.

 Below is a graph we received this week with a note saying,

"When I look at this I’m thinking that we will be seeing short sales and REO’s in our future."

 

At first look, I see that Notice of Defaults (NOD's) are way up for September.

But why were they so low in June and July?

Well, on June 3, Nevada passed the Home Owner's Bill of Rights.

It's my opinion that this is why NOD's dropped when they did.

The Banks wanted to have their Lawyer's pick apart the New Law.

Second, is that 3,677 number really that high?

From Jan - May we averaged about 1,500 a month.

If you add June - Sept numbers, and divide by 4.

99 + 487 + 1,114 + 3,677 = 5,377 / 4 = 1,344

Which is below average for this year.

But this graph got people talking.  It grabbed a few headlines.

The Local News and Radio warned we could see more foreclosures.

Really?   Based on a Knee Jerk Reaction!

Front Page News... Did it get your attention? Should it?

On Tuesday, the Las Vegas Review Journal had this on their front page.

After 19 consecutive months of increases, we had 1 month with a 1% drop in the Median price.

 Should we prepare ourselves for the next Crash?

Should Home Owners Sell Now?

What does it Really mean? 

First of all, the Median Price means the middle.

Not the Average.

This is not a trend.

If you look close at the graph on the right, you can see the trends.

And within the trend you can see little up and down movements.

So unless we see this same graph in three months and it continues downward,

 I don't think we have much to worry about.

The next question I would ask is why did it go down?

If you think back we posted a previous blog about how Interest Rates had gone up a full 1 %

and how that would affect Buyers and how much they qualified for.

Maybe it's something as easy as people were focusing on getting the kids ready for school. 

Property Values have been on the rise for over a year and a half.

And more recently they have been rising rapidly.

I think Buyers are taking a step back and saying, "Whoa, Not So Fast!"

Investors are slowly backing off of Las Vegas because as Prices go up, 

and if rents stay the same, then their profit margins go down.

This is all to be expected in a normal Real Estate Market.

The market, when not being manipulated, self adjust.

Before we all get in a panic, let's just wait and see what happens.