While home prices remain depressed in Las Vegas, dominated by foreclosures and short sales, the metropolitan area ranks as the No. 3 seller’s market in the nation, according to Zillow.com’s new ranking of buyer’s and seller’s markets.
Home sellers are thriving in San Jose, Calif.; San Francisco; and Las Vegas, where price cuts are relatively uncommon and homes often sell at or near their asking price, Zillow spokeswoman Allison Paoli said Tuesday.
On the other end of the spectrum, Chicago, Milwaukee and Cleveland are still buyer’s markets, with homes taking longer to sell and buyers getting average discounts of 5 percent off the asking price.
Zillow analyzed data on sale-to-list price ratios, the number of days listings spent on Zillow and the percent of homes on the market with a price cut, and ranked the 50 largest metro areas to determine whether buyers or sellers have more negotiating power in a given market.
Las Vegas came in at 0.995 on the sale-to-list price ratio, or half a percent difference between the sale and list price, and only 18 percent of listings saw a price reduction in May, Paoli said. That compares with a 0.949 ratio for Chicago, where 40 percent of list prices were reduced in May.
A seller’s market is not necessarily one in which home values are rising, but one in which sellers are more likely to sell their home for close to asking price and where listings spend less time on the market.
A buyer’s market is one in which buyers have more bargaining power, thanks to listings lingering longer on the market and sellers being forced to cut asking prices.
"What this data is essentially looking at is the supply-demand imbalance," Paoli said. "You can have low home prices and still have a supply-demand imbalance."
The Greater Las Vegas Association of Realtors reported the median single-family home price of $131,785 for June, the fifth straight month of increasing prices.
They’re still down 58 percent from what they were during the peak in 2006.
Banks are putting fewer foreclosure homes on the market than they did in past years, which is leading to a tight housing supply that’s pushing up prices, at least temporarily, Realtors association President Kolleen Kelley said.
"It’s very competitive out there," she said. "People are having to deal with multiple offers. It’s changing significantly right now. Investors are still out there because people who foreclosed or went to short sale have to rent for a couple of years. The rental market is heating up."
Richard Lee, spokesman for Ticor Title in Las Vegas, said people blame Assembly Bill 284 – the robo-signing law – for the shortage of available homes for sale, but conditions are the same in Arizona and California. Sales and prices are going up there, too, he said.
"There isn’t any price reduction in Las Vegas. Nobody’s discounting anything. In fact, prices are going up," Lee said. "It’s a different anomaly, but it’s not unique to Nevada. The other thing is the mindset that Las Vegas is on sale. Prices are wholesale."
Kelley said Las Vegas has been the nation’s best housing market in terms of pricing for quite some time. Only time will tell whether recent price increases prove to be somewhat artificial, she said.
"I think it depends largely on how banks handle the mortgage defaults in their portfolios," she said.
Zillow chief economist Stan Humphries said it’s refreshing to see some markets swinging back in favor of sellers, with asking prices being met and listings spending fewer days on the market.
"It may seem counterintuitive that some of the best markets for sellers are those that have seen the largest price drops since the housing recession began," he said.
"However, this is likely due to investor interest, as many are buying distressed and nondistressed homes in bulk and transforming them into rentals. This investor activity is driving up prices for all homes in these markets."
Contact reporter Hubble Smith at hsmith @reviewjournal.com or 702-383-0491.