Housing supply still tight

Q: We keep hearing how there aren’t enough homes available for sale in Las Vegas right now. Do you see that changing anytime soon? — Cheryl P., Las Vegas

A: We’ve been facing a very tight housing supply for more than a year. According to the Greater Las Vegas Association of Realtors, there were 3,047 single-family homes listed for sale in February without any sort of pending or contingent offer. That’s down 53.4 percent from one year ago. That’s about a five-week supply of available homes. In fact, GLVAR now shows more homes are available to be rented today in Southern Nevada than to be purchased.

I think we might start to see more homes hitting the market in the near future. It still may not be enough to meet the continued strong demand.

First, I think the bulk of our local housing supply will continue to depend on the nation’s largest banks that hold and service most of the nation’s mortgages. I’ve seen reports suggesting that banks are sitting on tens of thousands of homes throughout Southern Nevada that will eventually hit the market. Most of these homes are still occupied by people who have been living in them for many months or even years without paying their mortgage.

Logic dictates this won’t last forever and that these homes will eventually hit the market.

For months, nearly half of all local home sales have been short sales. I expect short sales to remain a big part of the local housing market at least through Dec. 31, when the Mortgage Forgiveness Debt Relief Act is set to expire. Starting Jan. 1, and barring any further extensions by the federal government, any amount of money a bank writes off in agreeing to sell a home as part of a short sale may become taxable when sellers file their income taxes.

Secondly, local homebuilders are doing their part to build and sell more homes than they have in past years. According to Home Builders Research, homebuilders in Southern Nevada recorded 510 new-home sales in February. New-home sales are up 94 percent for the first two months of this year compared with the same period in 2012 and have more than doubled compared with 2011. Local builders also pulled 498 permits in February to build more new homes. That’s more than twice the 236 permits they pulled in February 2012.

I’m seeing more investors who have been renting out their homes starting to list them for sale. Assuming that trend continues, that would provide more homes for our steady stream of eager buyers. But even if all these sources pan out as I hope, I still suspect we’ll be talking about our tight housing supply for months to come.

Dave Tina is the 2013 GLVAR president. Email questions to ask@glvar.org. For more information, visit www.lasvegasrealtor.com.