Home prices increased for the fourth straight month in Las Vegas as investors continue to dominate the market with cash offers above list price, the Greater Las Vegas Association of Realtors reported Thursday.
Realtors sold 3,413 single-family homes in May, a 7.2 percent increase from the previous month and 9.7 percent increase from the same month a year ago. The median price rose 0.1 percent during the month to $128,000 and is up 1.6 percent from a year ago.
The inventory of homes for sale decreased 23.8 percent from a year ago to 17,346 listings, though only 3,800 homes are available without a pending or contingent offer, down 66.3 percent from May 2011.
The dwindling inventory is largely attributed to Nevada's robo-signing law requiring lenders to provide an affidavit of authority to foreclose before filing a notice of default.
"For most sales, there are multiple offers," Realtors association President Kolleen Kelley said. "There tends to be somewhat of a bidding war on nice properties. Investors are outbidding each other and not getting appraisals."
Las Vegas is among a handful of "turnaround metros" where prices rose in the past three months after big declines in the previous year, said Jed Kolko, chief economist of online listing service Trulia.com.
Asking prices - a leading indicator of sales prices - rose 2.7 percent from February through May after falling 10.3 percent in the previous 12 months, Kolko noted. Excluding foreclosures, asking prices are rising strongly, while prices on foreclosure listings are still dropping, he said. Those increases haven't shown up in price index yet because Trulia's Price Monitor is based on asking prices, which lead sales prices by several months, he said.
"Many foreclosures remain in the pipeline," the economist said. "The path for prices depends on whether those foreclosures still in the pipeline come onto the market all at once or are spread over time. If they come to the market all at once, prices would take a bigger hit, but if they trickle out slowly and steadily, overall home prices could avoid a double dip."
Realtor Sam Wagmeister of Prudential Americana Group said Las Vegas is a rising housing market right now, even if it's only being driven by temporary market conditions.
"When I'm working with a buyer, I have to ask if they're willing to offer above list price, and if it won't appraise, if they're willing to bring in cash," he said. "I'm also seeing short sales that have been approved by the lender at one price, it falls out of escrow and comes back at a higher asking price."
Wagmeister had a buyer who offered $127,000 for a home listed and appraised at $124,000. The bank reviewed the offer and 60 days later came back and wanted $132,000, he said.
"It might reflect the rising market," Wagmeister speculated. "I just go out and do my job every day. I can't let market conditions and rumors affect me. It puts additional responsibility on me to disclose to my clients what might be happening."
While rising prices will eliminate many entry-level buyers, an end to the roller coaster ride for homeowners would be welcome relief for sellers, Realtor Robin Camacho said.
"I just sold a home for a client who would have had to do a short sale just six months ago," she said. "Knowing what was coming, I advised her last year to hold off on listing for a bit longer. She just closed, and can buy a home again tomorrow. With the IRS exemption (Mortgage Debt Relief Act) expiring in December, I wouldn't give that same advice today."