The nice people at Calculated Risk have done a nice job of putting together everything that’s wrong here in Vegas.

Meanwhile, Bigger Pockets points out that although our sales are way up, our real estate market is dominated by bank owned properties and short sales. In his words, “pity the retail seller“! It is still very difficult for Joe and Jane Average to sell a Vegas home right now.  Not impossible, just difficult.

This problem isn’t unique to Vegas, either. Very few people are selling homes and “moving up” unless it is an absolute necessity (job transfer, etc). A lot of current buyers are first time buyers — who don’t need to sell a home before buying another one. I am still seeing a lot of investor activity, but it’s mostly small investors hoping to get in on the same great deals as everyone else. The experienced “fix and flip” people are out there;  some homes they have purchased and renovated appear in the MLS. However, most of the investors that call me are looking for something cheap, in good condition now, and rentable.

Nationwide, it is true that home sales are up. Inventory is up too, as private sellers start to think a sale is possible, underwater homeowners come to the conclusion that a short sale is better than being foreclosed upon, and banks release more inventory for sale. If you believe in the “phantom inventory” theory, you should expect to see Vegas inventory of bank-owned homes jump from current levels at least 20% (another 1000 REO listings) by the end of the first week of July (June is the end of the accounting period for most businesses including banks). Some people see no sign of a bottom soon.

While I wouldn’t dream of speculating about the national housing picture, I do see good signs locally. Our local economy is not terrific, but we still do have toruism and other industries. Since the supply of bank-owned houses is finally shrinking, there is a chance to move through some of the other inventory. I do think we are putting in a bottom in prices (except on severely distressed homes that need a great deal of work), although that process may take a few months. I am concerned that the fever I see to “get the best deal” may be a mini-bubble.  It is clear that we won’t be able to say we have a full recovery until the pool of buyers is more balanced: we need experienced buyers who are upgrading or downsizing or relocating; we need investors both to rehabilitate severely distressed homes and to increase our rental inventory; Realtors need to proatively educate potential first time buyers about how to become homeowners and what to expect along the way.