Las Vegas single-family house inventory drops again

For the local real estate market the new year starts with some rare positive news. The Greater Las Vegas Association of Realtors, or GLVAR, released its December statistics and they show that the single-family house inventory in the MLS decreased to 22,005, a drop of 1,489 units from November.

Some may argue that December is traditionally slow, which it is, yet the inventory has been slowly sliding since August and that is significant. It's a four-month trend that cannot be ignored. It just might indicate that the housing sector is cautiously heading toward a working balance between supply and demand, which eventually will translate into a more stable marketplace.

In other categories, the single-family inventory, although now falling, is still 23.4% higher than a year ago, so there remains work to be done. The condominium and townhouse listings grew 14% from December of 2006.

The median price for a single-family house declined 15.1% from last year, standing now at $260,000. The price level is moving down to narrow the boom-widened gap with the average household income, a necessary development for a healthy market. It wouldn't be surprising at all if it went even lower in the coming months.

December sales were down 46.5% from a year ago, about where it has been for several months. Over one-fourth of them were either bank-owned, or repossessed, homes or short sales, which is noteworthy. Banks don't want to own real estate, so they often sell homes for less than the appraised value and that pushes the median price point lower. Sort of an artificial adjustment. This may continue well into 2008 as thousands of exotic adjustable rate mortgages, or ARMs, will reset higher during the year and predictably bring about more foreclosures.

The housing inventory slipping for several months in a row is welcome news, but as the other numbers describe, the market still has a way to go.