Is the housing market bifurcated or should all supply be considered part of a single housing market? Evidence is mounting that the market is the market – REOs and non-distressed properties cannot be isolated.
From Friday’s DSNews article – “Heavy Distress Sends Las Vegas Home Prices to 15-Year Low” –
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 57.5 percent of the Las Vegas resale market during the month, up from 45.2 percent a year earlier, the real estate tracking company reported…
…DataQuick says the heavy presence of investors and others paying cash, with their focus on lower-cost homes, helps explain why 41.1 percent of June sales were for less than $100,000.
The data shows that REO demand in Phoenix and Las Vegas is affecting aggregate market price trends of the so-called “regular” market. Prices are low, but stabilizing even with the increased inventory hitting the market – a result in the increased REO sale activity.