Las Vegas provides more evidence that post-bubble housing markets are flaring up again. CNBC reports that the Las Vegas housing market has reached fresh heights of lunacy as the inventory of homes has declined to 3-months of supply. Although the vast majority of the homes for sale are foreclosures offered by banks, buyers are literally stepping over each other to outbid for these homes.
The following experience by a recent Vegas home shopper summarizes what is happening:
“We went to a home that had been on the market for one day, and the key was stolen out of the lock box. Our Realtor said immediately, ‘You want this home.’ She told us another Realtor had stolen the key because they wanted their client to get it. So what did my Realtor do? She broke in. And sure enough this was the home we fell in love with. It was on for $132,000 so we decided to be really aggressive and offered $160,000, plus we had government backing on our loan. Well our Realtor called that night and said, ‘You’re not going to get the home. They got 30 offers and half are cash offers, so the bank is not even going to look at you.’ The banks just want the cash to unload these places.”
Las Vegas may have finally hit rock bottom in its post-bubble wake. As the Federal Reserve promises to keep money extremely cheap through much of 2010, the price response in post-bubble markets like Las Vegas could surprise more to the upside than we might expect.