A picture is worth a thousand words.

So you shouldn’t expect to see the graph at left in the national media any time soon.

The graph is generated from GLVAR data from 11 AM today. It shows that we closed about 2400 single family homes in Las Vegas in July.

This puts us ahead of 2007 and 2006 and we are within striking distance of at least 2500 closings in August since pending sales have remained at the same levels since I started tracking them in June. The 2008 monthly closing numbers have now overtaken the slowest months of 2005 AND 2004!

The median price per square foot for July closings was $115/sqft and 91% of all July single family closings were at or below $160.00 per sq ft. In the Las Vegas Valley (adjusted for 3 ML areas with traditionally lower prices) 40% of all listings, or about 5800 homes, fell into the $160/sq ft and under price range. Let’s call these homes affordable.

This gives us a listed-to-sold ratio for affordable single family homes of about 41%. (It is 32% for all Las Vegas SFR Listings in 2008 and was 58% for both 2004 & 5 during the boom.) Also, if we have 5800 affordable homes and we sell about 2400 of these per month, that gives us just under a two and a half month supply, while those priced above $160/sq ft amount to a life-time supply of over-priced homes.

Demand is generating a steady increase in single family closing numbers. The leading indicators (pending sales) show more of the same for August. Supply is adequate. Ignore the overpriced listings. Banks have more foreclosures to feed to the market. Watch the median price. $115/sq ft is higher than I expected. 9% of single family closings were above $160/sq ft. I didn’t expect anything above $150/ft.

The pigs are at the trough. There is no mortgage available for many average home buyers and the prices are still too low for many average sellers.

I expect the banks will allow the market to bid up the prices of their foreclosure listings even as the numbers of new foreclosures fall. When 90% of sales include homes priced at $170 per square foot and then $180 per square foot, more and more sellers will be able to “get out from under” and the they will begin to list their homes for sale. Then, after the election, whichever party wins will take credit for reviving the American Dream and more and more buyers (who haven’t been able to buy anything since the lender meltdown last July) will start house hunting with a pre-approval letter in their pocket. New home builders may still be missing in the mist.

This could happen just about the time City Center and its friends in Las Vegas begin to hire thousands of new employees.

Ignore the national media doom and gloom based on national market figures. Everybody buys and sells locally. Falling home values in Rust Belt of the northeast just mean higher future demand in Las Vegas and the Southwest. Market price is a function of supply and demand.

In the short run, Mr. Seller, price your house to sell.

And call the House Team.

“Here endeth the lesson.”