The total homes listed for sale in Henderson MLSand Vegas MLS fell to 18,200 in March, down 18 percent from 22,184 a year ago, when there were 11,334 available without offers.
That means homes under contract grew only slightly, from about 11,000 to 13,000 in the past year.
Several factors are contributing to declining inventory, starting with the robo-signing law that throttled notices of default filed by major lenders since October, said Dennis Smith, housing analyst with Home Builders Research.
Going back to last year before the law was passed,lenders were filing 2,700 to 5,700 defaults a month. Now it's about 300 a month. Bank repos are down to about 800 a month, the net effect of the law.
There has also been a sharp increase in short sales, homes offered at less than the principal mortgage balance, which requires lender approval. These homes may stay under contract for as long as six months.
Smith does not see a wave of foreclosures materializing from the "shadow inventory" which was ominously projected to hit Las Vegas.
"We will see some foreclosure inventory hit the market, but not a big wave." Banks are trying new things, like renting them back and doing more short sales."
Realtors sold 3,538 single family homes in March, a 4.4 percent increase from the same month a year ago.
The median price was $123,000, down 2.3 percent from February a year ago, but up 1.7 percent from February this year.
"The shortage of inventory is bringing multiple offers like in the boom years when people were overbidding list prices. "Right now, we have to find inventory, and where we see this from is investors who bought with cash. They will be able to sell and carry the note at six percent and get a higher return from their investment than waiting for appreciation."
The Realtor's Association reported that 1,790 homes (40.7 percent) were sold as foreclosures while 1,171 (26.6 percent) were sold as short sales. The median price for a foreclosure was $106,000 and for short sales was $121,000.
Cash buyers represented 54.5 percent of all sales, compared with about 40 percent before the housing downturn.
"A combination of things will work to keep resale inventory low. It will be the rentals, the short sales, loan modifications. Foreclosures are the biggest loss the banks will have. Banks are starting to wise up.