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Mar. 19, 2008
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CORRECTION, 3/20/08 -- A story in Wednesday’s Business section incorrectly identified the executive vice president of the Greater Las Vegas Association of Realtors. Her name is Irene Vogel.

Home market keeps slipping

Statistics show drops in local new- and existing-home sales in February

By HUBBLE SMITH
REVIEW-JOURNAL

Housing in Southern Nevada

Signs mark homes for sale Tuesday on Dunnottar Avenue in the southeast valley. Sales of both new and existing homes fell in February, statistics show. An analyst said the number of foreclosures in the month exceeded the total for both new- and existing-home sales.
Photo by Sara Tramiel/Review-Journal

Click image for enlargement.

A sign marks a home for sale Tuesday on Dunnottar Avenue. The Greater Las Vegas Association of Realtors' executive director says home inventory is moving and she's seeing more sales activity.
Photo by Sara Tramiel/Review-Journal

The numbers continued to worsen for the Las Vegas housing market in February as sales of new homes plunged nearly 40 percent to 867 and their median price dropped 11.8 percent to $283,315, Las Vegas-based research firm SalesTraq reported Tuesday.

Existing-home escrow closings fell 59.7 percent from a year ago to 901 and the median price is down 13.2 percent to $250,000.

Again, the number of foreclosures during the month exceeded the total for both new- and existing-home sales, SalesTraq President Larry Murphy noted. The 1,870 repossessed homes represent a 353 percent increase from 413 in the same month a year ago.

"We're still sliding along on the bottom here," Murphy said.

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Two of three elements necessary for finding a real "bottom" are in place, he said. Inventory is declining and prices appear to be stabilizing. Sales, however, are not rising. That's the last piece of the puzzle that needs to be in place, Murphy said.

Home Builders Research President Dennis Smith counted 891 new home closings in February, bringing the total for the first two months to 1,764, down 49 percent from a year ago. The median price is off 10.5 percent at $283,000.

His resale figure for February was 1,529 for a two-month total of 3,017, a 37 percent decrease from last year. The median resale price of $235,000 is down 18.7 percent from February 2007.

Foreclosures account for about 40 percent of existing-home sales in Las Vegas and many are being sold at 35 percent to 50 percent below peak values of 2004, Smith said.

"Ouch," he said. "It's depressing and makes many (homeowners) very angry to hear, but that's the way it is."

Las Vegas has about 13,000 preforeclosure filings. Smith doesn't think the "foreclosure spigot" can be turned off quickly even with government assistance. Prices will remain low until the market rids itself of these distressed properties, he said.

"This is good news for those looking for a home," Smith said. "Not that they should all hunt down a foreclosed home. It's not as easy as it sounds. We have talked to many that have tried to play the foreclosure game and it can be very frustrating."

Both Home Builders Research and SalesTraq reported another down month for new home permits with 391 and 370, respectively. They're down about 70 percent from a year ago.

SalesTraq's Murphy found it interesting that Trump condominium-hotel had its "virgin" closing in February, Palms Place had 20 to 30 closings and Allure had 30 to 40. He expects to see more closings of high-rise units in March, perhaps 300 to 400 in addition to single-family new-home sales.

His concern is that the flurry of closings in the early months won't be sustained as fewer buyers are able to close escrow on condos that are selling for $1,000 per square foot, for example, at Trump.

"I've got a funny feeling in my gut that these guys are swallowing canal water here," Murphy said. "I'm going to give it six months after Trump has his first closing, by August. I'll bet by August that not more than 50 percent of those units have closed."

Irene Porter, executive director of the Greater Las Vegas Association of Realtors, said the good news is that inventory is moving and she's seeing a lot more sales activity. The Multiple Listing Service has stabilized at about 22,000 homes for sale.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Free Nevada wrote on March 19, 2008 11:21 PM: The third element will be coming soon. Last week, the Fed pumped $200bn into mortgage-backed-securities market and today Freddie & Fanny were authorized to buy $200bn in mortgage-backed-securities. This, plus the unprecedented rate cuts and crackdown of fraud are enough to spur lending, reduce the yield spread and bring mortgage interest rates down. Oh, and there are 30,000,000 Americans coming of house-buying age now (the Millenials' generation). If you don't understand this financial speak, just know the federal government is working hard and everything is going to be okay and don't listen to these depression mongers. "Two of three elements necessary for finding a real "bottom" are in place, he said. Inventory is declining and prices appear to be stabilizing. Sales, however, are not rising. " douglas wrote on March 19, 2008 10:13 PM: hapless harry reid and captain nemo kennedy are the lads who have vowed to drive up energy costs. "big oil" as exxon, earns the smallest return on investment of any of the other 29 dow jones industrials. of course the whiners will energetically assail those 29 other corporations because they must be "ruining" the u.s. economy. that requires honor. as long as hapless harry reid and captain nemo kennedy continue to make the u.s. even more reliant on imported energy, the net cost to the consumer will continue to jump. what is amusing is that those who think that electric energy is too high, demand that the least expensive methods of generation should be curtailed. if hapless harry gets his way, electric bills should double. worse, if the federal tax surcharge twice proposed by captain nemo kennedy gets passed ["to discourage consumer use"], gasoline pump prices will further jump. the intellect of those who simply mouth party line hand outs is disappointing. Mark wrote on March 19, 2008 04:02 PM: Did overcharging for these houses as well as the greed from the banks loaning money to people that in no way could afford to pay it back have anything to do with all this. Me thinks GREED is the root of all this mess. David wrote on March 19, 2008 10:59 AM: I think stagflation is the term being tossed around. Rising prices with a decline in personal wealth via the stock market crash, falling real estate prices and lower interest rates for savings. Not the best scenario to be taking on huge debt by buying depressed properties. You may very well be buying something worth less down the line. With the job market unsettled, you are gambling with your financial stability. My advice is to stay put for awhile both on the employment scene and your considerations in buying a home for investment or personal living quarters. Common What wrote on March 19, 2008 10:50 AM: The six elements that "Common Sense" lists are present in Los Angeles, which has some of the highest home prices in U.S. Common Sense, you are in Las Vegas for a reason: it is a Sexy town, a growing town, and better than MOST in U.S. This Town gave you a Job! lol stable wrote on March 19, 2008 10:24 AM: Of course we are heading for a depression. I think a huge crash is going to happen. You cant be in a recession and have inflation going on at the same time. We will recover, but we are very overdue for another depression. I just hope it's not as bad as the 1930's. bt wrote on March 19, 2008 10:00 AM: ths, Your silver lining comment must have been for me! However I never said anything about borrowing or going into debt.The only big winners after the depression were the ones that owned the land. You know the outcome of those that were in the stock market,and our great president made all our money worthless buy making it illegal to own gold so everyone that had money in the banks lost also. I am not a realtor either!!! brent wrote on March 19, 2008 09:35 AM: Big oil is what is bringing this country down. Our government sits and does nothing. bt wrote on March 19, 2008 08:58 AM: ths, Somehow I think your silver lining comment was meant for me! However I never said borrow anything! BANKS and personal debt are half the problem and out of control oil prices are bankrupting this country. Our government sits and does nothing to stop it. WMD`s my butt, Oil theft by the US government and price gouging by the oil families is what is causing this depression. K. Hardgrove wrote on March 19, 2008 08:34 AM: Doesn't help that Pat Shalmy & the PUC have driven up power rates to steal our money and we are paying 3.20 for gas... Read All Comments