Las Vegas home prices continue to slide - Business

PRINT THIS Popular

May. 21, 2009
Copyright © Las Vegas Review-Journal

Las Vegas home prices continue to slide

Foreclosures drag resale median to 1998 level

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Housing in Southern Nevada

Las Vegas homes are seen March 18 from the M Resort blimp. Valley home values are expected to decline further before any upswing.
Photo by Duane Prokop.

Housing analyst Larry Murphy was hoping he was wrong when he said median existing home prices in Las Vegas could slide to $100,000 by year's end.

If prices continue to fall by nearly $10,000 a month as they did in April, they'll be there by the end of summer.

Most Popular Stories

Fraud with Portent

Debt-ridden casino operators told to expect pressure

REAL ESTATE: Las Vegas home prices stabilize as threat of foreclosure flood wanes

GAMING COMPANY EARNINGS: Station drops $455.4 million

THE STRIP: License approved for Aria

GLOBAL GAMING EXPO: Recession over? Don't bet on it

Expect to pay at Nugget's new tower

Union wants insiders to help pull Station from bankruptcy

Foreclosure wave continues

INSIDE GAMING: Missouri outburst hurts Lee, Pinnacle

"I still don't think that'll happen," Murphy said Wednesday. "This is the second month that we saw more (bank-owned) dispositions than acquisitions. If this happens once more in May, I'm going to declare a trend. I'm going to say the end is in sight."

The median resale price dropped to $125,000 in April, down 45.3 percent from a year ago and the lowest level since 1998, the president of Las Vegas-based SalesTraq reported. It's 55 percent off the peak of $275,000 in February 2007.

Foreclosures, which accounted for 62 percent of April home sales, dragged the price down. Their median was $115,000, compared with a median of $145,000 for homes not owned by banks.

SalesTraq showed 2,521 dispositions, or sales of bank-owned homes, nearly twice the 1,289 acquisitions, leaving the foreclosure inventory at 14,722 in April.

New-home prices also fell, but not as sharply. Their median of $216,581 is down 26.6 percent from a year ago, but less than $2,500 lower than the previous month.

Home Builders Research reported 3,652 existing-home sales in April, a 62.5 percent increase from a year ago. New-home sales remained sluggish at 343 during the month, down 54.2 percent.

For the year to date, resale transactions are up 69 percent at 12,014 and could end up close to 40,000 by year-end, said Dennis Smith, president of Home Builders Research.

"The Las Vegas housing market is showing some signals that it is closer to the bottom than many other housing markets around the country," he said. "Now, if the job situation improves, we would really have something. Watch the job numbers. As always, they are the key to recovery."

There were 346 new-home permits issued in April, bringing the year-to-date total to 897, down 51 percent from a year ago, according to Home Builders Research.

Smith wouldn't say the new-home market is "out of the woods," but the first step to recovery is for the market to stop going down, which he thinks it has. Net sales per subdivision have improved for homebuilders, he said.

Robin Camacho of American Realty & Property Management said homes are selling in Las Vegas at bargain basement prices, including older fourplexes available for less than $28,000 a unit.

She's got two new homes on the east side for $79,990 each.

"This is the lowest price I've seen on a new home," she said. "I sold an older home -- a foreclosure -- with a pool, in need of rehabbing, in February for $32,000. I think some of the best values are hidden gems. For whatever reason, investors tend to flock to Summerlin, Green Valley and the southwest. They all tell me it's about location, location, location. I tell my investors it's about price, price, price. There are some incredible deals on homes that will cash-flow in areas investors tend to overlook."

Home values in Las Vegas will continue to fall, especially in the luxury market, broker Tom Love of Realty Executives said.

"It's simple economics," he said. "The supply of homes in Las Vegas far exceeds the demand for them. However, I feel that homes under $300,000 have less room for decline because their prices are already below building costs."

He anticipates a drastic increase in foreclosure inventory following the moratorium. The pipeline of homes in foreclosure is "busting at the seams," Love said.

SalesTraq's Murphy said there are two lines of thought on that. One is that lifting the moratorium will bring a new wave of foreclosures; the other is that President Obama's $350 billion housing rescue program is gaining traction.

"Who knows what's going to happen," Murphy said. "It's just phenomenal to see these prices of 1998. Take yourself back 11 years. I wish I could do that with my age."

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

Share & Save

Leave Your Comment	23 Reader Comments
Terms & Conditions The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor. Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once.
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: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. perry wrote on May 22, 2009 08:43 PM: sorry murphy u just like hubble smith housing hasn't hit bottom Sage wrote on May 22, 2009 05:06 AM: Guru, I was only responding to the comment that the banks are sitting on a ticking time bomb. I should clarify to say that the money is available to low and moderate income; up to 120% AMI. And I would hardly call low income households the least productive in society. My organization has provided down payment assistance to a number of families, none of which have gone into foreclosure. With mandatory homebuyer counseling, these people probably know more about predatory lending, household budgets, ect. then many of your so-called productive memebers of society. guru wrote on May 21, 2009 08:46 PM: Sage- regarding the money GIVE AWAY: "mo money" going to the least productive in society (trickle up lol)? Free Money should ONLY go to those who LOST MONEY in real estate by conservative loans (e.g., 70% LTV) though downpayment money or initial equity. This will lessen foreclosures, and thereby stablize neighborhoods. Not helping people who LOST MONEY, will cause more foreclosures. But Government decided not to help those who lost real money. Sage wrote on May 21, 2009 08:11 PM: Millions of dollars are being pumped into targeted areas via the Neighborhood Stabilization Program. Las Vegas has 20+ million dollars to buy and/or assist low income homebuyers to aquire foreclosed properties. The banks know this money is coming and is patiently waiting for it. guru wrote on May 21, 2009 07:53 PM: Bank Owned- here is the flaw in your analasis: Detriot = not sexy Vegas = Sexy! That is why you are here and not Detroit. That is why prices will not go to Detroit level. Does anyone disagree? I am so Sexy! ps: people also love sunshine. Bank Owned wrote on May 21, 2009 05:49 PM: There are thousands and thousands of homes that have been forclosed on and where owners moved out over a year ago, yet they aren't even avilable for sale yet. The banks are sitting on a ticking time bomb for Vegas. Maybe the RJ can do a story on this topic,, how many, how long, and why. Detroit wrote on May 21, 2009 05:46 PM: No joke,, look at Detroit. There are those that think Vegas will get close to Detroit in prices due to it's one industry town [Detroit=Cars and Vegas=Gambling] (Thanks Harry Reid) Detroit Real Estate jk wrote on May 21, 2009 03:33 PM: To Sulla: Actually you are wrong, a house at $ 15,000 still has room to drop, i.e. up to a $ 15,000 drop no less. For a glimpse of where Vegas is heading go to realtor.com and look up Detroit, $ 5 house for sale, multiple $ 75 homes, and too many too count under $ 1000. Just to give you a glimpse of what a busted boom-town looks like. Sulla wrote on May 21, 2009 02:37 PM: Inflation and devalued currency is exactly the sign of a good purchase. If the FED flooding the market with cash and Obama's spending actually causes a serious depreciation of the dollar, that depreciation will cut into the balance due on your mortgage. Some of these houses are cheaper than the land even used to be. I saw one the other day for $15,000. I don't think we're even close to being out of the woods. But stuff at that price can't go lower. Joe Bama wrote on May 21, 2009 11:53 AM: Guru's predictions are more believable than GLVAR's Read All Comments