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Jun. 10, 2009
Copyright © Las Vegas Review-Journal

Home sales up, prices down

Inventory on the market reflects drop of 9.3 percent from May 2008

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL
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A home at 3971 Golden Prairie Court in Las Vegas is seen for sale on Tuesday. The inventory of homes for sale in May fell 9.3 percent from a year ago to 21,181 units, or a supply of about seven months.
Photo by Duane Prokop.





Home sales continued to post big numbers in May and the median price dipped 1.2 percent, or $1,720, from the previous month, the smallest decline since November 2007, the Greater Las Vegas Association of Realtors reported Tuesday.

The inventory of homes on the market, a major concern for local housing analysts, declined 9.3 percent from a year ago to 21,181, leaving supply at about seven months.

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    • Realtors sold 3,255 single-family homes during the month, a 60.7 percent increase from a year ago. The median price was $140,000, down 40.9 percent from May 2008.

    Counting 737 condo and townhouse units sold in May, Las Vegas had nearly 4,000 total sales, one of the best months on record, said Sue Naumann, president of the Realtors association.

    "So there's plenty of activity in our local housing market," she said. "We're down in inventory so we're starting to move things out of the market and I'm sure a great deal of it is REOs (real estate-owned)."

    Any further price deterioration will be caused by foreclosure properties, which account for about 80 percent of Las Vegas home sales, Naumann said.

    "We had a bank moratorium that expired June 1, but I still don't think they're going to flood the market," she said. "It would be devastating if they did."

    Real-estate owned inventory, or bank-owned homes, fell 29 percent from a year ago to 2,992, roughly one-fourth of the total single-family home inventory, David Brownell of Keller Williams Realty said. There were 3,092 REO closings and 6,029 pending sales, up 124 percent and 78 percent, respectively, from a year ago.

    For condos and townhomes, the median price was $65,000, down 53.4 percent from a year ago, but up 0.8 percent from the previous month. Inventory grew 2.3 percent to 5,572.

    Realtors took 4,211 new listings in May at an average price of $150,000, down 3.8 percent from the previous month and 36.2 percent from a year ago.

    Naumann said many homes are priced below what it would cost to build them today and people are recognizing opportunities to buy.

    "We're starting to see that maybe the market's going to rebound here. At least with sales it has," she said.

    Statistics are based on data collected from the Multiple Listing Service and does not necessarily account for new homes sold by builders, sales by owner and other transactions not involving a Realtor.

    Single-family listings that entered into a contract topped 10,000, indicating that closings should remain strong over the coming weeks, Frank Nason of Residential Resources said.

    One possible counter-trend to the increase in purchase contracts is volatility in the mortgage market, he said.

    Buyers who were waiting to lock in their loans when rates hit 4.5 percent are likely to be washed out of the mix as 30-year fixed mortgage rates skyrocketed to 5 percent last week.

    "If rates don't come back down quickly, many who did not lock their loans will be canceled out of the lender's system," Nason said.

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

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    well wrote on June 11, 2009 01:46 AM: What ever happened to the Red Rock Realty investigation? There was a story a week ago and no follow up.

    Is Barnhart going to jail or what?


    Unbuilt Lots wrote on June 10, 2009 07:12 PM: Prices of existing homes might drop some more, but the fact of the matter is that prices are already where they were in the late 90's. While the land value has decreased, the cost of materials and labor has increased significantly since then. The home builders have razor thin profit margins on new homes, and that's why many of them are not building right now.


    Only 10%? wrote on June 10, 2009 06:09 PM: @HR says-

    "While a home may not appreciate over the next 12-18 months, and prices may fall another 10%"

    I agree home prices may drop another 10%. But it is entirely possible it can go down another 30%, 40%, 50%,, or more.

    Some pundits say it can't drop that much due to fact it "costs more to build". I would ask the good people of Detroit if they believe that logic.

    Detroit Real Estate



    HR wrote on June 10, 2009 05:46 PM: Common Sense - Your advice is similar to what I tell buyers today. They need to plan on holding a home at least 3-5 years. And people need to understand that a home is just that -- a home. It is not an ATM.

    Too many homeowners took advantage of the price run-ups in 2005 and 2006 by taking out HELOCs to buy flat screens, new furniture, pools, cars, vacations, etc. Others ran up huge credit card balances. When the market adjusted, they were immediately under water.

    Markets are cyclical. They go up and they go down. Many homeowners, agents and lenders didn't understand this fundamental principle and got caught in the correction.

    The bank-owned inventory of the last 12 months has put huge downward pressure on pricing. Those prices also wiped out a lot of equity for responsible homeowners who have consistently paid their mortgages for years.

    While a home may not appreciate over the next 12-18 months, and prices may fall another 10%, there are still advantages to home ownership vs. renting. For those who plan to keep the home for 3-5 years minimum, they may not be buying at the exact bottom today, but I think they will see some appreciation over the long run.


    What a sh--hole wrote on June 10, 2009 05:27 PM: Take a look at all the "Breaking News" in today's online RJ and ask yourself-

    1- Do I want to continue to live in Vegas?
    2- Do I want to raise my kids in Vegas?
    3- Is this place a sh-thole, or what?


    Buyer101 wrote on June 10, 2009 05:21 PM: I have looked at distressed properties as an investment and in EVERY case found the associations basically out of business or their (much higher than affordable) dues unreasonable! If you buy a house at a deal, you still need a financially stable homeowner's assocation, which does not exist.


    Hi Again (-: wrote on June 10, 2009 05:17 PM: Yes,, it is your local neighborhood Bimbo Realtor, and her assistant, the lil blond bimbet!

    NOW IS A GREAT TIME TO BUY!!!! Remember, the “door bell” doesn’t ring at the bottom.

    BUY, BUY, BUY!!

    Ignore this fictious bad news about the 1.2%. Now is a great time to buy!


    BUY, BUY, BUY and I give you $25 Happy Time rebate at close of escrow!

    And about the 1.2% drop in price? This is just a minor problem. (Just like hurricane Katrina, other than the wind and the water, that was a minor thing also).

    Most of your story was good news (-: It is good to see people with b_alls of steel and try to catch that falling knife. It builds character.




    My Dumb Realtor wrote on June 10, 2009 05:15 PM: She told me and my old lady that we would get a big tax writeoff when I bought the house because of the $10,000 in interest and taxes being deductible.

    I talked to my tax man and he told me the real estate lady was a dopey blond broad! (Something about my standard deduction being higher and I get no benefit).

    Add to fact half the houses on my block are now in foreclosure, the plumbing is that defective Kitek leaking stuff, the rental two doors down is infested with gang types, and there is an old 73 Ford up on blocks and missing it's motor.

    This doesn't sound like the American dream to me. Should have stayed in my apartment.





    perry wrote on June 10, 2009 04:29 PM: these realtor association are full of sh**. banks and realtor are again manipulating the market do not believe these loan sharks


    dave wrote on June 10, 2009 03:55 PM: the dodger again, if they don't plan on staying for very long, they should not even consider buying a house today or next year. One thing we all should learn from this debacle is be prepared to stay in your home at least 5 years or more. If not, then don't buy.


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