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Jun. 25, 2009
Copyright © Las Vegas Review-Journal

Local existing-home sales surge during May

Month's total up 42.5 percent from year earlier

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL
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Sales of existing homes increased for the fourth straight month in May and signs of a price bottom are starting to appear, Las Vegas housing analyst Dennis Smith said Wednesday.

"It could be. Let's get through the summer before we say anything," the president of Home Builders Research said. "It's hard to predict or analyze how to get through the new inventory you hear about of 20,000 foreclosures that haven't hit the market yet."

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    • Home Builders Research reported 3,714 resales in May, a 42.5 percent increase from the same month a year ago and up from 3,652 in April.

    For the first time in more than a year, the median price was unchanged from the previous month at $130,000. It's still down 43.5 percent, or about $100,000, from a year ago.

    Total resales for the year are up 61 percent to 15,728, an amazing statistic considering all the negative reports bombarding the public almost daily, Smith said.

    "Even if the majority of the sales are to investors, we are still selling a lot of inventory," he said. "During this difficult economic climate, it certainly appears there will be a consistent supply of folks looking for homes to rent."

    New-home sales also rose in May, to 378 recorded closings, compared with 343 in April. They fell 59 percent from 921 in May 2008.

    Smith said he doesn't expect to see the number of traditional, single-family new-home sales increase much this year.

    The median price of a new home fell to $212,990 in May, down 23.5 percent, or $65,255, from a year ago. The price has fallen from its peak of $350,615 in early 2006.

    Smith counted 308 new home permits in May, bringing the total for the year to 897, a 51 percent decrease from a year ago.

    The number of homes for sale on the Multiple Listing Service dipped to 21,181 in May, but it's going up again when bank-owned properties that haven't been listed yet come on the market, Smith said.

    "They're going to release them a little at a time, we hope," he said. "You may see the number of new listings start to increase. Once we get through the summer, we'll know where we're at in inventory."

    Las Vegas-based SalesTraq reported 383 new-home sales in May, a 56 percent decrease from a year ago. Existing-home closings increased 66 percent to 4,476, though 64 percent of those sales were bank-owned homes, the research firm reported.

    Those homes had a median closing price of $106,000, while homes that were not bank-owned had a median closing price of $140,000. The overall median was $122,000, down 45.8 percent from a year ago.

    While President Barack Obama and Congress debate financial regulatory reform, foreclosures continue to mount as embattled housing markets bump along the bottom, said Alexis McGee, president of Sacramento, Calif.-based Foreclosures.com.

    Still, some parts of the country are rebounding. Foreclosures are declining, while home sales and average sale prices are increasing, she said.

    "We're in a slow, but definite recovery mode," McGee said. "While foreclosures persist and unemployment still worsens, there are positives in the market that give a strong indication that housing markets have bottomed."

    In Southern California, home sales rose for the 11th consecutive month in May. A shift toward sales of mid- to high-end homes drove the median price to $249,000, the first increase since July 2007, San Diego-based MDA DataQuick reported.

    The company reported that 20,775 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was the most since May 2006.

    Smith said homes sales over the summer will depend on how readily financing is available for prospective buyers.

    "That's my point," he said. "I've been saying from the beginning that we're in the hands of the banks."

    A report from Nevada Title Co. showed 3,277 single-family home sales in May at an average price of $205,213, or $95 a square foot, down 35 percent from a year ago. The average home size was 2,030 square feet.

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

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    guru wrote on June 26, 2009 12:25 AM: "We're in the hands of banks", Smith says. I would probably agree.

    Note, banks are essentially other people, investors. Who will you LEND to for your retirement? You will want protection (equity).


    NAACP wrote on June 25, 2009 11:33 PM: I blame it on minorities. And who is the new Supreme Court Judge who hates white people?

    Wait, are not whites the minority now?


    rb wrote on June 25, 2009 08:23 PM: Go bubble go bubble go bubble....man I am glad I left :)

    had fun but not that much fun!


    Joshua wrote on June 25, 2009 04:46 PM: In the Nov 8,2008 edition of the RJ, Dennis Smith said, "If you're looking for a better deal in 2009 than you can find today, I don't think that's going to happen". According to Zillow today, "Homes bought in 2007 had the highest percentage of homeowners underwater at 82.7 percent. Eighty percent of the homes bought in 2005 are underwater. That lessened to 65.4 percent for homes bought in 2008. In a reflection of falling prices, 22.6 percent of the homes bought in 2009 are underwater.". Let's see, the majority of homes bought upon Smith's advice in 2008 are underwater, along with a significant percentage of those bought this year. Those of us who listened to Mr. Smith and the RJ may have clearly been damaged by this advice. Do we have a case, especially in light of the fact that the RJ continues to quote this guy, notwithstanding the significant deterioration of our home values. Help me out here. Can you trust Smith or the RJ when it comes to the Las Vegas Housing market?


    Robert wrote on June 25, 2009 01:22 PM: I understand the frustration and rejection of Pollyannas, but reality is that it is bad but not as bad as the naysayers would lead you to believe. The Bears will tell you that the bottom was here 6-12 months after the rebound. There will be a rebound. It will not be hyperbolic. It will not be vertical but it will rebound.

    To respond to your question Steve, investors are buying based upon calculated risk, which is what any attempt at home/stock/commodity ownership is.


    The End wrote on June 25, 2009 12:36 PM: Who in their right mind would buy one of these chicken-wire with spray-on concrete pieces of junk? Not to mention the fact that this dump is emptying out, fast. When they start paying people to live in homes here you'll know the market is nearing a bottom, until then, stay away if you value your money.

    Wait till this is over, Detroit will seem like a wet dream compared to this sh*@-hole town.


    Back to packing, only two more days to go!!!!!!!!!


    Stuck Pig wrote on June 25, 2009 11:17 AM: Roger, I bought a little over a year ago, well after the bust began, for $185K. An identical house (that was trashed pretty good) just went for $119K. Other comparables are about $135K. Heavy sigh. I'm gonna be there a while.
    Not paying the mortgage is tempting. I could probably live there free for nine months to a year before they actually kicked me out.


    roger wrote on June 25, 2009 09:09 AM: common sense.. to add to your comments I would like to see also a forecast as to what in store for those who made purchases during the boom years and now face paying for an overpriced asset, while also seeing their investment portfolios losing 40% value at the same time. In other words the net worth of these people has been decimated, how will they retire? or even recover? The purcashing power and quality of life for these people has taken a huge step backwards, and in most instances these are quality borrowers who will get no relief whatsoever. Once again another example of being responsible doesnt pay off, just think 1 mistake, buying a house at the wrong time is literally strangling people's futures.


    AAA wrote on June 25, 2009 08:54 AM: Good luck qualifying for a loan...


    steph wrote on June 25, 2009 08:02 AM: It's a tough market to call, but if I can buy a house in a marginally good neighborhood for 600 a month, it's a good investment.

    Wish I had the cash.


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