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Home sales up; prices down from 2010
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Jeff Scheid/Las Vegas Review-Journal
Construction crews work on a home Tuesday in Amado Ridge, a community by Richmond American Homes on Oak Bend Drive. Research firm Home Builders Research counted 381 local new-home sales in August, a 20.6 percent increase from 316 in July. » Buy this photo
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LAS VEGAS REVIEW-JOURNAL
Sales of both new and existing homes in Las Vegas increased in August compared with July, a housing research firm reported Friday. Prices, though, remained flat compared with July and fell from a year ago.
Home Builders Research counted 381 new-home sales in August, compared with 316 in July. In August 2010, there were 401 new-home sales.
For the year, new-home sales are down 38 percent at 2,383 and on pace for about 3,600 in 2011, the lowest total since the firm began tracking the market in 1988.
The median price for a new home was $198,605, almost unchanged from July and a 9.7 percent decrease from a year ago.
There were 15 high-rise condominium closings during the month, including 13 at Allure on Sahara Avenue near the Strip. The condo tower has sold 61 units this year at an average price of $260,000.
Home Builders Research reported 4,938 existing-home sales in August, the largest monthly total since summer 2005. Resales have surged 10 percent through August with 31,547 recorded transactions.
"I think we'll probably see big numbers on resales for the rest of the year," Home Builders Research President Dennis Smith, president said. "It'll be interesting to see what happens with banks releasing foreclosures. I know some investors that are wanting to buy more foreclosures."
Smith said he's amazed at the sheer amount of resale activity. If the numbers hold up, he's looking at 47,300 resale transactions this year, which would beat last year's total of 42,673. Resales peaked at 64,168 in 2004, Home Builders Research said.
The median resale price slipped to $107,000 in August, a loss of $15,000, or 12 percent, from the same month year ago. They're down $8,000 from the beginning of the year.
"It's impossible at this point in time to pinpoint when resale prices will begin to rise at a steady pace in Las Vegas," Smith said. "There are too many distressed properties and troubled homeowners that are not being counted. Should an underwater mortgage be viewed as a distressed property?"
CoreLogic, a Santa Ana, Calif., real estate research firm, shows 60 percent of Las Vegas homeowners with a mortgage are "underwater," owing more on their mortgage than their home is worth. The next-highest state is Arizona at 49 percent.
Home Builders Research sorted through 338 new home permits in August, bringing the year-to-date total to 2,649, a 25.8 percent decrease from a year ago.
Most builders are still cutting prices trying to find that "sweet spot" in positioning their products, Smith said. They have to compete with the excess supply of existing homes and also contend with other builders, yet allow for profit margins. That's a very narrow line to navigate, he said.
Larger banks such as Bank of America are getting better at approving short sales and loan modifications and appear more willing to negotiate settlements than smaller banks, Smith said.
"I'm encouraged that banks are starting to move on these properties," he said. "There's enough demand from investors and people wanting to buy foreclosures. It should not be an issue and should not drive down prices."
Smith said he's seeing more being written about affordable housing in Las Vegas. Research analysts from around the country are touting indexes that show Las Vegas as one of the nation's most affordable housing markets.
"If that's a surprise to anyone, they've been under a rock for some time," Smith said. "The affordability of homes in Southern Nevada will indeed eventually help stimulate the housing market. But, the number of distressed properties has to recede before we can legitimately suggest a growth period is imminent."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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First of all the "number" of units sold is irrelevant. If you lower the price and are selling at a loss, of course the unit number should go up. ie...Ask a business that has a "Going out of Business" sale. Their last month in business their unit sales amount increased from the previous month, because they sold units at a LOSS. haha Get it!!! Wake up! However, to stay in business you actually have to make a PROFIT.
In real estate, the more unit sales you have at a lower price actually hurts because it "confirms" that ALL of the surrounding homes are now worth less...it's called comparable sales.
China investors buying up neighborhoods and turining them into rentals for Section 8. Obama's ever increasing voter base. Sounds like a social engineering experiment to me.
The high-rise condo sales are interesting. You cannot get a bank loan for these condos, so they are all cash. Who is walking into Vegas with $260,000 in their pocket? But heck I am glad someone is buying them. Hopefully by 2013, the market may stablize. Ten years from now we may look back and say, "I with I would have bought in 2011."
This is a supply and demand problem that will be remedied when developers stop building new homes. There is a huge backlog of homes on the market with not enough buyers out there to scoop them up.
i came to Vegas to make $$$, I did. I got out with some of what I made-I was lucky, I did plan for a decline in values but not a total crash. Vegas was good to me, I miss the Vegas I moved to more than the $$$ I lost, I lost my town-thats what really bothers me.
Dont forget Bank of America scooped up all the Countrywide liar loans and are sitting on a ton of homes, they cant sell off. If they do then the prices would drop another 50%, so to shore up the perceived value of the Countrywide asset Bank of America owns. Same as Bill gates, if he sold off all his Microsoft stock the last shares would be worth pennys. Same thing here we have a false bottom. Google articles on Bank of America today there was lots of them talking about the Countrywide problem thats dragging BofA into the ground. Someday when that portfolio shakes out houses in Vegas will be $30/sqft or some real low number, i'm just guessing. What I do know is we have a false bottom rite now. glad I left...I paid off one mortgage I was upside down on just to protect my credit score. I spent several hundred thousand $$ to protect my credit score. Most aren't so lucky
fun to watch people slowly figure out who the blackhats are in the housing/econ crash. yes. banks are sitting on millions of foreclosures, people are staying in homes they make no payments on. the entire system is upside down. banks are not making home loans while the Fed split offers banks a way to make money borrowing from the Fed at .5% and buying treasury debt for 1.5% and pocketing the split. and while jobs are being wiped out, there are no customers anyway. its a perfect storm.
Investors/Speculators are buying up anything they consider a good deal. This is creating a rental property bubble. The rental inventory in the MLS is skyrocketing and rental prices are coming down. Based on what I am seeing rental rates are going to drop like a rock over the next 2 years.
The San Franciso Fed says the percentage underwater is closer to 80%, not 60%.
That and all of the foreclosures that are still pending. Everyone is waiting for the foreclosures which is holding the market down. Once the banking/mortgage mess gets more or less resolved with the states and feds, then they will start getting those homes on the market. Then we might see home prices rise once those homes start selling. And yes, there are people buying homes for cash and there are ones that can't qualify for a loan. But these people probably couldn't qualify for one in the 80's either. But if you just had a foreclosure, you are going to be renting for a while anyway.