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Las Vegas home prices continue to fall
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JESSICA EBELHAR/LAS VEGAS REVIEW-JOURNAL
Construction continues Wednesday on homes near Peace Way and Tropicana Boulevard. The median single-family home price in Las Vegas ended 2010 at $132,000, a decrease of 2.9 percent from $136,000 in December 2009, the Greater Las Vegas Association of Realtors reported. » Buy this photo
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From left, Rick Shelton, Paul Bell, John Restrepo and Lawrence Yun participate in a panel discussion Wednesday at the Greater Las Vegas Association of Realtors' office. JESSICA EBELHAR/LAS VEGAS REVIEW-JOURNAL » Buy this photo
LAS VEGAS REVIEW-JOURNAL
Las Vegas is a "wild card" when it comes to predicting where home prices are headed, a national economist said Wednesday.
As one of the nation's most undervalued housing markets, Las Vegas could potentially see a 15 percent increase in home prices over the next couple of years, said Lawrence Yun, chief economist of Washington, D.C.-based National Association of Realtors.
During a panel discussion at the Greater Las Vegas Association of Realtors office, Yun also said he would not be surprised to see prices fall another 15 percent as unemployment and foreclosure levels remain elevated.
"Comparing Las Vegas to the rest of the country ... Las Vegas is certainly different in many ways," Yun said. "Has the housing market bottomed out yet? That depends. If one looks at prices, nationwide there's been no change in two years. Las Vegas is the exception with declining prices. In terms of sales, it's very sluggish nationwide and Las Vegas has actually seen sales activity."
The median single-family home price in Las Vegas ended 2010 at $132,000, a decrease of 2.9 percent from $136,000 in December 2009, the Realtors association reported Wednesday.
Home sales slid to 3,117 in December, down 8.9 percent from the year-ago month, and finished the year at 43,877, the third-highest number on record.
Inventory climbed 9.9 percent to 21,656 available units in December, including 12,417 without pending or contingent offers.
The median price for 890 condos and townhomes sold in December was $62,000, down 5.1 percent from December 2009.
It was good to see home sales increase 12.2 percent from the previous month, Greater Las Vegas Association of Realtors President Paul Bell said. At the same time, he knows homeowners are disappointed to hear that prices continued to decline.
At least the 3 percent decrease is better than the 33 percent and 22 percent decreases in 2008 and 2009, respectively, Bell said.
Thirty-five percent of last year's sales were homes priced under $100,000, most of them purchased by investors to be renovated and returned to the rental housing market, the Realtor said.
"We will be keenly watching for price rebounds in master-planned communities that are closer to places where people work," he said.
Meanwhile, Yun said negative factors that could affect Las Vegas home prices this year include a high rate of mortgage delinquencies and consumer pessimism from continued price declines.
"That raises the question, 'Do I go into the market now or do I wait for even lower prices?' " he said.
On the positive side, the national economy appears to be improving with more than 1 million jobs created last year. The worst of the unemployment news is past, the stock market has gained ground and large companies are "flush with cash," Yun said.
Another positive for Las Vegas is population growth, maybe not in the last few years, but over the last 10 years, he said.
"You've got retirees, baby boomers ... you see a vacant home in Cleveland and a vacant home in Vegas, believe me, the vacant home in Vegas will go," Yun said.
Las Vegas economic consultant John Restrepo said the secret to home price appreciation is "jobs, jobs, jobs." The local economy seems to be stabilizing because we're losing fewer jobs, only 2,000 a month in 2010 compared with 12,000 to 15,000 a month in 2009, he said.
"So things have gotten better. The patient is out of ICU, but not out of the hospital," Restrepo said. "We're not recovering all the jobs we lost, but it's getting better. The price of homes is down 3 percent. That's not bad compared to 2009. At least we see some light at the end of the tunnel, which is good news compared to last year. It was pretty depressing."
Foreclosures slowed to about 20,000 in Las Vegas in 2010, down from 24,000 in the previous year, as the "robo-signing" scandal led to a lender-imposed moratorium on foreclosures toward the end of the year.
That's just a temporary stoppage and will not be an issue going forward, Yun said. The fundamental reason foreclosures rose to begin with is mortgage delinquency, and those foreclosures are already in the pipeline, he said.
If buyers are hesitant and foreclosed homes linger on the market, prices will drop. If buyers absorb the foreclosure inventory quickly, prices will stabilize or get bumped up, the economist said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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using the "I gambled and I lost, I want money back" mentality, would you have liked it if the banks would have taken your house away when it appreciated 70% in 3 yrs. Good luck buying another one. how about everyone who took all that easy money out of their house and bought a boat or RV? maybe you wouldnt have been so upside down if you wouldnt have done that.
The vast majority of these homes were bought by A. speculators who expected to turn a mighty profit as the Vegas economy BOOMED over the years, and B. people who had such shoddy credit that nobody would give them a loan.... except, if.... the Federal government would guarantee them! Too bad, so sad. You gambled, you lost. Except in this case, it is the taxpayer who is getting hosed. Thanks Harry.
I always find it interesting to read that people are vilified who don't pay on their mortgage because they are reneging on their contract...when someone has a choice to pay on a 520K debt when the underlying asset is worth about $225K today, and there is a choice to feed your family, pay health insurance, pay for kid's college, etc, and there is no paycheck coming in, and withdrawals from the 401K to pay for everything is subject to income tax plus penalties, AND the contract terms are being carried out when the bank forecloses....the defaulting borrower is subject to the terms and conditions of the contract (Note and Deed of Trust). The property is lost to the lender as a result of the contract terms, because the borrower is simply trying take care of its family. The terms of the contract are being fulfilled, under the conditions that allow those terms to be implemented. The Note and Deed of Trust remedies were agreed to in advance by the borrower and the borrower has a right to not pay as the contract dictates the terms and conditions of what happens in that circumstance...thus the contract is being fulfilled!!!
@knowitall...the only bad decision I made was to read your drivel and try to make a case for lenders' criminal activity. I've paid my bills, have no debt but my mortgage, was unemployed for 17 months and didn't ask anyone for anything. I still live in the house, will continue to do so and don't have any kind of entitlement attitude. As a taxpayer we gave lenders a ton of money to mitigate the circumstances caused by reckless behavior on their part. The gov't (taxpayers) bailed them out without putting any system in place to force them to do what they all said they'd do with the money. I only wanted to refinance my mortgage at a better interest rate and could have done that easily if that reckless lending didn't falsely devalue my home. As I said earlier, I had equity in my home and would have been able to refinance if the lenders and the liberals didn't believe that everyone in this country 'deserves' to own a home and loan money they knew could never be repaid. With a little luck you'll experience watching your life savings evaporate due to nothing that you did wrong. By the way, my parents (I'm 51) said I should do what I consider the irresponsible thing to do, quit paying and just walk away. Like all those folks that couldn't afford their home in the first place. So bite me....
On the opposite end of the spectrum, here are the five states where the housing recovery will be a lot longer in the making:
From Marketwatch today..................1. Nevada
The poster child for the housing boom was Las Vegas but now it’s lights out on Glitter Gulch. The state has the highest mortgage delinquency rate in the country at 8.3%, the highest unemployment rate at 14.4% and has suffered the biggest peak-trough home-price declines of any area, a 56.4% tumble.
I do not work for a bank or financial institution. I'm a 32 year adult who doesn't blame others for my bad decisions. Who cares what countrywide did. You asked them for a loan to purchase a home and they gave it to you. Acting like a child and blaming others doesn't change the fact that they are not required to do anything to help you stay in a home you can't afford. Is there anyone in this country anymore that takes responsibility for their actions. What would your parrents say about your entitlement mentality?
knowitall- google "Countrywide fraud". Countrywide, one of the largest players in the toxic-mortage scam, is no longer around. Its CEO later faced (and may still be facing) various charges. It has paid Billions to many States (including Nevada) though legal action (AGs) based on the damage caused. This is just one of the players. BOA bought Countrywide. This toxic-mortgage scam has hurt many "good" borrowers like GladtoLive and myself, and has also hurt corporate investors like Allstate. I only have sympathy for the good, innocent people out there, not the scam artists (on lender or borrower side).
@knowitall... a little defensive, no? What bank or financial institution employs you?
Guru-how did and what is this toxic system that banks have created? I'm not sure what point your making here is.
Guru,
Thanks for the advice. I'll give it a try. Maybe my venom is mis-directed toward the banks, but they make themselves such an easy target. I did actually find out through sheer coincidence that my loan is held by Fannie Mae when I went to a foreclosure workshop at the Palace Station back in September. To this day I've never received a scrap of paper from Fannie Mae...One thing is for sure, they haven't heard the last from me. I don't like getting ripped off, no matter who is to blame. And @knowitall, you don't. I understood my mortgage and terms very well. What I may have missed is the lenders eagerness to provide loans to people they knew could never pay them back which started this ball rolling...