New homes back in play for Las Vegas buyers - Business

PRINT THIS Popular

Sep. 17, 2009
Copyright © Las Vegas Review-Journal

New homes back in play for Las Vegas buyers

Sales up as prices competitive with foreclosures

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Housing in Southern Nevada

While foreclosure sales continue to drag the median existing home price down in Las Vegas, the new home market is starting to show progress, housing analyst Dennis Smith of Home Builders Research said Wednesday.

The median resale price dropped $3,000 in August to $122,000 and is down 39 percent from a year ago, Home Builders Research reported.

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

Expect to pay at Nugget's new tower

THE STRIP: License approved for Aria

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

Union wants insiders to help pull Station from bankruptcy

Foreclosure wave continues

INSIDE GAMING: Missouri outburst hurts Lee, Pinnacle

Sales of existing homes declined to 3,833 closings in August from 4,371 in July. Resales for the year are up 52 percent at 28,468 units.

Smith said he's hearing that Realtors still have interested buyers and investors looking at real estate-owned, or bank-owned properties. However, good homes are difficult to find and they continue to have multiple offers written on them, he said.

That's driving some buyers to look at new homes, many of which offer floor plans under $100 a square foot, competitive with foreclosures.

"After looking at foreclosures, Realtors will take their clients to view the possibilities in the new home segment," Smith said. "It is usually a much easier escrow, less stressful than going through foreclosed houses and, in certain instances, they get a higher commission."

Home Builders Research reported 426 new-home sales in August, compared with 407 sales in the previous month. New-home sales have decreased 57 percent to 3,167 for the year.

The median price of a new home rose for the third straight month to $210,00. It's up $3,451, or 1.7 percent, from July, and down $46,000, or 18 percent, from a year ago.

Smith said the new home segment is moving forward, albeit very slowly.

"Forward, meaning stabilizing," he said. "To most in the industry, or those who used to be in it, it couldn't be much worse. Our read from home builders is they feel stuck in a vacuum and can't find a way out."

Homebuilders have cut overhead more than anyone thought was possible, Smith said. He knows people who were let go after 20 years or more working for homebuilders, contractors, title companies and mortgage lenders.

Larry Murphy, president of Las Vegas-based SalesTraq, said the summer sales rush is coming to an end, and he wouldn't be surprised to see prices come down another $2,500 to $3,000.

"We seem to have a steady supply of repos coming on the market every month," Murphy said. "I said earlier this year we could hit $100,000 (median price) and we're not that far away."

The housing market in California is also stabilizing, according to a September survey of 269 home building executives by John Burns Real Estate Consulting. That's usually a good sign for Nevada.

"For the first time since we began our home builder executive survey 15 months ago, more California builders reported raising prices than those who reported prices were flat or down," said Jody Kahn, vice president of Irvine, Calif.-based John Burns Real Estate Consulting.

The survey's commentary underscores the positive effect of federal intervention, though most builders also expressed concern about their prospects for the next six months as the Nov. 30 expiration of the federal tax credit approaches.

Other challenges cited include competition from foreclosures, appraisal problems, lack of job creation and a void in financing for future projects.

Robyn Yates, broker and owner of Windermere Prestige Properties in Henderson, said Fannie Mae loans are getting more difficult for approval. Tougher underwriting guidelines are geared to prevent mortgage fraud, she said.

"It's just more of the same restrictions and making sure people really qualify," Yates said. "It's one more indication that it's going to be challenging for buyers to get a loan."

The biggest change for Las Vegas homebuyers is verification and documentation of tip income, she said. Also, stock options can no longer be counted for reserves and relocating families can't use the "trailing" spouse's projected income.

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

Share & Save

Leave Your Comment	11 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. Valley Resident wrote on September 22, 2009 06:13 AM: "Until the TENS OF THOUSANDS who've been laid off go back to work" ______________________________ Actually it will be when they have left the state. A majority are construction workers who worked on hotels etc that were built on debt. Since we will not see a construction boom again here for a very very long time, after their unemployment runs out, those workers will leave the state for work elsewhere. As far as investor consultant goes, he is right on the button....GENERALLY. Of course there are variables to that. Do not look to get a .25 acre 2400 sq foot high end home with a valley strip from from Summerlin or Anthem for $170,000 not even a foreclosure. The bottom line is that the value of the house is what the market is willing to pay and some houses in certain areas sell for $150 sq ft and others $70. investor consultant wrote on September 17, 2009 04:22 PM: I don't know where you get your information from. That is the former problem with Las vegas. The value of real estate in Las Vegas by pro investors is valued at $35.00 per sq ft+ property footage at $10.00 per sq. ft. Now you amateurs have something to work with. whoha wrote on September 17, 2009 01:46 PM: Until the TENS OF THOUSANDS who've been laid off go back to work, unemployment numbers are back near 5%, after the flights increase to fill the glut of rooms, the price of gas IS NOT near record highs (to stop SoCal drivers from comin' up) and all of the forclosures stop, AND then when the dust settles, can you say we're even close to being back on track to a normal housing climate. It's gonna take years for all of that to happen! They arrested some guy in Denver today with ties to Al Qaida and some sort of bombing plot. God help this town if the terrorism starts again in this country because we'll be back where we started from. Air travel will be safe, but suicide bombers? It's not a matter of if, but when! NEVER forget Sept. 11, 2001. If we forget the past (most Americans have short memories) we may be forced to repeat it! B wrote on September 17, 2009 10:34 AM: Wimps! jimbojones wrote on September 17, 2009 10:04 AM: Wow, another cheerleading report from Hubble Smith. I would be in shock if I ever read a thruth about how bad Vegas real estate really is in one of his stories. At least he didn't tell us we've reached the bottom for the umpteenth time. Pat wrote on September 17, 2009 09:36 AM: I would be afraid to purchase a new home unless it was one of the last ones being built within a development. I could imagine being surrounded by a unsold new homes that go into foreclosure against the builder. Then the neighborhood would very quickly deteriorate. Reality wrote on September 17, 2009 09:24 AM: "That's driving some buyers to look at new homes, many of which offer floor plans under $100 a square foot, competitive with foreclosures." What that really means is the absolute cheapest & poorest quality materials AND workmanship! And on just enough land to get your BBQ in the backyard...but no swing set...the poor kids will be hitting the wall. The ultimate is the custom homes on custom land...build your own! Top Cat wrote on September 17, 2009 08:42 AM: Time to build your new green energy custom home. We finally have an administration that has a clue about the future. So take advantage of cheaper cost to build and all the government solar-wind power incentives available for the private home builders. Yes, there are more homes going into foreclosure and flooding the market with cheap homes, that's all they were to begin with. Las Vegas also has homes that will Never fall prey to market fluctuation. wettap wrote on September 17, 2009 08:35 AM: http://www.businessinsider.com/the-final-demise-of-a-speculative-housing-bubble-2009-9 Time to get in! zippy wrote on September 17, 2009 07:26 AM: Ya think? No, No, we wouldnt do that to ourselves again.... Read All Comments