Price-slide slowdown signals housing bottom is near

Las Vegas home prices, in free fall for years, showed signs of hitting bottom in the first half of 2011, the Las Vegas-based housing research firm SalesTraq reported Tuesday.

The median price of a resale home in Las Vegas dropped to $106,000 in June, down 13.8 percent from a year ago, but down only $200 from May and $900 from April.

Existing-home sales skyrocketed to 5,564 in June, the most since August 2005, though 45 percent of those sales were of real estate-owned, or bank-owned homes, SalesTraq reported.

"Foreclosures have absolutely defined the Las Vegas housing market," SalesTraq President Larry Murphy said Tuesday.

Home prices have fallen more than 60 percent from their peak in 2006 -- the steepest drop of 27 percent coming in 2008 alone -- and are now at their lowest level since 1990. But the rate of decline slowed to 14 percent in 2009, 4 percent in 2010 and 1 percent so far this year, SalesTraq found.

Murphy also notes that the gap between the median price of a home in a conventional sale and one sold through a foreclosure auction has narrowed.

"The overall effect has been that we're all in the toilet together," Murphy said.

The new-home market is improving, however. Sales of new homes picked up to 362 in June, compared with 291 in May, though it pales in comparison to June 2010, when 972 new homes closed escrow to beat the deadline for the federal tax credit, which was later extended by Congress.

Median new-home prices increased 7.4 percent to $200,826 in June, Home Builders Research reported.

The sheer volume of the foreclosure mess can't be fixed in what would be considered a normal period of time, Home Builders Research President Dennis Smith said Tuesday.

Banks have improved the short-sale process in recent years, reducing the time it takes to approve a sale for less than the principal mortgage balance. That helps clear the inventory of foreclosed homes that have been a drag on the market.

A new law in Nevada requires banks to respond to a short-sale offer in 90 days and to state the exact amount of any deficiency judgment. Also, second-lien holders have only six months to file for a deficiency judgment instead of six years.

SalesTraq reported 904 short sales in June at a median price of $115,000; 671 auction sales at a median of $92,500; 2,503 real estate-owned sales at a median of $103,000; and 1,486 nondistressed sales at a median of $111,900.

Murphy said the housing market won't recover as long as there's a surplus inventory of foreclosure homes coming down the pipeline, and he doesn't see that changing for another two to three years.

"When you ask the question of where's the bottom, you've got to say we're getting close to it, but the fact is we've had five consecutive years of declining home values and we might have six," Murphy said. "But I've got to think we're going to bottom out and come back up to normal."

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

Trending topics:

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Comments

Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.

1. Worldsgreatest Jul. 27, 2011 | 5:44 a.m. Report Abuse

   "I'm giving up on saying how long it will take to get back." That's what another article just said by yet another RE expert. Shut up! None of you know what you're talking about. Recently, there was yet another article from some wise-a** government something or other that said, he didn't see it coming. Recently (last week) I spoke with a financial analyst living in Las Vegas, pretending he is doing fine who said Wall Street knew the mortgage-back securities would tank "some" but the money gained would be worth it but they didn't understand it would be so dramatic. Oops! As most people know, Wall Street and the government did know what would happen. They just weren't planning on people being sophisticated enough to walk away. The "guilt" trip doesn't work. Only a jerk would stay and pay when walking away is the sweeter, richer more lucrative deal. This country is loaded with houses with towns and cities that have jobs. And places that are aesthetically appealing, not like this ugly town. Las Vegas has always been about money. It is nothing more than a pit stop. Get real.

2. Roger Jul. 21, 2011 | 1:38 a.m. Report Abuse

   Well then let's get the machine rolling again....you know; builders throwing up a slew of new houses on miniscule lots, commissioners issuing permits as if they are going out of style, realtors selling based on the 'houses sell here in 1 day, you better make an offer now' tacticing, someone publish a report saying 6000 people per month are moving here again, all you LLC's out there start flipping houses again...even if it is to another one of your own LLC's under a slightly different name but at the exact same business address with a bogus appraised value of course, mortgage fraudsters get the doors open its business as usual....

3. tfg Jul. 20, 2011 | 3:32 p.m. Report Abuse

   The bottom again and again, just like a born again christian, again and again, good thing these guys arent stock brokers, everone that listen to their nonsense would be BUSTED.

4. ging Jul. 20, 2011 | 2:09 p.m. Report Abuse

   It will certainly hit bottom....after I am dead.

5. Mike.Henderson2 Jul. 20, 2011 | 12:27 p.m. Report Abuse

   If you read all the way to the end of the article, you will see "Murphy said the housing market won't recover as long as there's a surplus inventory of foreclosure homes coming down the pipeline, and he doesn't see that changing for another two to three years." I think that is right, we will hit bottom in 2 - 3 years. Or maybe in 4 or 5 years. But certainly sometime in the next 10 to 20 years!!!

6. michael commenting Jul. 20, 2011 | 12:26 p.m. Report Abuse

   sales traq and others have been touting this same message for 4 years and someday it will be true

7. GARY D Jul. 20, 2011 | 12:10 p.m. Report Abuse

   LV housing market, is just like an elevator -------------- we still have a ways to go to get to the basement. Analyst say, at least another 20% should get us there. ------------------------------------------------------------------ where's the "JOBS" Harry ????

8. Downturn Jul. 20, 2011 | 11:08 a.m. Report Abuse

   Another monthly bottom?
   
   Yawn...........................................................

9. DLH Jul. 20, 2011 | 9:45 a.m. Report Abuse

   Murphy's Mule Barn stick's out yet another sign saying the bottom is in? Obama, Reid, Pelosi sitting in the wings screaming yes we can, winning the future? Really!

10. Frank.Pelteson Jul. 20, 2011 | 9:04 a.m. Report Abuse

    Bottom line: No recovery will happen until we get government out of business and business out of government.

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