Report: Las Vegas hits new post-peak housing low

WASHINGTON -- Residential real estate prices dropped more than forecast during the year ended Sept. 30, showing the industry at the center of the 2008 financial crisis continues to struggle.

The S&P/Case-Shiller index of property values in 20 cities dropped 3.6 percent in September from the same month in 2010 after decreasing 3.8 percent in the year ended August, the group reported Tuesday in New York. The median forecast of 32 economists in a Bloomberg News survey had projected a 3 percent decrease.

Atlanta, Las Vegas and Phoenix posted new post-peak lows in September, the report showed.

Las Vegas-based housing research firm SalesTraq reported a median existing-home price of $104,900 in September, a decrease of 10.9 percent from the same month a year ago. It was up from $103,500 in August. The median price remain unchanged in October.

"Yes, prices could continue to decline next year, but not by much, probably less than 5 (percent) to 10 percent," SalesTraq President Larry Murphy said. "Savvy investors will continue to buy Las Vegas real estate because they realize that our market is currently overcorrected and undervalued."

Unemployment at 9 percent, tight lending standards and a looming supply of distressed properties that may drag down home values further will probably keep hurting housing demand into next year. Sliding prices have left some people with loans that exceed the value of their properties, preventing them from boosting spending on other goods and services.

"We continue to expect home prices to fall through mid-2012," said Anika Khan, an economist at Wells Fargo Securities in Charlotte, N.C. "We still have an oversupply of existing homes, and distressed transactions continue to drive down home prices."

Estimates in the Bloomberg News survey for the price change ranged from declines of 2.7 percent to 3.9 percent. The Case-Shiller index is based on a three-month average, which means the September data were influenced by transactions in July and August.

The year-over-year decline in September was the smallest in seven months.

Home prices adjusted for seasonal variations fell 0.6 percent in September from the prior month, the biggest decrease since March, after falling 0.3 percent in August. Unadjusted prices also decreased 0.6 percent from August as 17 of 20 cities showed declines. Only Washington, New York and Portland, Ore., showed gains.

The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.

Eighteen of the 20 cities in the index showed a year-over-year decline, led by a 9.8 percent drop in Atlanta.

Detroit showed the biggest year-over-year increase, with prices rising 3.7 percent in the 12 months to September. Property values in Washington were up 1 percent.

Nationally, prices decreased 3.9 percent in the third quarter from the same time in 2010. They increased 0.1 percent from the previous three months before seasonal adjustment and dropped 1.2 percent after taking those changes into account.

A pipeline of seized properties threatens to weigh on prices even more as a temporary halt on foreclosures stemming from faulty seizures comes to an end. In the third quarter, U.S. lenders started foreclosures on more homes, the first increase in a year, as bank moratoriums that clogged the pipeline abated.

Las Vegas Review-Journal writer Hubble Smith contributed to this report.

Comments

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

1. Renee.Lang Dec. 7, 2011 | 11:53 a.m. Report Abuse

   And how many of these sad sacks crying about being under water or losing their homes, voted for Obama?
   This is all at the feet of Clinton, Waters, Barwney, Rahm, Obama,Schumer and the Dems.
   Only the truly ignorant don't get that - Wall Street and W had nothing to do with the housing melt down - it is all completely teh Dems and Fannie Freddie - big government.

2. elveret.odamit Dec. 3, 2011 | 5:24 p.m. Report Abuse

   It seems many people and investors are hopeful Vegas property will recover in 5 to 10 yrs but within that period there`ll be many more Vegas style casinos across the country and globally. as it is Macau is the global casino capital presently. even cirqu de solei is there. hopefully this is not a rerun of city of Detroit which was king of the auto nation until cars were manufactured globally. manufactured even in Tennessee and the south east cities, Detroit now is one of the most depressed city in the U.S. as global competition increases for Vegas the time will get tougher. there`s always been a wealth transfer from location to location, nothing is guaranteed in life except DEATH and taxes..

3. Bart.D Dec. 1, 2011 | 4:36 p.m. Report Abuse

   Gripe if you want but until the bathtub full of real estate empties
   you won't see marked improvement. All will be better off if the
   foreclosures are put through. If you're injured by it, too bad, you are the one who bought the Emperor's New Clothes. Live with it. No one told you to pay too much, borrow too much, take terms you couldn't meet, take ARM's and interest only loans, speculate or flip houses.
   
   The faster the fire sale occurs the faster there will be a rebound. Get it all on the market and sold. If you stay with it you will eventually get your equity back in 10 or 15 years, and you would be paying that mortgage that long anyway and it would have taken you that long to get your equity built up to the same level. Inflation alone will do that for you.
   
   Now, the water problem. Hey, make it rain and snow up river. It shouldn't be too hard see most of you are crying me a river.

4. American values Dec. 1, 2011 | 12:38 p.m. Report Abuse

   Have Barney Frank & Chris Dodd force the bank to give you a loan - that should fix it - NOT.
   
   we need people in office that have American Values Traditions and Principles.
   Vote RIGHT.

5. Chandler_L Nov. 30, 2011 | 6:39 p.m. Report Abuse

   Now everyone should take Mayor Goodman's advice and take advantage of the FABULOUS bargains to be had in real estate.

6. D.O Nov. 30, 2011 | 10:06 a.m. Report Abuse

   here is where the investor gets screwed: We have to ration water and the town dries up. Everyone has to move because water to expensive. Now what? For the real home owner = screwed, for the investor = screwed. you wont recoup your investment in 10 years.
   if you do, then all you did was get your money back and will lose ate the end due to the house or condo not being worth anything

7. Mac Nov. 30, 2011 | 8:34 a.m. Report Abuse

   I'm sure if you asked Harry he'd say, "It's all Bush's fault!"

8. R.E. Whistleblower Nov. 30, 2011 | 8:14 a.m. Report Abuse

   "Savvy investors will continue to buy Las Vegas real estate because they realize our market is currently undervalued and overcorrected".....So I figure in about 5 years when this is all said and done, most if not all homes in Las Vegas will be owned by INVESTORS! The article states the real facts....high unemployment, tight lending standards are going to force the owner occupied buyer out of the market in favor of the INVESTOR who is going to make sure you're renting for a long time.....Why sell if it's making positive cash flow??...Why sell if they bought the home in a declining market??....Slippery slope if you ask me.....the future is going to be not how much for the down payment, but, how much for the deposits?...disgusting!

9. Big Julie Nov. 30, 2011 | 7:55 a.m. Report Abuse

   A closet with a bedroom attatched to it for $695 a month.
   Such a deal.

10. Roger Nov. 30, 2011 | 5:34 a.m. Report Abuse

    @sierra sqre...since you opened the door to using this site as free advertising for the complex would you think it equally appropriate for readers to post negative comments about the apartments ??

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