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Oct. 16, 2008
Copyright © Las Vegas Review-Journal

Las Vegas housing market continues to struggle

By HUBBLE SMITH
REVIEW-JOURNAL

Home models at Concordia Home's Sage Creek development off Cactus Avenue await tour today by prospective buyers.
Photo by Louie Traub/Review-Journal

The housing market outlook continues to be bleak for Las Vegas with lagging new home sales and falling prices, but existing home sales topped 3,000 for the third straight month, Home Builders Research reported today.

The data showed 976 recorded new home sales in September, bringing the year-to-date total to 8,292, a 46.7 percent decline from a year ago. There were 2,545 new home sales in the third quarter, a decrease of 2,546 transactions, or 50 percent, from a year ago. The new home segment peaked in fourth quarter 2005 with 11,198 sales.

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    • “In our opinion, during the fourth quarter, we will see further weakening before finally settling at the bottom of the quarterly new home sales activity,” Home Builders President Dennis Smith said.

    The median price of a new home dipped to $251,000 in September, down 2 percent from August and down 20 percent, or $62,480, from the same month a year ago.

    Smith counted 3,125 home resales in September. The nine-month total of 21,845 resales represents a 6.3 percent increase from a year ago.

    “Even if 80 percent of the existing home sales are now foreclosures and short sales, that’s OK,” Smith said. “We are moving inventory and that is important for a recovery.”

    The median existing home price in September was $189,000, a decrease of $73,377, or 28 percent, from a year ago.

    New home building permits remain at their lowest levels in decades. There were 461 permits pulled in September. The year-to-date total is down 53 percent at 5,452.

    October home sales will probably come down, Debi Averett of Housingdoom.com said.

    “My best bet is that a lot of buyers rushed to take advantage of down payment assistance before it was no longer available,” she said. “The bump in September sales will probably take away from October sales, so I expect sales to be down quite a bit month-to-month.”

    What’s missing from the Emergency Economic Stabilization Act is a “stay of execution” for the death of down payment assistance, housing analyst Lisa Jackson of John Burns Real Estate Consulting said.

    Despite some initial traction from a last-ditch, grass-roots effort to preserve seller-funded down payment assistance, the financial crisis engulfed the momentum, she said.

    Elimination of down payment assistance is going to have a significant negative effect on demand for housing as almost all buyers will need a 3.5 percent down payment. While some builders may have seen a recent uptick in sales, long-term demand will certainly fall, Jackson said.

    “In other words, R.I.P. You’ll be missed by many,” Jackson said.

    The housing slump has taken its toll on home builders, the latest being Concordia Homes of Nevada. The Henderson-based builder closed its sales offices at subdivisions in Southern Nevada and Arizona.

    “Concordia Homes has taken an action that was necessary to reflect the realities of today’s home building market,” Concordia President Gidget Graham said today in a company statement. “The main factor that led to this decision was the rapid decline in real estate values.”

    Graham said Concordia’s main office remains open and the intention is to reopen sales centers when market conditions improve.

    Smith said he’s talked with two other smaller home builders who reported losing residential lots to creditors.

    “Hopefully, the credit markets will loosen soon before more home builders are victims,” he said. “Home builders are a very resilient group. Some are hibernating, waiting for the market to turn before re-emerging in an atmosphere of pent-up consumer demand.”

    Despite falling prices, Averett said it looks like the housing market is experiencing a bit of a recovery, “if the credit crisis and cooling economy don’t kick the legs out from under it.”

     

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

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    Helene Moore wrote on October 28, 2008 09:06 PM: The housing slump is an opportunity for small business owners to flourish and those of you who may have lost jobs and income could start small businesses. Those folks buying foreclosed houses need your help. Jobs are needed in yard maintence,painting, plumbing, electrical work, dry wall repair .
    Foreclosed homes most likely need repair work done, home cleaning done painting, new fixtures, landscaping ECT. Why doesnt the media focus on the positive outcomes instead of all this doom and gloom? I would love to see a reporter report something more positive. When have we been able to buy a home for under $90.00 a sq ft ???
    Anyone wanting to buy foreclosed properties should email me. Im a full time Realtor.


    HousingDoom wrote on October 16, 2008 11:13 PM: Bobman, you are right, sorry, in some circles Mad Dog still carries a bit of class for those who indulge in the fruit of the vine. Right now with this economy, I suspect we will all be indulging a little more in our "cups" to ward off the thought of our declining 401K's and home values!


    Bobman wrote on October 16, 2008 10:50 PM: Come on HousingDoom, you didn't have to bring the Mad Dog into it.


    Ronald Reagan wrote on October 16, 2008 09:48 PM: The Republicans have lost this election.

    The blame for the nightmare that we are facing lays squarely with the Republican Party. A disastrous war, a looming recession, a near financial collapse, the demise of the housing market, record budget deficits, are the legacy of the Bush Administration.

    The Republicans need to regroup after this election and get back to true Fiscal Conservatism and jettison the right wing extremists.


    HousingDoom wrote on October 16, 2008 08:58 PM: Doom and Gloom you dumb schmuck, have you looked out of your double wide in the last 2 yrs? This market is now called a "Depression"! Prices are heading back to pre-2001. Followed by a decade of stagnation. Brother, if you think these casinos will bail out this market, let me introduce you to an empty suited GLVAR "professional" who will sell you a depreciating asset call a home! Assuming ofcourse you can afford to buy the steam off a hotdog! Probably not, so just go back to drinking your MD 20/20 and toking on that joint!


    laguna wrote on October 16, 2008 08:53 PM: If you dead-beats cant afford a house now, you never will. Stop complaining and buy one, then shut up about it.


    Chuck 03 Dale wrote on October 16, 2008 07:55 PM: It's about time that a cracker box may become reasonable.


    Mixed up wrote on October 16, 2008 07:48 PM: Vote for ObamaHood/Claus or McSame?


    Matt Foley wrote on October 16, 2008 07:41 PM: I fell into foreclosure on my home last week. I now live in a van down by the river.


    Doom and Gloom wrote on October 16, 2008 07:31 PM: Negative, negative, negative. Wait till all the new casinos open. We will need all the homes for all the new workers. Where are you Doom and Gloom.


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