O'Brien-Nikolov Team
This January 2011 LAs Vegas Housing Market Report is Courtesy of Larry Murphy, Salestraq.com
Las Vegas housings statistics for January suggest four trends:
1. Existing home pricing is likely to continue to decline in the near future;
2. Short sales reflect a change in the existing home sales market;
3. Inventory and sales appear to be in the process of stabilizing;
4. The New Home Market may fare better in 2011 than it did in 2010.
1. EXISTING HOME PRICES COULD CONTINUE TO DECLINE IN THE NEAR FUTURE: The median price of an existing home sold in January was $109,000. The last time Las Vegas saw that median price was in 1991. That figure is 9.2% below last January ($120,000) and 4.8% below December.
Why is that important? For the last 19 months, existing home prices in Las Vegas have been fluctuating between (approximately) $115,000 and $125,000. January is the first month which saw a median price significantly below that range. Half of the homes (50.0%) were purchased with cash. More than three quarters (78%) were vacant.
The question is: Is this the beginning of a bottom or a signal that prices will decline further?
2. SHORT SALES MAY BE A FORCE OF CHANGE IN THE EXISTING HOME MARKET: A breakdown of January existing home sales yields important clues:
Of the 3,785 existing home sales in January, short sales accounted for just 20%. But, short sales commanded the highest prices -- even more than non-distressed property. Given that approximately 70% of Las Vegas home mortgages are "under water," this may be a signal that there could be a significantly higher proportion of short sales in the future. Such an action would be an impetus to pushing prices higher.
In January, one source noted that 7.8% of Clark County homes received a notice of default. Although thats considerably less than last years 19.8%, we will continue to see a significant number of foreclosures in the near-term for this market. Still, given the nature of the Las Vegas economy, we expect a higher proportion of short sales later in the year.
3.INVENTORY AND SALES MAY BE IN THE PROCESS OF STABILIZING: Last year, Las Vegas experienced 17,528 foreclosures. The 1,520 foreclosures in January were about the same as December.
Last January, financial institutions held 14,022 foreclosures in inventory. This January, the number declined to 12,420. That may not be a huge improvement, but the numbers seem to be going in the right direction: down!
The MLS showed a total of 15,334 homes for sale in January, about the same as the last four months.
Only 233 new home permits were pulled in January. Builders continue to remain cautious about placing product on the market.
Its too early to call this real stabilization, but if this continues for two more months, we will be able to call it a trend.
4.THE NEW HOME MARKET MAY FARE BETTER IN 2011 THAN IT DID IN 2010: Thats a difficult statement to defend in February, and it is certainly premature. All we are suggesting is that it is possible.
Yes, the median price of a new home in January was $208,145. Thats a 3.3% improvement over last year. But, there were just 233 new home sales in January, 15.8% less than the same month last year. What gives us the optimism to suggest a "better" new home market is possible this year?
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