This Las Vegas Housing Report Courtesy of

Steve Bottfeld, Marketing Solutions

Larry Murphy, SalesTraq™

The good news: there were over 5,000 homes sold in Las Vegas during the month of April.   The bad news: prices continued their downward slide.   

Homebuilders struggle as new home sales have practically come to a halt, with only 267 closings being recorded last month.  New home closings now account for only 5% of total home sales, as the average price per sq. foot for a new home sinks to just $91 per square foot. (Average size = 2088 sq ft).  For some time now we have been saying "New home prices are about as low as they can go . . . builders cannot afford to sell them for less money than it cost to build them." 

Indications are that builder confidence in the near term future of the housing market remains low, with only 313 new home permits issued.  YTD 1,141 permits have been issued which is 40% fewer than the previous year.  Last years new home sales tallied just over 5,000 units, with nearly 1,000 of them recording in July, thanks to the homebuyer tax credit.  But with no homebuyer tax credit this year, new home sales probably wont exceed 3,500 units.

Aprils existing home sales consist of these four categories:

1.       Normal, non-distressed sales, 29%

2.       Short Sales, 17%

3.       REO Sales, 41%

4.       Auction Sales, 16%

Existing home prices also continue to decline and now stand at just $70 per square foot.  (Average size = 1788 sq ft).  If the current trend continues, the median price of an existing home could hit a low of $100,000 by the end of this year.  If  that happens, it will be the lowest median home price in Las Vegas since 1989, some 22 years ago.

Bank repossessions continue to flood our market like the mighty Mississippi floods the delta.  The YTD number is 6,476, which is 18% higher than last year.  Realty Trac reports that nationally, the time from NOD to foreclosure sale is now running over 400 days.  Zillow estimates that 69% of homeowners in Nevada are still underwater.  We appear to be stuck in a "catch 22";  the lower prices go, the more properties there are which are labeled as "underwater"!

CoreLogic estimates than just under 20% of Nevadans are 90 days or more delinquent on their house payment.  If this is true, we still have many, many more foreclosures/distressed sales in our future. 

Yet with all this, home sales remain brisk!  50% of all sales today are for CASH.  Many investors apparently feel that our housing market is over corrected and under-valued.  We feel the same way.  We expect prices will continue to decline through the end of this year, and possibly into next year, but not by much.  We do not look for a quick turnaround, but we do feel that we are "at or near" the bottom of this cycle, and that the long term outlook is excellent.  Every recession in history has come to an end at some point, as will this one.  Meanwhile, we say "If you want to look like a genius five years from now, buy all the Las Vegas real estate you can today."

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