market reports

Las Vegas Housing Market: Foreclosures Down, Sales Up

Happy days are here again for home buyers. SalesTraq has just rolled out its latest data analysis of the Las Vegas real estate market and its great news if you are thinking about buying a home. Bottom line: home prices are now at levels not seen in the Las Vegas valley since 1998! There is one caveat. Real estate is still very much locally driven and areas that haven’t had a lot of repossessions also don’t have the large prices drop either.

Not everyone will be happy with the news (read investors, home owners that need to sell) but overall its good news for Las Vegas. Low home prices were one of the main attractions the valley held for people moving here from other states, especially from California. Over the last few years home prices had skyrocketed, preventing a lot of valley residents from the dream of home ownership.

According to the SalesTraq report, the median price of existing homes dropped to $125,000 in April. That’s a 57% drop since the price peak in June of 2006. In April of 2008 the average price per square foot was $135.73. That has dropped 42% down to $78.58.

Home sales are also up. April saw the largest number of home sales since June of 2006. 4,063 existing homes were sold, an increase of 437 from the prior month and just shy of the 4,198 sold in June of 2006. Compared to April of last year, that is an increase of 78 percent. Of the homes sold in April, 62% were bank owned (foreclosures). The median price of REO homes sold was $115,000, $30,000 less than non-bank owned properties according to SalesTraq.

So not surprisingly foreclosures are statistically the best bargains and count for a significant number of sales. The report also shows that April had the fewest number of foreclosures (1,289) in the last 16 months. This is third consecutive month that number of homes going into foreclosure has dropped and the second month where sales have exceeded home repossessions.

According to SalesTraq, the current inventory of existing home is 16,202, the lowest since April 2006 and roughly down 4,400 from January of this year. While this could be a sign of recovery for the market, many experts expect another surge of repossessions later in the year, despite the new government programs. Another factor fueling home sales is the First Time Home Buyer Tax Credit. That program expires on December 1st later this year and will undoubtedly affect sales.

Related:

Looking at the Las Vegas Real Estate Market

Looking at the Las Vegas Real Estate Market

In order to understand how we got to where we are today, we have to look back over the last couple of years. The real estate market enjoyed unprecedented growth across the country, especially in large urban areas. Unfortunately, this growth was built on the shaky foundation of sub prime lending which did collapse or as the media described it, the "real estate bubble burst".

RTTNEWS.COM had an article about a study conducted by Radar Logic Inc., a real estate data company. The New York based company tracked foreclosures across several large cities in the US. From January 2008 to October 2008, during which time foreclosure sales nearly tripled, home prices plummeted. According to the data provided by Radar Logic, Detroit, Las Vegas, Phoenix, Paradise Valley, San Diego and Seattle saw their largest month to month declines in home prices since they began tracking data in January of 2000.

A side effect of the flood of bank owned properties has been the reduction of home prices. As a result, home sales are up 15% from the prior year. In Las Vegas, the latest figures show that bank owned properties represent 75% of all sales, up from roughly 64% in October of 2008 (data provided by Radar Logic).

Despite the slowing of the Las Vegas economy, people are still moving to the valley. An analysis of moving requests conducted by Relocation.com shows that Las Vegas retained its top spot for people looking to make a long distance move in cities with more than 1 million residents. One of the major draws of the Las Vegas real estate market was inexpensive housing

(when compared to nearby markets, like Southern California). With such a huge inventory of homes for sale, prices have dropped below historic market value.

What does all this mean for the market? For one thing, all of this activity is helping to speed up recovery. As more properties are bought up, the discounts being offered by banks and new home builders will start to decline.

"There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure." Some buyers have been waiting for prices to stop falling and in some areas of the valley they already have.

Sources:
- rttnews.com
- relocation.com
- Forbes.com/realestate/2009/01/12/cities-ten-realestate-forbeslife-cx_mw_0112realestate.html

Related:

Las Vegas Foreclosures Down, Sales Up

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