Nevada Asking Prices Rise: Realtor.com Real Estate Trends for October 2012

Nevada Cities Double Down

Nevada’s two largest cities, Las Vegas and Reno, have joined the winner’s circle of markets where asking prices are up in double digits over 2011. A median priced home in Las Vegas now lists at 12.41% higher than a year ago, and in Reno the median listing price is up 11.67%.

As in other former foreclosure hotbeds in Florida, Arizona and California, tight inventories and strengthening demand are driving prices up for foreclosures as well as full-priced properties. However, October month-over-month prices in Las Vegas were nearly flat for the first time in eight months.  “We sold fewer homes in October than we listed,” said Kolleen Kelley, president of the Greater Las Vegas Association of Realtors.

Inventory is falling fast in Reno, where there were only 2,773 homes for sale in October, down 29.87% from October 2011. In Las Vegas, inventory fell -24.40% last month.

Best of all, foreclosures are down in Nevada, once the nation’s top foreclosure state. New notices of default in the state have fallen 74% in the past year and bank-owned inventory is down 65%. However, a new foreclosure law designed to ensure that potential buyers would have a clear title as resolution of the robo-signing scandal has slowed down processing. The time it takes to foreclose in Nevada reached an all-time high of 509 days in August.

As the 2012 home buying season comes to a close, there are signs that the nascent housing recovery may be losing some of its steam. List prices have declined for the past three months, erasing the gains that occurred in the spring of 2012 and leaving the median national list price in October essentially unchanged from that observed a year ago ($189,900). Given the record-low inventory of houses for sale, this leading indicator of future house price trends may suggest a weakening in underlying demand.

National Market Trends Sending Mixed Signals

The total US for-sale inventory of single family homes, condos, townhomes and co-ops (SFH/CTHCOPS) dropped to its lowest point since 2007, with 1.76 million units for sale in October, down -17.00% compared to a year ago and more than -40% below its peak of 3.1 million units in September 2007, when Realtor.com began monitoring these markets.  The median list price in October ($189,900) was the same as it was a year ago, while the median age of the inventory was down by -11.81%.  While lower inventories are a positive sign, the recent erosion in the median list price may foreshadow a dampening of recent increases in housing prices.

Key Market Indicators for October 2012

 

October 2012

Year-over-Year % Change

Month-over-Month % Change

Number of Listings

1,756,818

-17.00%

-2.58%

Median Age of Inventory

97

-11.81%

2.11%

Median List Price

$189,900

0.00%

-0.83%

Local Markets Trends Point To Major Regional Differences

National data masks pronounced regional differences in the strength of the housing market.  A growing number of markets that were once the epicenter of the housing crisis are now in a recovery mode.  The recovery that began in Florida more than a year ago has since spread to California, Arizona, Nevada and other parts of the West, with many of these markets registering dramatic declines in the number of properties for sale coupled with year-over-year list price increases of 10 percent of more.  However, a growing number of Midwestern and “rust belt” markets are registering signs of weakness, with list prices below the levels observed last year.  While they never experienced the excesses that were characteristic of the housing boom, continued economic weakness in these areas continues to take its toll.

On a year-over-year basis, the for-sale inventory declined in all but five of the 146 markets covered by Realtor.com, while list prices increased in 71 markets, held steady in 31 markets, and declined in 44 markets.  The number of markets experiencing year-over-year list price declines has increased in recent months, underscoring the continued fragility of many housing markets.

National Perspective

Median List Prices – The nationwide median list price for SFH/CTHCOPS decreased from $191,500 in September to $189,900 in October, effectively erasing all of the gains that accompanied the onset of the 2012 spring home buying season.  The median US list price now stands at the level observed in October 2011, and remains well below its peak of $249,900 in early 2007. While record-low inventories may prevent a further erosion of list prices, the inability to sustain the gains observed earlier in the year underscores the continued fragility of the housing market.

For Sale Inventories – The national for-sale inventory of SFH/CTHCOPS in October (1,756,818) was lower (-2.58%) than it was in September and down by -17.00% on an annual basis. The large year-over-year decline in inventory is a positive sign that the market may have worked through much of its excess inventory, which should help to bolster housing prices and set the stage for additional growth.

Median Age of InventoryThe median age of inventory of for sale listings was 97 days in October,   up by 2.11% from September, but -11.81% below the median age one year ago (October 2011).  While the median age of the inventory is highly seasonal, the year-over-year decline is consistent with other data showing that market conditions are tightening.

Local Market Variations

For Sale Inventories (y/y) – For sale inventories of SFH/CTHCOPS in October declined on an annual basis in all but five of the 146 MSAs monitored by Realtor.com, with for-sale inventory dropping by -20% or more in 44 of the 146 markets covered.  Although the rate of decline has moderated somewhat in recent months, many areas continue to see dramatic declines in their for-sale inventories compared to one year ago.

The 10 MSAs with the largest year-over-year declines in their for-sale inventories in October 2012 are listed below.  Eight out of 10 of these markets are in California, with declines that ranged from -38% to -65%.  Seattle, WA, and Atlanta, GA also registered declines of -40% and -37%, respectively.

Only five areas experienced a year-over-year increase in their for-sale inventories— Shreveport, LA (+14.06%), Philadelphia, PA (+6.40%), the Philadelphia metro area in New Jersey (+2.13%), Reading, PA (+1.87%), and Springfield, IL (+0.91%).  Increasing inventories in these markets are consistent with other indicators of continued weaknesses in both their housing markets and local economies.

Median List Prices (y/y) – On a year-over-year basis, October median list prices were up by 1% or more in 71 of 146 MSAs, and up by 5% or more in 36 MSAs.  Median list prices were down by 1% or more in 44 markets, while 13 experienced a decline of more than 5%.  The remaining 31 markets have not experienced significant changes in median list prices compared to a year ago.

Over the past few months, the number of markets experiencing year-over-year price declines has steadily increased, while the number experiencing list price increases has steadily declined. In fact, compared to one year ago, a higher number of markets are ending the year with a year-over-year price decline (44 in 2012 vs. 36 in 2011) and a lower number of markets have a year-over-year price increase (71 in 2012 vs.84 in 2011).

Median List PricesLargest y/y Increases – California markets continue to dominate the list of areas experiencing the largest year-over-year increases in their median list prices.  In addition, Phoenix, AZ, Atlanta GA, Seattle, WA, and Las Vegas, NV in the list of top performers. While Florida markets have been performing relatively well for more than a year, many of these other markets were registering large year-over-year price declines in October 2011. The 10 markets with the largest year-over-year list price increase are shown below.

Median List Prices – Largest y/y Declines – For more than a year, older industrialized markets that never experienced the rapid run-up in prices that led up to the housing crisis have been registering among the highest rates of list price declines.  This pattern continued in October.  The ten markets with the largest list price declines are shown below.

Median Age of Inventory (y/y) – The median age of the inventory continued to be relatively high in the coastal areas of the Carolinas and in other vacation destinations such as Santa Fe, NM.  Reading, PA, the Philadelphia metro area in New Jersey and Portland, ME also had inventories that had been on the market for more than 120 days.

California markets continue to register among those with the lowest time on market compared to other areas of the country. The median age of inventory was also relatively low in Denver, CO, Phoenix, AZ, Seattle, WA, and the Washington, DC metro area.

For more related topics, visit real estate investment 101.

Related Posts

  1. The 10 trends that will shape real estate in 2020
  2. Case-Shiller: Gains in Home Prices Resurge, Phoenix Rises
  3. Cheap Mortgage Rates May Fuel a Rapid Rise in Home Prices, Forecast Warns
  4. Housing starts slump 4% in July, but there’s one silver lining for the real-estate market
  5. Existing-Home Sales Slide By RISMedia Staff
  6. New-home sales increased slightly in November — and 2020 looks set to be a big year for home builders
  7. Despite the Recession, Home Prices Are Up 4.9% From This Time Last Year

Tags: , ,

Leave a Reply