Las Vegas July Home Sales

Las Vegas home sales rose above a year ago for the 11th consecutive month in July as investors and first-time buyers – including many making “cash” deals – continued to target lower-cost, post-foreclosure properties. The overall median sale price fell nearly 4 percent from June, marking a low point for the decade and ending a brief period in which that price gauge and others had held steady, a real estate information service reported.

Nearly 70 percent of the Las Vegas-area houses and condos that resold in July were foreclosure resales, meaning those homes had been foreclosed on in the prior 12 months. That was the same as in June but up from 62.5 percent in July 2008. Foreclosure resales peaked in April at 73.7 percent of total resales, according to MDA DataQuick of San Diego. The firm tracks real estate trends nationally via public property records.

A total of 5,311 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area (Clark County) last month, down 3.8 percent from June but up 28.5 percent from a year ago. It was the highest sales total for any July since 6,530 homes sold in July 2006.

July marked the 16th consecutive month in which sales of existing single-family detached houses rose on a year-over-year basis. The 3,925 single-family house resales last month were the highest for any July since 4,555 sold in July 2005. Resale condos have seen an annual sales gain for 13 straight months and in July sales were the highest for that month since 2005.

Sales of newly built homes remain extremely slow, largely because home builders can’t compete with discounted foreclosure resales. Last month’s 430 new-home sales fell 9.5 percent from June and fell 44.7 percent below a year ago. July’s new-home total fell about 74 percent short of the average number sold in that month since 1994, when DataQuick’s complete Las Vegas region statistics begin. The lowest month for new-home closings was January 2009, when 249 sold.

The median price paid for all new and resale houses and condos sold in the Las Vegas metro area last month dropped to $130,000, down 3.7 from $135,000 in June and down 41.4 percent from $221,990 a year ago.

The region’s all-home median sale price has fallen on a year-over-year basis for 27 consecutive months and in July stood 58.3 percent below the region’s peak $312,000 overall median in November 2006. Last month’s overall median was the lowest since it was $129,000 in April 1999.

The median price paid for resale single-family detached houses – by far the region’s largest home-type category – is one of the best gauges of overall price trends. That median also fell in July, declining to $135,100 after holding at $140,000 during May and June. Last month’s resale house median was the lowest since it was $135,000 in June 2000. It stood 56.7 percent below its $312,250 peak in June 2006.

Another price gauge analysts watch fell in July after flattening out in May and June: The median paid per square foot for resale single-family detached houses dipped to $75 in July, down from $177 in May and June and down 34.2 percent from a year ago. July’s figure was 60.6 percent lower than the $190 peak reached in June 2006.

Foreclosures will continue to play a leading role in the Las Vegas housing market for the foreseeable future, mainly by keeping downward pressure on prices and by luring investors and first-time buyers. In July, 3,683 houses and condos were lost to foreclosure in Clark County, up 1.7 percent from June and up 26 percent from a year ago. It was the second-highest monthly total, behind 3,718 this February, since foreclosures began to surge in 2006. The figures are based on the number of trustees deeds filed with the county recorder’s office. The document signals that a home was lost to foreclosure.

Key to burning through the steady stream of foreclosures will be investors and first-time buyers.

In July, a popular form of financing used by first-time home buyers – government-insured FHA loans – accounted for 58.4 percent of all purchases, up from 51.8 percent in June. Absentee buyers bought 39.1 percent of all Las Vegas–area homes last month – the highest since it was 39.3 percent of purchases in November 2005. Absentee buyers are often investors, but could include second-home buyers and others who, for various reasons, indicate at the time of sale that the property tax bill will be sent to a different address.

Of all buyers, those using cash to purchase their homes accounted for nearly 43 percent of all sales in July, based on an analysis of public property records. Specifically, these were transactions where there was no indication of a purchase mortgage recorded at the time of sale. Some of these “cash” buyers could have used alternative financing arrangements outside of a typical purchase mortgage, and in some cases these buyers might be taking out mortgages after the purchase. All-cash deals have become popular in many Western markets where prices have dropped sharply and sellers favor the relative speed and certainty of all-cash buyers.

The use of adjustable-rate mortgages (“ARMs”) to buy homes remained near a record low, representing 1.1 percent of all purchase loans in July. That’s the same as in June but down from 5.3 percent a year ago and down from a monthly ARM-use average of 32 percent this decade.

Across the West, year-over-year declines in the median sale price – the point where half of the homes sold for more and half for less – have sometimes overstated the extent to which the value of the typical home has fallen. It’s because the median is being tugged lower not just by price depreciation but by shifts in the types of homes selling. For example, more of today’s sales involve foreclosures, which tend to sell at a discount and be concentrated in more affordable areas. Also, the August 2007 credit crunch made larger “jumbo” mortgages more expensive and harder to obtain, which has led to sluggish sales – in some cases the lowest in many years – in higher-priced communities. (A dropoff in high-end sales can pull down the median.)

Las Vegas-Paradise, NV MSA

Number of sales Jul-08 Jul-09 %Chng
Resale houses 2,933 3,925 33.80%
Resale condos 423 956 126.00%
New homes 778 430 -44.70%
All homes 4,134 5,311 28.50%
       
Median sale price Jul-08 Jul-09 %Chng
Resale houses $220,000 $135,100 -38.60%
Resale condos $136,000 $70,000 -48.50%
New homes $263,579 $201,706 -23.50%
All homes $221,990 $130,000 -41.40%

Media calls: Andrew LePage (916) 456-7157

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