Local housing indicators in November continued to soften, two Las Vegas research firms said this week.
Closings and median prices in the new- and existing-home categories fell from a year earlier, data from SalesTraq and Home Builders Research showed.
The market's median new-home price plummeted following massive cost cuts in October and November, as builders looked to move inventory. And sustained high supply on the resale side suppressed median prices there.
The pain hit the affordable condominium-conversion market especially hard. The segment, which carries median prices well below $200,000, moved just 67 homes in November, down from more than 1,000 sales at the conversion market's peak in December 2005, said Dennis Smith, president of Home Builders Research. The dismal performance points to the toll the credit crunch is taking on investors and marginal borrowers who have lower incomes and no cash for down payments, Smith said.
Researchers did see some improvements in November.
Builders pulled just 343 permits, the lowest total "in this century," said Larry Murphy, president of SalesTraq, in his market review. Those numbers could mean lower new-home inventory and stabilized prices a few months down the road.
The supply of existing homes moderated, too. The number of resales on the market slid 4.3 percent from October to November, coming in at 25,981 listings, Murphy noted. That's up significantly from the 20,684 units for sale in November 2006, but it's the lowest inventory since June.
For Realtor Mike Altishin, the numbers support what he's seeing on the job.
"This market is really, really bad," said Altishin, a sales associate with Realty Executives. "Quite frankly, I'm not interested in taking a listing at this point unless someone is extremely motivated to sell."
Altishin said he has three listings, down from the eight to 10 listings he typically carries in healthier markets. He has a home for sale below $200,000, and it's fallen out of escrow three times. He's also sold his own investment properties; one, appraised at $210,000, just sold for $165,000. And Altishin had to cover the closing costs to boot.
"I saw a commercial on TV with some people who had purchased a home at an auction, and they were excited that they had purchased this $250,000 house for $20,000 below value," Altishin said. "When I heard that, I said, 'That was about $25,000 too much.'"
Still, Altishin believes the worst may have passed.
Though the market will continue to struggle into 2008, the decline will slow, he predicted. He doesn't expect a complete recovery before 2009 or even 2010, because banks have tightened their lending criteria and consumers will continue to have a tough time qualifying for homes unless they can make a sizable down payment.
Smith said he expects an uneven 2008, with sales picking up early in the year and dropping again in the fourth quarter. He's forecasting 20,000 sales of new homes in 2008, while sales of existing homes won't surpass 24,000 units. The two submarkets sold roughly 18,000 and 22,500 units respectively in the first 11 months of 2007.
Median prices will continue to fall as well, Smith said.
New homes will post year-over-year pricing decreases of 10 percent to 15 percent in the first quarter, he said. Median prices will be dropping a smaller 5 percent year-over-year by the fourth quarter.
The median price of a resale home could dip from its current $253,900 to $240,000 by mid-2008, Smith said. But in that lower median is the glimmer of a stabler market, he said. If banks ease up even slightly on stringent borrowing rules, the cheaper prices could combine with rising demand from new residents hired in the resort sector to halt the pricing slide by 2009.
"It's a horrible market, but it's a horrible market that's going to get better," Smith said. "We are very close to the bottom. Unfortunately, the turnaround is not going to happen overnight."
Contact reporter Jennifer Robison at firstname.lastname@example.org or (702) 380-4512.